1Q17 net profit beat estimates on much lower provision
Kiatnakin Bank Under Review (17E TP Bt61.00)
Earnings Review
Close Bt71.50
Banking April 24, 2017
Beat forecast/Below forecast/In line
1Q17 net profit beat estimates on much lower provision Results date: April 21, 2017 Price Performance (%)
Earnings and 17E TP under review for possible upgrade We put our Underperform rating for KKP under review as we see a potential upgrade for the firm’s earnings and 17E TP. We will revisit our earnings estimates after the analyst meeting set for 26 Apr‐17. However, the challenges for 2017 could come from its ability to generate core income equal to the booking of the huge income from its distressed asset management units in 2016. 1Q17 net profit surpassed both our forecast and the street KKP posted 1Q17 net profit (NP) of Bt1.5bn (+38% YoY, +5% QoQ), beating both our forecast and the street estimate of ~Bt1.3bn. The higher‐than‐expected NP was due mainly to a much lower‐than‐expected provision of just Bt167mn in 1Q17 vs. our forecast of Bt600mn. Meanwhile, NIM and gain related to foreign exchange transactions in 1Q17 were below the estimates.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
6.469
6.770
KT ZMICO vs. consensus Share data
1.9%
3.1%
Reuters / Bloomberg
KKP.BK/KKP TB
Paid‐up Shares (m)
846.75
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
61.00/1,762.00
Foreign limit / actual (%)
44.00/31.34
52 week High / Low (Bt)
71.75/39.50
Avg. daily T/O (shares 000)
4,821.00
NVDR (%)
14.95
Estimated free float (%)
68.68
Beta
0.91
URL
www.kiatnakin.co.th
CGR
Level 4 (Certified)
Anti‐corruption
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
1Q17 net profit came in at Bt1.5bn (+38% YoY, +5% QoQ) The upbeat NP growth YoY was due mainly to 1) stronger NIM YoY to 4.6% from 4.4%; and 2) the sharp drop in the provision YoY to just 37bps in 1Q17 from 133bps in 1Q16. Meanwhile, the higher NP QoQ was backed mainly by 1) a lower loss from repossessed cars (from Bt208mn in 4Q16 to Bt136mn in 1Q17); and 2) higher gain from the sale of foreclosed assets (from Bt34mn in 4Q16 to Bt186mn in 1Q17). Meanwhile, loans for 1Q17 grew well by 1.6% YoY and 1.3% QoQ backed mainly by corporate loans (+30% QoQ) and housing loans (+42% QoQ). Meanwhile, auto hire purchase loans still declined by 2.5% QoQ. However, NIM in 1Q17 was below our estimate and weakened QoQ to 4.6% from 4.9% due largely to higher growth in lower yield loans QoQ (corporate and housing loans), but they still increased YoY from 4.4%. Asset quality and reserve ratios stable QoQ The NPL ratio for 1Q17 was quite stable QoQ at 5.6%. Meanwhile, the ratios for the loan loss reserve (LLR) to NPLs and to the BoT’s required reserve were also quite stable QoQ at 110% and 188%, respectively. We see upside risk to our earnings from much lower credit cost We see potential upside risk to our current earnings forecast of around 10% (+/‐), coming mainly from the potential for a lower‐than‐expected provision given the low provision level of just 37bps in 1Q17, which was much lower than the bank’s 2017 guidance of 120 (+/‐) bps and our forecast of 130bps for 2017. Financials and Valuation FY Ended 31 Dec 2015 PPOP (Btm) 5,514 Net profit (Btm) 3,317 EPS (Bt) 3.92 EPS growth (%) 21% Book value (Bt) 44.79 Dividend (Bt) 3.00 FY Ended 31 Dec 2015 PER (X) 18.25 PBV (X) 1.60 Dividend yield (%) 4.20 ROE (%) 8.9%
2016 5,767 5,547 6.55 67% 47.59 6.00 2016 10.92 1.50 8.39 14.2%
2017E 5,695 5,576 6.59 1% 50.18 4.00 2017E 10.86 1.42 5.59 13.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 5,734 5,914 6.98 6% 53.16 4.20 2018E 10.24 1.34 5.88 13.5%
2019E 5,935 6,376 7.53 8% 56.49 4.50 2019E 9.50 1.27 6.30 13.7%
Figure 1: 1Q17 earnings results
Statement of comprehensive income (Btmn) Fiscal Year‐Ended December Net Interes t Income
1Q16 4Q16 1Q17 2,337 2,602 2,546
Non Interes t Income
1,444
1,343
1,370
‐5%
2% 6,242
6,253
0%
22%
Opera ti ng Income
3,781
3,944
3,916
4%
‐1% 16,675
16,962
2%
23%
Opera ti ng Expens es Opera ti ng Profi t
1,809 1,541
2,214 1,473
1,881 1,734
4% 13%
‐15% 7,872 18% 6,710
7,926 6,780
1% 1%
24% 26%
Provi s i on for l oa n l os s (Revers a l ) Ta xes expens es (Revers a l )
584 276
100 172
167 337
‐71% 22%
67% 2,313 96% 879
2,375 999
3% 14%
7% 34%
Net Profi t PPOP‐a fter ta x
1,107 1,259
1,452 1,295
1,524 1,390
38% 10%
5% 5,547 7% 5,767
5,576 5,695
1% ‐1%
27% 24%
EPS (Bt)
1.31
1.71
1.80
38%
5% 6.55
6.59
1%
27%
Key Statistics & Ratios Gros s NPLs (Btmn) Gros s NPLs /Loa ns Loa n Los s Res erve/NPLs Loa n Los s Res erve/Requi red Res erve Ti er I/Ri s k As s et Ca pi ta l Adequa cy Ra ti o Loa n to Depos i t Ra ti o Loa n to Depos i t & ST borrowi ng
% YoY 9%
% QoQ 2016 2017E ‐2% 10,433 10,710
1Q16 10,106 5.7% 97.1% 166.7% 14.5% 17.2% 186.8% 114.1%
4Q16 9,968 5.6% 110.0% 187.8% 15.0% 18.5% 170.9% 113.2%
1Q17 9,933 5.6% 109.9% 188.1% 14.9% 18.4% 150.8% 113.7%
Provi s i on to l oa ns Cos t to Income
1.33% 47.8%
0.23% 56.1%
0.37% 48.0%
1.31% 47.2%
1.30% 46.7%
Non‐i nteres t Income/Tota l Income Net Interes t Ma rgi n
38.2% 4.42%
34.0% 4.91%
35.0% 4.59%
37.4% 4.84%
36.9% 4.78%
Interes t Sprea d Ta x ra te
4.48% 19.9%
5.06% 10.5%
4.81% 18.0%
4.64% 13.5%
4.88% 15.0%
Loa n growth YoY Loa n growth QoQ
‐3.0% ‐1.2%
‐0.9% 0.4%
1.6% 1.3%
‐0.9% 0.4%
3.6%
% YoY % 1Q to 17E 3% 24%
2016 2017E 9,968 9,470 5.6% 5.2% 110.0% 132.2% 187.8% N.A. 15.0% 17.3% 18.5% 18.6% 170.9% 171.3% 113.2% 113.4%
Source: Bloomberg and KTZMICO Research
Figure 2: KKP's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 1.8 1.6
Source: Bloomberg, KT ZMICO Research
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
0.2
Jan-10
0.4
Jan-09
0.6
Av g.
-0.5 S.D. -1 S.D. -1.5 S.D. -2S.D.
Jan-08
0.8
Jan-07
1.0
+2 S.D. +1.5 S.D. +1 S.D. +0.5 S.D.
Jan-06
1.2
Jan-05
1.4
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: KKP's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 16 14
+2 S.D.
12
+1 S.D.
10 Avg.
8 6
-1 S.D.
4
-2 S.D.
2
Source: Bloomberg, KT ZMICO Research
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TFD, CI, TTL, NMG.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD)
Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy DISCLAIMER
This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Earnings Review
Close Bt71.50
Banking April 24, 2017
Beat forecast/Below forecast/In line
1Q17 net profit beat estimates on much lower provision Results date: April 21, 2017 Price Performance (%)
Earnings and 17E TP under review for possible upgrade We put our Underperform rating for KKP under review as we see a potential upgrade for the firm’s earnings and 17E TP. We will revisit our earnings estimates after the analyst meeting set for 26 Apr‐17. However, the challenges for 2017 could come from its ability to generate core income equal to the booking of the huge income from its distressed asset management units in 2016. 1Q17 net profit surpassed both our forecast and the street KKP posted 1Q17 net profit (NP) of Bt1.5bn (+38% YoY, +5% QoQ), beating both our forecast and the street estimate of ~Bt1.3bn. The higher‐than‐expected NP was due mainly to a much lower‐than‐expected provision of just Bt167mn in 1Q17 vs. our forecast of Bt600mn. Meanwhile, NIM and gain related to foreign exchange transactions in 1Q17 were below the estimates.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
6.469
6.770
KT ZMICO vs. consensus Share data
1.9%
3.1%
Reuters / Bloomberg
KKP.BK/KKP TB
Paid‐up Shares (m)
846.75
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
61.00/1,762.00
Foreign limit / actual (%)
44.00/31.34
52 week High / Low (Bt)
71.75/39.50
Avg. daily T/O (shares 000)
4,821.00
NVDR (%)
14.95
Estimated free float (%)
68.68
Beta
0.91
URL
www.kiatnakin.co.th
CGR
Level 4 (Certified)
Anti‐corruption
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
1Q17 net profit came in at Bt1.5bn (+38% YoY, +5% QoQ) The upbeat NP growth YoY was due mainly to 1) stronger NIM YoY to 4.6% from 4.4%; and 2) the sharp drop in the provision YoY to just 37bps in 1Q17 from 133bps in 1Q16. Meanwhile, the higher NP QoQ was backed mainly by 1) a lower loss from repossessed cars (from Bt208mn in 4Q16 to Bt136mn in 1Q17); and 2) higher gain from the sale of foreclosed assets (from Bt34mn in 4Q16 to Bt186mn in 1Q17). Meanwhile, loans for 1Q17 grew well by 1.6% YoY and 1.3% QoQ backed mainly by corporate loans (+30% QoQ) and housing loans (+42% QoQ). Meanwhile, auto hire purchase loans still declined by 2.5% QoQ. However, NIM in 1Q17 was below our estimate and weakened QoQ to 4.6% from 4.9% due largely to higher growth in lower yield loans QoQ (corporate and housing loans), but they still increased YoY from 4.4%. Asset quality and reserve ratios stable QoQ The NPL ratio for 1Q17 was quite stable QoQ at 5.6%. Meanwhile, the ratios for the loan loss reserve (LLR) to NPLs and to the BoT’s required reserve were also quite stable QoQ at 110% and 188%, respectively. We see upside risk to our earnings from much lower credit cost We see potential upside risk to our current earnings forecast of around 10% (+/‐), coming mainly from the potential for a lower‐than‐expected provision given the low provision level of just 37bps in 1Q17, which was much lower than the bank’s 2017 guidance of 120 (+/‐) bps and our forecast of 130bps for 2017. Financials and Valuation FY Ended 31 Dec 2015 PPOP (Btm) 5,514 Net profit (Btm) 3,317 EPS (Bt) 3.92 EPS growth (%) 21% Book value (Bt) 44.79 Dividend (Bt) 3.00 FY Ended 31 Dec 2015 PER (X) 18.25 PBV (X) 1.60 Dividend yield (%) 4.20 ROE (%) 8.9%
2016 5,767 5,547 6.55 67% 47.59 6.00 2016 10.92 1.50 8.39 14.2%
2017E 5,695 5,576 6.59 1% 50.18 4.00 2017E 10.86 1.42 5.59 13.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 5,734 5,914 6.98 6% 53.16 4.20 2018E 10.24 1.34 5.88 13.5%
2019E 5,935 6,376 7.53 8% 56.49 4.50 2019E 9.50 1.27 6.30 13.7%
Figure 1: 1Q17 earnings results
Statement of comprehensive income (Btmn) Fiscal Year‐Ended December Net Interes t Income
1Q16 4Q16 1Q17 2,337 2,602 2,546
Non Interes t Income
1,444
1,343
1,370
‐5%
2% 6,242
6,253
0%
22%
Opera ti ng Income
3,781
3,944
3,916
4%
‐1% 16,675
16,962
2%
23%
Opera ti ng Expens es Opera ti ng Profi t
1,809 1,541
2,214 1,473
1,881 1,734
4% 13%
‐15% 7,872 18% 6,710
7,926 6,780
1% 1%
24% 26%
Provi s i on for l oa n l os s (Revers a l ) Ta xes expens es (Revers a l )
584 276
100 172
167 337
‐71% 22%
67% 2,313 96% 879
2,375 999
3% 14%
7% 34%
Net Profi t PPOP‐a fter ta x
1,107 1,259
1,452 1,295
1,524 1,390
38% 10%
5% 5,547 7% 5,767
5,576 5,695
1% ‐1%
27% 24%
EPS (Bt)
1.31
1.71
1.80
38%
5% 6.55
6.59
1%
27%
Key Statistics & Ratios Gros s NPLs (Btmn) Gros s NPLs /Loa ns Loa n Los s Res erve/NPLs Loa n Los s Res erve/Requi red Res erve Ti er I/Ri s k As s et Ca pi ta l Adequa cy Ra ti o Loa n to Depos i t Ra ti o Loa n to Depos i t & ST borrowi ng
% YoY 9%
% QoQ 2016 2017E ‐2% 10,433 10,710
1Q16 10,106 5.7% 97.1% 166.7% 14.5% 17.2% 186.8% 114.1%
4Q16 9,968 5.6% 110.0% 187.8% 15.0% 18.5% 170.9% 113.2%
1Q17 9,933 5.6% 109.9% 188.1% 14.9% 18.4% 150.8% 113.7%
Provi s i on to l oa ns Cos t to Income
1.33% 47.8%
0.23% 56.1%
0.37% 48.0%
1.31% 47.2%
1.30% 46.7%
Non‐i nteres t Income/Tota l Income Net Interes t Ma rgi n
38.2% 4.42%
34.0% 4.91%
35.0% 4.59%
37.4% 4.84%
36.9% 4.78%
Interes t Sprea d Ta x ra te
4.48% 19.9%
5.06% 10.5%
4.81% 18.0%
4.64% 13.5%
4.88% 15.0%
Loa n growth YoY Loa n growth QoQ
‐3.0% ‐1.2%
‐0.9% 0.4%
1.6% 1.3%
‐0.9% 0.4%
3.6%
% YoY % 1Q to 17E 3% 24%
2016 2017E 9,968 9,470 5.6% 5.2% 110.0% 132.2% 187.8% N.A. 15.0% 17.3% 18.5% 18.6% 170.9% 171.3% 113.2% 113.4%
Source: Bloomberg and KTZMICO Research
Figure 2: KKP's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 1.8 1.6
Source: Bloomberg, KT ZMICO Research
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
0.2
Jan-10
0.4
Jan-09
0.6
Av g.
-0.5 S.D. -1 S.D. -1.5 S.D. -2S.D.
Jan-08
0.8
Jan-07
1.0
+2 S.D. +1.5 S.D. +1 S.D. +0.5 S.D.
Jan-06
1.2
Jan-05
1.4
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: KKP's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 16 14
+2 S.D.
12
+1 S.D.
10 Avg.
8 6
-1 S.D.
4
-2 S.D.
2
Source: Bloomberg, KT ZMICO Research
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TFD, CI, TTL, NMG.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD)
Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy DISCLAIMER
This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
