BBGI PCL

BBGI Public Company Limited, or BBGI, and BioVeritas Company Limited, or BioVeritas, have signed a memorandum of understanding to jointly study the feasibility of producing renewable feedstock for low-carbon fuels such as sustainable aviation fuel, or SAF, in Thailand. The signing ceremony was held in Bangkok, where the two companies will study the technical and economic feasibility of using domestic renewable feedstock to produce KEYtones™, developed by BioVeritas, for use in the Hydrogenated Esters and Fatty Acids, or HEFA, process to produce SAF and other renewable fuels. Mr. Dechapon Lertsuwanroj, Chief Executive Officer and Managing Director of BBGI, said Thailand has a strong foundation in agriculture, the bio-industry, and renewable fuels, and therefore sees an opportunity to add value to renewable resources by combining BBGI's capabilities with new technologies. Timothy Cesarek, Executive Chairman of BioVeritas, said this collaboration will help expand feedstock options for producers and improve the efficiency of the HEFA process in producing sustainable aviation fuel, while supporting the growth of Thailand's sustainable fuel ecosystem.

KGI Securities Thailand maintains its 2026 dividend per share forecast for BCP at 5.30 baht, up 405% from 1.05 baht in 2025, expecting record profit of 31.4 billion baht and applying a conservative payout ratio of 25%. Management has confirmed a policy of paying at least 30% of net profit after required reserves, depending on economic conditions, cash flow, and investment plans. BCP also has a share buyback program worth up to 3.8 billion baht during 2025-2028, with the first phase completed on 15 June 2026, repurchasing 9.67 million shares, or 0.66% of outstanding shares, worth 336 million baht from a maximum approved amount of 1.1 billion baht. Third-quarter 2026 profit is expected to decline from the previous quarter because refining margins fell due to higher crude premium costs, insurance, and freight, even though gasoline, jet fuel, and diesel spreads remained strong at 30.0, 62.3, and 67.8 US dollars per barrel, respectively. Refining utilization is expected to fall 2%-6% to 260-270 thousand barrels per day because middle distillate storage tanks are nearly full after the Energy Ministry banned diesel exports from 6 March. However, profit from the SAF project, in which BCP holds 80% and BBGI holds 20%, is expected to nearly double because this is the first quarter of full recognition after commercial operations began on 18 May. Bloomberg consensus recommendations are 19 buys, 2 holds, and 0 sells, with an average target price of 53.50 baht as of 25 August. The share price is expected to be supported by strong refining margins, a dividend yield of 10.3%, and SAF profit, making BCP the top pick in the refining sector, followed by SPRC and TOP.

KGI Securities Thailand expects BBGI's net profit to keep rising in the third quarter of 2026 after it hit a new high of 485 million baht in the second quarter, helped by no longer having to book an asset impairment loss of 174 million baht and by recognising the first full quarter of results from the SAF project, in which BBGI holds a 20% stake. It expects the SAF project to contribute profit of about 250 to 300 million baht in the third quarter, assuming the SAF spread narrows to 0.90 to 1.00 US dollars per litre. Ethanol business profit is expected to increase in line with reference prices, but biodiesel profit is expected to decline because of lower gross margins amid weaker refined glycerine prices. On the policy front, the cabinet has appointed Chanthanon Wannakhajorn as the new permanent secretary of the energy ministry, reflecting an intention to link the energy and agricultural sectors and support biofuels. The energy ministry is expected to extend the B7 biodiesel blending measure beyond its expiry on 13 September. KGI Securities maintains a buy rating on BBGI with a target price of 7.50 baht, based on a price-to-earnings ratio of 7.0 times, and picks it as a top stock in the energy sector.

BBGI shares rose more than 5% after KGI Securities Thailand raised its target price and maintained a buy rating. The broker said second-quarter 2026 net profit came in at 485 million baht, swinging from a net loss of 40 million baht in the second quarter of 2025 and beating its estimate by 37%, thanks to a higher-than-expected gross margin and a significant increase in profit contributions from associates. The key driver was the start of commercial operations at the SAF plant, in which BBGI holds a 20% stake. KGI therefore lifted its 2026 net profit forecast by 52% to 1.5 billion baht and raised its target price to 7.50 baht from 7.00 baht, while keeping a buy call and naming the stock a top pick in the energy sector.

Globlex Securities, or GBS, estimates that the Thai stock index in August is likely to move in a range of 1,600 to 1,650 points, supported by a more relaxed investment climate for risk assets. This follows President Donald Trump's cancellation of plans to attack Iran and the achievement of a temporary ceasefire agreement, which caused WTI crude oil prices to ease below 80 US dollars per barrel, after having surged past 88 US dollars per barrel. In addition, the OPEC+ group is likely to increase production capacity by another 188,000 barrels per day in September. Meanwhile, investors have reduced the probability of a US Federal Reserve interest rate hike in September to 65 percent from 82 percent, and the European Central Bank kept its policy rate at 2.25 percent. On the domestic front, foreign capital inflows have clearly returned, with net purchases in July reaching as high as 45 billion to 48.7 billion baht, up from 6.86 billion baht in the previous month, bringing cumulative net purchases since the beginning of the year to 73 billion to 74.3 billion baht. This is coupled with June exports expanding 20.8 percent, valued at 34.66 billion US dollars, and headline inflation slowing to 2.42 percent. GBS recommends an investment strategy focusing on stocks with strong fundamentals and outstanding second-quarter 2026 earnings growth prospects, namely CBG, STA, BBGI, PR9, and TNP.

KGI Securities Thailand expects BBGI's net profit in the second quarter of 2026 to recover to 353 million baht, from a net loss of 40 million baht in the second quarter of 2025, and up 34 percent from the previous quarter. The main driver is the biodiesel business, where revenue is expected to jump 66 percent year-on-year and 40 percent quarter-on-quarter to 4.8 billion baht, following a 39 percent year-on-year and 22 percent quarter-on-quarter increase in sales volume to 115 million liters, after the Ministry of Energy raised the mandatory biodiesel blend from B5 to B7 between March 14 and September 13, 2026. Biodiesel gross margin also got a boost from reduced competition and a higher reference price of 42.3 baht per kilogram. Meanwhile, the ethanol business is expected to see a slight decline in profit from a 2 percent quarter-on-quarter drop in sales volume to 67 million liters. The research team raised its 2026 profit forecast by 88 percent to 990 million baht, and its 2027 forecast by 46 percent to 1.0 billion baht, adjusting ethanol gross margin assumptions for 2026 from 2.5 percent to 10.0 percent, and for 2027 from 3.5 percent to 8.0 percent, reflecting lower molasses costs and improved production efficiency. The target price was raised to 7.00 baht from 5.45 baht, based on a price-to-earnings ratio of 10.0 times, down from 15.0 times to reflect slowing profit growth. The buy recommendation is maintained, with BBGI remaining a standout stock in the energy sector due to strong performance and the start of commercial operations at the SAF plant on May 18, in which BBGI holds a 20 percent stake.