Tipco Asphalt PCL (TASCO), Thailand’s leading asphalt maker, continued to see its shares decline today after having hit the floor price for the past 2 trading sessions, amid pessimism about the future prospects of the company.
Shares of TASCO was trading at about 16.10 baht down 7.47 per cent at around 10:30 a.m. on Wednesday after having fallen by 14.71 per cent yesterday and 14.67 per cent the previous trading session on Monday, September 14.
The shares have seen a persistent decline as the market responds in shock to the cancellation of its oil procurement in Venezuela and its asphalt company in Malaysia resulting in the analysts cutting the share price target for the company.
The temporary closures of asphalt refinery Kemaman in Malaysia will directly impact the wholesale trading business as the asphalt production from Kemaman accounts to half of the total supply.
TASCO has reported in the Stock Exchange of Thailand (SET) that the company is still on the process to negotiate for the new heavy crude oil source.
The company couldn’t provide a clear solution to find the new crude source in the ongoing crisis and this poses the risk in the middle to long-term to the firm, according to Nomura Securities.
The short-term impact will lead to a decrease of 700,000 tons in its crude sales until the first quarter of 2021, said Nomura.
As a result, many brokers have downgraded the target price of TASCO mostly by half of the former target price and recommended to ‘Sell’.
Analysts from Yuanta Securities reduced the target price to 12.40 baht per share from 31 baht per share which is the highest drop among the brokers.
On Wednesday, TASCO opened 16.60 baht per share and was trading at 26 baht on September 9, 2020 before the rumors and then confirmation of the closure of the Malaysian unit took place.