We reiterate our BUY rating and optimistic view on BSR due to robust 2022-2023F earnings bolstered by strong crack spreads and long-term potential from a lower, more efficient capex plan for its upgrade & expansion. BSR’s valuation looks attractive at 2023F P/E and EV/EBITDA of 7.9x and 4.5x — ~20% and 55% discounts vs the respective six-year peer medians.

Our target price remains unchanged as 1) we raise our 2022-2023F NPAT-MI by 2.0x following higher projected product crack spreads, which offsets 2) the negative impact of raising WACC by 50 bps. We keep our 2024-2031F NPAT-MI almost unchanged.

We expect earnings to double YoY in 2022 thanks to gasoline/diesel/jet fuel crack spreads soaring ~36%/10x/4x YoY and the refinery operating at full capacity.