PSP, my latest growth stock pick with high dividends and low p/e.

P.S.P. Specialties Public Company Limited (PSP 5.00 Baht).

Here is PSP, what I think is a solid new growth stock pick.  Indirectly benefiting from US tarrifs, in a fairly defensive industry with low new technology risks -while a clear market leader trading now trading 20% below its IPO price from 2 years ago, despite earnings more than doubling since. (Net profit 525 mill. for first 6 months '25, vs. 427 for all of calender '23).

Here is my basic case why invest in select quality/reputable high dividend yielding non-biggest cap. Thai stocks:   Offsetting-correlation. Opposites attract.  One of the attractions of gold is that it often moves opposite to generally perceived "good news". It can be proven in portfolio-theory that investments which do not move in tandem are a great way to reduce investors risks, i.e. volatility. US centric investors may not have fully grasped this -beyond gold.  The shortcoming with gold is that it has 0 current yield, so no "invisible-hand" to help holding it up, i.e. no income if/when times turn bad.  Emerging mkts. like oversold Thailand have such very, very different companies than the US, while yielding far, far higher current dividends...and at 1/4 or less US p/e ratios. (Average dividend yields on US stock is barely 1.2%).   If there was a US set back or a bubble burst there, as there always is in time,...these, as I know them, would hold-up far better I am convinced, as they are soo different and soo far removed -in all ways. Besides not least, for years already so under-owned!  Paul A. Renaud. www.thaistocks.com

My view is a strong-buy on PSP around current mkt. prices.  A growth stock with a low 2025 p/e of barely 7 -and decent likely 5% dividend. PSP pays dividends twice yearly, its previous one was on May 16 '25 for 0.15 Baht and previous to that October 5 '24 for 0.05 Baht. So 0.20 for the past year or 4% on its current mkt. price. As the company already earning 0.38 per share for the first 6 months this year vs. 0.48 for all of last year, I can see the dividend increasing nicely. But of course this is up to their board of directors.   Based on their positive recent financial performance and not least: very recent upbeat forward looking statements by mgt. which I summarize.  Here researched & shared for members and my recent for investor enthusiasm.  Of course always diversify.

PSP Specialties Public Company Limited, debuted its IPO with 350 mill. shares at Baht 6.20, first trading day was August 30 2023. (PAR 1).   It soared to around 12 Baht in its first days -so typical back in those times.  The IPO Financial Advisory was BUALUANG SECURITIES PUBLIC COMPANY LIMITED.    PSP address is:  1 Boromrachachonanee Rd., Arun-Amarin, Bangkoknoi, Bangkok, 10700, Thailand.  There are no significant insider buying/selling since IPO.  Here is the IPO Prospectus, sorry In Thai language only:  https://hub.optiwise.io/en/documents/93398/prospectus.pdf

Here is their web site:  http://www.psp.co.th   You can see their various products here:  https://www.psp.co.th/en/products-and-services

PSP stands as one of Thailand’s top lubricant manufacturers, both in terms of production capacity and market share.  PSP is now undergoing SET ESG assessment, with its first official ESG rating expected by this year-end 2025.

Company history and some important/key events    PSP was founded in 1989 and is now in its 36th year of operation, starting out as a trading business before expanding into a manufacturer with its own factories, distribution centers and ports. The company diversified its business before being listed on the SET.

Memorandum of Understanding (MOU) for innovation development:    The company has signed a Memorandum of Understanding (MOU) with Eco Atlas and Evonik from China to jointly develop "Immersion Cooling Fluid" products for use in data centers, a new technology for Thailand to support chip processing that requires higher cooling efficiency in the future. (My take, Data centers are a very high new growth “industry”.  PSP produces for engine and for electric/servers, coolants.

High Export market growth:  The company is focusing more on expanding into international markets with its share of export revenue growing steadily from 15.9% in year 2023 to 19% in 2024 and rising to 22.6% in the first half of 2025, with a target of reaching 30% by 2028.  Export volumes have grown significantly with over 30 million liters sold in the first half of this year and an expected 60 million liters for the full year. There is significant growth potential in the large ASEAN market, and the company has the infrastructure to support growth without significant additional investment.   "We have been contacted by Chinese lubricant sellers, which should lead to a significant sales growth opportunity…..saying that the company's sales to China are not affected by America's trade policy”.   Says Mr Sakesan. MR. SAKESAN KRONGPHANICH, is deputy chief executive is PSP biggest shareholder at 13.3%.  Again I note, Foreign market growth: The growth rate has been continuously increasing, growing by approximately 40% from the previous year.

You can see the full article here BKK post Biz. article on August 27th. 2025.    https://www.bangkokpost.com/business/general/3093729/psp-specialties-anticipates-prospects-for-sales-growth

Profitability:  Gross profit margin has steadily improved from 11% in 2023 to 12.7% in 2024 and most recently at 14.1%, in the first half of 2025. This is primarily due to effective cost control, higher margin exports and the merger with Recycle dEngineering, which has a higher margin than PSP. As the company states.

EBITDA:  for the first half of 2025 was 716 million baht, up from 612 million baht in the same period last year. Despite higher administrative expenses due to business growth, overall growth remained strong.   Net Profit: in the first half of this year was 529 million baht, higher than the same period last year which was 385 million baht, with positive factors including lower finance costs from the gradual repayment of long-term loans.

PSP latest book value is stated as 2.84 and so P/BV is 1.76 and latest p/e is shown at 8.62 with estimated full year 2025 p/e around 7.  PSP Market Cap. is right around 218 mill. US$  its Debt to Equity Ratio (IBD to Equity): 0.42 times.  I believe its 2025 will be right around 7, at current mkt. prices.

PSP recently gave a  "SET OPPORTUNITY DAY" Performance Review Q2/2025 presentation, you can see it here (Thai Language):   https://listed-company-presentation.setgroup.or.th/vdo/9049

Here is a comprehensive fact sheet on PSP, a must read for better understanding:

https://lssmedia.setlink.set.or.th/2025/6M/PSP-6M68-ListedCompanySnapshot-TH.html

and here for an excellent in English language summary, which supports my buy view on PSP shares and with questions answered at the end, see this:

https://listed-company-presentation.setgroup.or.th/preview/9049/1

“A leading Total Solution Provider of lubricants, greases, and integrated chemical products, from upstream to downstream, with a commitment to quality, innovation, and sustainability….highly accurate oil storage and distribution center systems, along with the highest level of safety measures PSP prioritizes to ensure customer confidence....For more than 35 years , PSP has operated a number of businesses in accordance with international standards to fully satisfy the needs of customers in diverse industries."     (Here you can see PSP present stock graph since its IPO, inception.  trading 20% below its IPO price from 2 years ago, despite earnings more than doubling since. ).

“With our expertise in producing and developing lubricants, PSP formulates products according to our customer's needs (made-to-order). Our main products include Lubricants, Grease, and Specialty products such as Rubber Process Oil, Transformer Oil. In addition, we also develop and manufactures lubricants in Myanmar via Pacific-PSP Syntech Co., Ltd., our subsidiary. “

After just yesterday speaking with the company's head of IR, I was also told PSP produces coolants for engines and potentially large data centers. Besides traditional cars a huge mkt., hybrid cars & vehicles which are a far, far bigger market then EV's, uses their products.

PSP reported total revenue of 6,874.40 million baht in the first half of 2025, with a net profit of 525.28 million baht, a 36% increase. Export revenue grew by 41%, continuing to expand its lubricant product market abroad.  Again, PSP announced plans for aggressive market expansion going forward, focusing on expanding more into international markets.

The US tariff adjustment is expected to accelerate production relocation to ASEAN, leading to long-term growth in industrial lubricant demand.  Approximately 95% of this revenue came from sales of lubricants, greases, transformer oils, and rubber-based oils. In line with its core strategy to maintain leadership by strengthening the domestic market and increasing the proportion of revenue from international sales.  Net profit margin of 7.7%. This represents a 36% increase in net profit compared to the same period the previous year (5.02% and 3.48% for year 2023), driven by increased gross profit from sales of goods and services.

The company's gross profit reached 971.39 million baht, a 12% increase, due to an increase in the proportion of products with higher margins, lower raw material costs resulting from efficient management, and negotiations to secure more competitive raw material costs. Furthermore, the increase in net profit was attributed to increased profit share from investments in associates and a decrease in financial costs compared to the same period the previous year.  Global oil prices only affect the company's products with a 0.6 correlation -so are not a concern as any changes are passed-on near immediately.

“In the second half of 2025, PSP continues its aggressive market expansion plan, focusing on expanding into international markets in line with its existing strategy. While maintaining a focus on the domestic market, this will drive PSP's growth alongside its sustainable business drive in line with its ESG goals. The company views challenges from various external factors, including US import tariffs, international conflicts, and the overall economic situation, as growth opportunities”. (from mgt. statements -as well as below).

"Currently, the company is not directly affected by the US tariff adjustments, as it does not export products to the US.  Furthermore, international sales revenue in the past quarters continued to grow steadily. Furthermore, we believe that the US tariff hikes on over 70 countries have significantly increased global product costs, particularly for industrial products. This could accelerate the relocation of production bases to the ASEAN region to diversify trade tariff risks in the long term, leading to long-term growth in industrial lubricant demand. At the same time, companies have the opportunity to shift imports from major lubricant exporters like the US to other countries, which will benefit PSP,"  said Mr. Seksan.

“Furthermore, PSP is confident that the Asian lubricant market will continue to grow. According to Kline ASEAN Market Research, the Asian lubricant market is growing at an average annual rate of 1.9%, with a market size of over 4 billion liters. Currently, PSP's export volume represents only 1% of the regional lubricant market. With the strengths of its manufacturing processes, technology, world-class quality control systems, highly efficient management, and the continued trust placed in the company by global customers, PSP is confident that there are opportunities for growth. This growth is driven by existing customers, the addition of new customers, and the relocation of its global supply chain, will enable the company to achieve strong and sustainable growth beyond market.”  

Here are always my own views, never a specific investor-recommendation.  All comments most welcome.  Paul A. Renaud. www.thaistocks.com  

Here below is some very recent research I just now found from Hoonvision (some may be repetitive/confirming from my comments above):  

https://www.hoonvision.com/hoonset/psp-ผู้นำน้ำมันหล่อลื่น-จั/

"For the 2025-2026 fiscal year, the company has achieved an all-time high in performance for three consecutive years (+25% CAGR).

For 2025, PSP reported net profit of 953 million baht (56% of the total for the first half of 2025), reflecting a 42% YoY growth, driven by:

Benefiting from lubricant brand owners gradually shifting their strategies to hire domestic producers as a substitute for imports. This trend is expected to make Thailand a production hub for exports in the region.
PSP has benefited from Myanmar's measures to control the import of lubricants, enabling the company to export base oils to be produced in Myanmar. Additionally, PSP holds a 50% stake in the joint venture Pacific-PSP Syntech, which is the only lubricant manufacturer in Myanmar. As a result, PSP’s share of profits from this venture has significantly increased.
Increasing its stake in the recycling business (RE) to 100% (up from 27.8%), allowing the company to recognize more profit and create synergies from its customer base.

For 2026, net profit is expected to grow by 9% YoY to reach 1,040 million baht, marking a third consecutive record-breaking year. This growth will be driven by:

Gradually recognizing orders from lubricant brand owners as they move production bases.
COD of the B-phase production plant in Myanmar.
Full-year recognition of its 100% ownership in the RE business.
Reduced financial costs from debt repayment.

The company's strong financial position opens up opportunities for dividend payments, share buybacks, and M&A activities. The strong cash flow from operations and gradual debt repayment will strengthen its financial standing. By 2025, the company’s Debt-toEquity (D/E) and Interest-Bearing Debt-to-Equity (IBD/E) ratios are expected to decrease to 0.8 and 0.3, respectively. This enables PSP to increase its dividend payout, consider share buybacks, and invest in M&A activities, which are additional upsides not yet factored into the projections.

The stock is still undervalued considering its strong growth prospects. The recommendation is to "Buy," with a target price of 7.40 THB at the end of 2026, based on a PER of 10x, which is cautious compared to the industry average (15.4x) and the company's expected +25% CAGR. The stock also has a reasonable Implied PBV of 2x, which is aligned with its ROE of 20-22%.

Recommendation: "Buy" due to:

The impressive profit growth with record highs over the past three years. The current price is trading at a PER of only 7.3x for 2025, which does not yet reflect this growth.
A high dividend yield of 5.4%.
Increasing interest from investors, especially those with ESG criteria, as the company is awaiting its SET ESG rating, which is expected by the end of 2025."