2Q16 earnings above estimate
The Siam Commercial Bank Underperform (16E TP Bt138.00)
Earnings Review
Close Bt153.50
Banking July 21, 2016
Beat forecast/Below forecast/In line
2Q16 earnings above estimate Price Performance (%)
Recent price rally could narrow further upside We maintain our Underperform rating as the recent price rally could limit further upside potential, leaving no upside vs. our 16E TP and little upside potential vs. our tentative 17E TP of Bt155‐160/share (+/‐). 2Q16 results above both our forecast and the street by 6‐9% SCB posted 2Q16 net profit (NP) of Bt12.8bn (‐3% YoY, +22% QoQ) above both our forecast (Bt12.1bn) by 6% and the consensus estimate (Bt11.8bn) by 9%. The better‐than‐expected NP vs. our forecast was mainly due to higher‐than‐expected NIM. Some extra income in 2Q16 following the accounting adjustment in 1Q16
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
13.554
15.410
KT ZMICO vs. consensus Share data
‐1.5%
0.0%
Reuters / Bloomberg
SCB.BK/SCB TB
Paid‐up Shares (m)
3,395.13
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
521.00/14,886.00
Foreign limit / actual (%)
45.81/33.76
52 week High / Low (Bt)
154.00/112.00
Avg. daily T/O (shares 000) NVDR (%)
7,886.00 4.89
Estimated free float (%)
62.81
Beta
1.47
URL
www.scb.co.th
CGR
Level 4 (Certified)
Anti‐corruption
Note that in the audited financial statement for 1Q16, SCB decided to keep the accounting for SCB Life unchanged after the unaudited statements (announced on 22 Apr‐16), in which it chose to adapt new accounting standard (TFRS 4), resulting in a net negative pre‐tax impact of ~Bt4bn (‐Bt3.2bn post‐tax impact) in 1Q16. Hence, in 2Q16 SCB booked a reversal of a policy reserve (Bt4.3bn) at SCB Life following its decision to retain accounting policies as applied in the previous year. Note that this extra item for both quarters was booked through the net insurance claim item. Given this extra income reversal in 2Q16, SCB also set a high provision of Bt8.5bn (183 bps) vs. Bt5bn (109bps) in 1Q16. 2Q16 net profit stood at Bt12.8bn (‐3% YoY, +22% QoQ) The main reason behind the higher NP QoQ was the booking of extra income as mentioned earlier. Meanwhile, NIM was better than our forecast as it remained stable QoQ despite the negative of the MLR rate cut in early Apr‐16 thanks to its efficient funding cost management. Meanwhile, loan growth remained slow at +2.5% YoY and +1.5% YTD. Net fee income for 2Q16 dropped by 3% YoY and 6% QoQ. Asset quality weakened QoQ The bank’s NPL ratio in 2Q16 increased QoQ to 2.77% from 2.64% of loans, mainly on higher NPLs in housing loans. The higher provisioning in 2Q16 resulted in a higher reserve‐to‐NPL ratio QoQ to 130% in 2Q16 from 123% in 1Q16 and a higher reserve to the BoT’s required reserve QoQ to 140% from 129% in 1Q16. However, given the weak macro recovery, we still expect the bank’s NPLs to increase in 2016. Financials and Valuation 2014
2015
2016E
2017E
2018E
PPOP (Btm)
64,303
69,072
72,257
75,716
79,273
Net profit (Btm)
53,335
47,182
45,388
52,396
60,417
15.69
13.88
13.35
15.41
17.77
FY Ended 31 Dec
EPS (Bt)
Prapharas Nonthapiboon
EPS growth (%)
6%
‐12%
‐4%
15%
15%
Book value (Bt)
83.94
90.45
101.57
112.25
124.81
Dividend (Bt)
6.00
5.50
5.00
5.50
6.22
Analyst, no 17836
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
[email protected]
PER (X)
9.78
11.06
11.50
9.96
8.64
66 (0) 2695‐5872
PBV (X)
1.83
1.70
1.51
1.37
1.23
Dividend yield (%) ROE (%)
3.91
3.58
3.26
3.58
4.05
20.1%
15.9%
13.9%
14.4%
15%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q16 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
2Q15
1Q16
2Q16 % YoY % QoQ
1H15
1H16 % YoY
2015
2016E % YoY 1H to 16E
Net Interest Income
20,814
21,670
21,761
5%
0% 41,346
43,431
5% 82,834
84,887
2%
51%
Non Interest Income
12,447
7,975
15,138
22%
90% 24,457
23,113
‐5% 46,874
48,484
3%
48%
Operating Income
33,261
29,645
36,899
11%
24% 65,803
66,544
1% 129,709
133,371
3%
50%
Operating Expenses
11,766
11,541
12,508
6%
8% 22,764
24,049
6% 47,448
48,596
2%
49%
Provision expenses (Reversal)
5,131
5,010
8,512
66%
70% 8,732
13,522
55% 29,723
24,312
‐18%
56%
Tax expenses
3,132
2,558
3,018
‐4%
18% 6,409
5,575
‐13% 11,498
11,004
‐4%
51%
Extraordinary items
‐
‐
‐
NM
(4,031)
NM
0%
Net Profit
13,218
10,546
12,818
‐3%
22% 26,369
23,364
‐11% 47,182
45,388
‐4%
51%
EPS (Bt)
3.89
3.10
3.77
‐3%
22% 7.76
6.87
‐11% 13.88
13.35
‐4%
51%
Key Statistics and Ratios Gross NPLs (Btmn)
NM 6,200
2Q15
1Q16
2Q16
1H15
1H16
2015
46,003
55,137
57,076
46,003
57,076
58,996
Gross NPLs/Loans
2.22%
Loan Loss Reserve/NPLs
NM (1,500) ‐
2.64%
2016E 64,692
2.77%
2.22%
2.77%
2.89%
3.04%
134.8% 122.8% 130.0%
134.8%
130.0%
109.8%
126.4%
Tier I/Risk Assets
13.8%
14.0%
14.6%
13.8%
14.6%
14.1%
14.9%
Capital Adequacy Ratio
17.0%
17.0%
17.5%
17.0%
17.5%
17.3%
17.1%
Loan to Deposit Ratio
95.3%
94.2%
99.5%
95.3%
99.5%
97.0%
96.5%
Loan to Deposit & borrowing
89.8%
88.8%
93.5%
89.8%
93.5%
91.1%
91.0%
Provision to loans
1.13%
1.09%
1.83%
0.96%
1.45%
1.65%
1.30%
Cost to Income
35.4%
38.9%
33.9%
34.6%
36.1%
36.6%
36.4%
Non Interest Inc./Total Income
37.4%
26.9%
41.0%
37.2%
34.7%
36.1%
36.4%
Net Interest Margin
3.19%
3.24%
3.24%
3.17%
3.29%
3.18%
3.12%
Tax rate
19.1%
19.5%
19.0%
19.5%
19.2%
19.6%
19.5%
4.8%
1.6%
2.5%
4.8%
2.5%
3.2%
4.0%
Loan Growth QoQ 0.3% Source: Bloomberg and KTZMICO Research
0.3%
1.3%
0.3%
1.3%
Loan Growth YoY
Figure 2: SCB's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 3.0
2016E
2.8
+2 S.D.
2.6
+1.5 S.D. +1.0 S.D. +0.5 S.D. Avg.
2.4 2.2 2.0
-0.5 S.D. -1 S.D. -1.5 S.D. -2 S.D. -2.5 S.D.
1.8 1.6 1.4 1.2
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
1.0
PBV (x)
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
2.7
271
78
+1.5SD
2.5
253
66
+1.0SD
2.3
236
55
+0.5SD
2.2
218
43
Average
2.0
201
32
-0.5SD
1.8
184
20
-1.0SD
1.6
166
9
-1.5SD
1.5
149
-3
-2.0SD
1.3
131
-14
-2.0SD
1.1
114
-25
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: SCB's PER band and sensitivity of market prices based on PER at different standard deviation levels 18 16 14 12 10 8 6
(X)
2016E
PER (x)
+2 S.D.
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+1.5 S.D.
+2.0SD
15.5
207
35
+1 S.D. -0.5 S.D.
+1.5SD
14.2
189
24
+1.0SD
12.9
172
13
-0.5 S.D.
+0.5SD
11.6
155
2
-1 S.D.
Average
10.3
138
-10
-0.5SD
9.0
121
-21
-1.0SD
7.7
103
-32
-1.5SD
6.5
86
-43
-2.0SD
5.2
69
-55
Avg.
-1.5 S.D. -2 S.D.
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
4
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, PACE, PLE, TPOLY. KT ZMICO is a co‐underwriter of ALT, EKH.
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)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator 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
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Earnings Review
Close Bt153.50
Banking July 21, 2016
Beat forecast/Below forecast/In line
2Q16 earnings above estimate Price Performance (%)
Recent price rally could narrow further upside We maintain our Underperform rating as the recent price rally could limit further upside potential, leaving no upside vs. our 16E TP and little upside potential vs. our tentative 17E TP of Bt155‐160/share (+/‐). 2Q16 results above both our forecast and the street by 6‐9% SCB posted 2Q16 net profit (NP) of Bt12.8bn (‐3% YoY, +22% QoQ) above both our forecast (Bt12.1bn) by 6% and the consensus estimate (Bt11.8bn) by 9%. The better‐than‐expected NP vs. our forecast was mainly due to higher‐than‐expected NIM. Some extra income in 2Q16 following the accounting adjustment in 1Q16
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
13.554
15.410
KT ZMICO vs. consensus Share data
‐1.5%
0.0%
Reuters / Bloomberg
SCB.BK/SCB TB
Paid‐up Shares (m)
3,395.13
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
521.00/14,886.00
Foreign limit / actual (%)
45.81/33.76
52 week High / Low (Bt)
154.00/112.00
Avg. daily T/O (shares 000) NVDR (%)
7,886.00 4.89
Estimated free float (%)
62.81
Beta
1.47
URL
www.scb.co.th
CGR
Level 4 (Certified)
Anti‐corruption
Note that in the audited financial statement for 1Q16, SCB decided to keep the accounting for SCB Life unchanged after the unaudited statements (announced on 22 Apr‐16), in which it chose to adapt new accounting standard (TFRS 4), resulting in a net negative pre‐tax impact of ~Bt4bn (‐Bt3.2bn post‐tax impact) in 1Q16. Hence, in 2Q16 SCB booked a reversal of a policy reserve (Bt4.3bn) at SCB Life following its decision to retain accounting policies as applied in the previous year. Note that this extra item for both quarters was booked through the net insurance claim item. Given this extra income reversal in 2Q16, SCB also set a high provision of Bt8.5bn (183 bps) vs. Bt5bn (109bps) in 1Q16. 2Q16 net profit stood at Bt12.8bn (‐3% YoY, +22% QoQ) The main reason behind the higher NP QoQ was the booking of extra income as mentioned earlier. Meanwhile, NIM was better than our forecast as it remained stable QoQ despite the negative of the MLR rate cut in early Apr‐16 thanks to its efficient funding cost management. Meanwhile, loan growth remained slow at +2.5% YoY and +1.5% YTD. Net fee income for 2Q16 dropped by 3% YoY and 6% QoQ. Asset quality weakened QoQ The bank’s NPL ratio in 2Q16 increased QoQ to 2.77% from 2.64% of loans, mainly on higher NPLs in housing loans. The higher provisioning in 2Q16 resulted in a higher reserve‐to‐NPL ratio QoQ to 130% in 2Q16 from 123% in 1Q16 and a higher reserve to the BoT’s required reserve QoQ to 140% from 129% in 1Q16. However, given the weak macro recovery, we still expect the bank’s NPLs to increase in 2016. Financials and Valuation 2014
2015
2016E
2017E
2018E
PPOP (Btm)
64,303
69,072
72,257
75,716
79,273
Net profit (Btm)
53,335
47,182
45,388
52,396
60,417
15.69
13.88
13.35
15.41
17.77
FY Ended 31 Dec
EPS (Bt)
Prapharas Nonthapiboon
EPS growth (%)
6%
‐12%
‐4%
15%
15%
Book value (Bt)
83.94
90.45
101.57
112.25
124.81
Dividend (Bt)
6.00
5.50
5.00
5.50
6.22
Analyst, no 17836
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
[email protected]
PER (X)
9.78
11.06
11.50
9.96
8.64
66 (0) 2695‐5872
PBV (X)
1.83
1.70
1.51
1.37
1.23
Dividend yield (%) ROE (%)
3.91
3.58
3.26
3.58
4.05
20.1%
15.9%
13.9%
14.4%
15%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q16 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
2Q15
1Q16
2Q16 % YoY % QoQ
1H15
1H16 % YoY
2015
2016E % YoY 1H to 16E
Net Interest Income
20,814
21,670
21,761
5%
0% 41,346
43,431
5% 82,834
84,887
2%
51%
Non Interest Income
12,447
7,975
15,138
22%
90% 24,457
23,113
‐5% 46,874
48,484
3%
48%
Operating Income
33,261
29,645
36,899
11%
24% 65,803
66,544
1% 129,709
133,371
3%
50%
Operating Expenses
11,766
11,541
12,508
6%
8% 22,764
24,049
6% 47,448
48,596
2%
49%
Provision expenses (Reversal)
5,131
5,010
8,512
66%
70% 8,732
13,522
55% 29,723
24,312
‐18%
56%
Tax expenses
3,132
2,558
3,018
‐4%
18% 6,409
5,575
‐13% 11,498
11,004
‐4%
51%
Extraordinary items
‐
‐
‐
NM
(4,031)
NM
0%
Net Profit
13,218
10,546
12,818
‐3%
22% 26,369
23,364
‐11% 47,182
45,388
‐4%
51%
EPS (Bt)
3.89
3.10
3.77
‐3%
22% 7.76
6.87
‐11% 13.88
13.35
‐4%
51%
Key Statistics and Ratios Gross NPLs (Btmn)
NM 6,200
2Q15
1Q16
2Q16
1H15
1H16
2015
46,003
55,137
57,076
46,003
57,076
58,996
Gross NPLs/Loans
2.22%
Loan Loss Reserve/NPLs
NM (1,500) ‐
2.64%
2016E 64,692
2.77%
2.22%
2.77%
2.89%
3.04%
134.8% 122.8% 130.0%
134.8%
130.0%
109.8%
126.4%
Tier I/Risk Assets
13.8%
14.0%
14.6%
13.8%
14.6%
14.1%
14.9%
Capital Adequacy Ratio
17.0%
17.0%
17.5%
17.0%
17.5%
17.3%
17.1%
Loan to Deposit Ratio
95.3%
94.2%
99.5%
95.3%
99.5%
97.0%
96.5%
Loan to Deposit & borrowing
89.8%
88.8%
93.5%
89.8%
93.5%
91.1%
91.0%
Provision to loans
1.13%
1.09%
1.83%
0.96%
1.45%
1.65%
1.30%
Cost to Income
35.4%
38.9%
33.9%
34.6%
36.1%
36.6%
36.4%
Non Interest Inc./Total Income
37.4%
26.9%
41.0%
37.2%
34.7%
36.1%
36.4%
Net Interest Margin
3.19%
3.24%
3.24%
3.17%
3.29%
3.18%
3.12%
Tax rate
19.1%
19.5%
19.0%
19.5%
19.2%
19.6%
19.5%
4.8%
1.6%
2.5%
4.8%
2.5%
3.2%
4.0%
Loan Growth QoQ 0.3% Source: Bloomberg and KTZMICO Research
0.3%
1.3%
0.3%
1.3%
Loan Growth YoY
Figure 2: SCB's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 3.0
2016E
2.8
+2 S.D.
2.6
+1.5 S.D. +1.0 S.D. +0.5 S.D. Avg.
2.4 2.2 2.0
-0.5 S.D. -1 S.D. -1.5 S.D. -2 S.D. -2.5 S.D.
1.8 1.6 1.4 1.2
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
1.0
PBV (x)
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
2.7
271
78
+1.5SD
2.5
253
66
+1.0SD
2.3
236
55
+0.5SD
2.2
218
43
Average
2.0
201
32
-0.5SD
1.8
184
20
-1.0SD
1.6
166
9
-1.5SD
1.5
149
-3
-2.0SD
1.3
131
-14
-2.0SD
1.1
114
-25
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: SCB's PER band and sensitivity of market prices based on PER at different standard deviation levels 18 16 14 12 10 8 6
(X)
2016E
PER (x)
+2 S.D.
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+1.5 S.D.
+2.0SD
15.5
207
35
+1 S.D. -0.5 S.D.
+1.5SD
14.2
189
24
+1.0SD
12.9
172
13
-0.5 S.D.
+0.5SD
11.6
155
2
-1 S.D.
Average
10.3
138
-10
-0.5SD
9.0
121
-21
-1.0SD
7.7
103
-32
-1.5SD
6.5
86
-43
-2.0SD
5.2
69
-55
Avg.
-1.5 S.D. -2 S.D.
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
4
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, PACE, PLE, TPOLY. KT ZMICO is a co‐underwriter of ALT, EKH.
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)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator 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
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
