2Q16 net profit in line with both our estimate and the street
TISCO Financial Group Underperform (16E TP Bt44.00)
Earnings Review
Close Bt53.00
Banking July 12, 2016
Beat forecast/Below forecast/In line
2Q16 net profit in line with both our estimate and the street Price Performance (%)
Source: SET
FY16
FY17
Consensus EPS (Bt)
6.096
6.453
KT ZMICO vs. consensus Share data
‐4.9%
‐5.8%
Reuters / Bloomberg
TISCO.BK/TISCO TB
Paid‐up Shares (m)
800.64
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
42.43/1,208.61
Foreign limit / actual (%)
49.00/49.00
52 week High / Low (Bt)
53.25/34.00
Avg. daily T/O (shares 000)
1,526.00
NVDR (%)
12.59
Estimated free float (%)
74.06
Beta
0.75
URL
www.tisco.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Fully valued We maintain our Underperform rating as the recent price rally (+8% in 1 week and +20% in 1 month) could limit further upside and post no upside potential when compared to both our 16E target price of Bt44/share and around Bt50/share (+/‐) if we shift to use the 17E TP. Meanwhile, its solid dividend yield for 2016E of 4‐5% will not be paid until mid‐2017 as TISCO pays dividends on an annual basis. 2Q16 net profit in line with both our forecast and the street TISCO’s 2Q16 net profit (NP) of Bt1,208mn was quite in line with our forecast (Bt1,267mn) and the street estimate (Bt1,262mn). Meanwhile, core profit was relatively in line with our estimate. 2Q16 net profit stood at Bt1,208mn (+20% YoY, ‐4% QoQ) The higher NP YoY was driven mainly by 1) a much stronger net interest margin (NIM), especially on a YoY basis, on the benefit of the low interest rate environment; and 2) a lower provision. Loans remained weak with a contraction by 7% YoY and 1% QoQ, mainly on the decline in auto hire purchase loans by 3% QoQ and 5% YTD. Asset quality improved QoQ Its NPLs for 2Q16 declined QoQ to 3.03% of loans from 3.07% in 1Q16, mainly from the continuing decline of NPLs in auto hire purchase loans. Meanwhile, its loan loss reserve (LLR) to NPLs improved QoQ to 97% from 89% but still declined from 107% in 2Q15. Its LLR to the BoT’s required LLR in 2Q16 improved QoQ to 144% from 139% in 1Q16, but it was still down from 162% in 2Q15 on the impact from the NPL classification of SSI (Bt821mn) since 3Q15. Given weaker reserve ratios YoY, TISCO still aims to build up its reserve position as it continued to set a high provision of Bt926mn (160 bps) in 2Q16, which included a general provision of Bt250mn to cushion against business volatility. 1H16 net profit up 12% YoY The 1H16 net profit stood at Bt2,463mn (+12% YoY), thanks mainly to higher NIM and a lower provision for losses on repossessed cars. As the 1H16 NP represented 53% of our 2016 full‐year net profit forecast, we maintain our 2016 earnings forecast. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PPOP (Btm)
8,412
9,399
8,150
8,028
8,543
Net profit (Btm)
4,250
4,250
4,644
4,866
5,106
EPS (Bt)
5.31
5.31
5.80
6.08
6.38
EPS growth (%)
0.0%
0.0%
9.3%
4.8%
4.9%
Prapharas Nonthapiboon
Dividend (Bt)
2.00
2.20
2.30
2.40
2.50
Analyst, no 17836
Book value (Bt)
32.14
35.09
38.78
42.65
46.72
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PER (X)
9.99
9.98
9.14
8.72
8.31
PBV (X)
1.65
1.51
1.37
1.24
1.13
3.77 17.4%
4.15 15.8%
4.34 15.7%
4.53 14.9%
4.72 14.3%
[email protected] 66 (0) 2695‐5872
Dividend yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q16 earnings results Statement of Comprehensive Income 2Q15 1Q16 2Q16 % YoY % QoQ 1H15 1H16 % YoY 2015 2016E 2,448 2,692 2,691 10% 0% 4,848 5,383 11% 10,130 9,805
Fiscal Year‐Ended December Net Interes t Income
‐10%
6,359
% YoY % 1H to 16E ‐3% 55%
Non Interes t Income
1,616
1,514
1,409
‐13%
‐7% 3,232
2,922
6,290
‐1%
46%
Opera ti ng Income
4,065
4,206
4,099
1%
‐3% 8,079
8,305
3% 16,489 16,095
‐2%
52%
Opera ti ng Expens es
1,568
1,659
1,676
7%
1% 3,122
3,335
7%
5,923
6,737
14%
49%
Opera ti ng Profi t
2,241
2,229
2,137
‐5%
‐4% 4,304
4,366
1%
9,404
8,175
‐13%
53%
Provi s ion (Revers a l )
1,244
981
926
‐26%
‐6% 2,215
1,907
‐14%
5,277
3,536
‐33%
54%
Ta xes Net Profi t PPOP EPS (Bt)
243 1,004 2,235 1.25
309 1,255 2,227 1.57
289 1,208 2,136 1.51
19% 20% ‐4% 20%
‐6% ‐4% ‐4% ‐4%
598 2,463 4,362 3.08
12% 12% 2% 12%
1,032 4,250 9,399 5.31
1,153 4,644 8,150 5.80
12% 9% ‐13% 9%
52% 53% 54% 53%
Key Statistics & Ratios
2Q15
1Q16
2Q16
535 2,196 4,293 2.74 1H15
1H16
2015 2016E
Gros s NPLs (Btmn)
7,137
7,158
7,000
7,137
7,000
7,701
7,547
Gros s NPLs /Loa ns
2.86%
3.07%
3.03%
2.86%
3.03%
3.23%
3.24%
107.2%
89.3%
97.0%
107.2%
97.0%
80.1%
95.5%
13.1%
14.1%
14.6%
13.1%
14.6%
13.9%
14.0%
17.5%
18.1%
18.6%
17.5%
18.6%
17.9%
17.9%
Loa n Los s Res erve/NPLs Ti er I/Ri s k As s et Ca pi tal Adequa cy Rati o Loa n to Depos i t Ra tio
135.3% 152.5% 151.9%
135.3% 151.9%
150.7% 157.4%
Loa n to Depos i ts a nd Borrowi ngs
100.9% 102.3% 105.4%
100.9% 105.4%
102.4% 103.9%
Cos t to Income
38.6%
39.4%
40.9%
38.6%
40.1%
35.9%
41.9%
Non Interes t Income/Tota l Income
37.7%
34.6%
33.2%
40.0%
35.2%
38.6%
39.1%
Ta x ra te
19.4%
19.7%
19.3%
19.5%
19.5%
19.5%
19.8%
Net Interes t Ma rgi n
3.14%
3.73%
3.82%
3.09%
3.78%
3.41%
3.55%
Provi s ion to a vera ge l oa ns 1.98% Loa n growth YoY ‐11.0% Loa n growth QoQ ‐2.0% Source: Bloomberg and KTZMICO Research
1.67% ‐8.4% ‐2.1%
1.60% ‐7.4% ‐1.0%
1.74% ‐11.0% ‐2.0%
1.63% ‐7.4% ‐1.0%
2.11% ‐9.3%
1.50% ‐2.1%
Figure 2: TISCO's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.4 +2 S.D. 2.0 1.6 1.2 0.8
+1.5 S.D. +1 S.D. +0.5 S.D. Avg. -0.5 S.D. -1 S.D. -1.5 S.D. -2 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-16
Jul-15
Jan-16
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jul-10
Jan-11
Jul-09
Jan-10
Jan-09
0.4
2016E
PBV (x)
Implied market Upside/ Downside price (Bt) to current price (%)
+2.0SD
2.0
79
50
+1.5SD
1.9
73
38
+1.0SD
1.7
66
27
+0.5SD
1.6
60
15
Average
1.4
54
4
-0.5SD
1.2
48
-8
-1.0SD
1.1
42
-19
-1.5SD
0.9
36
-31
-2.0SD
0.8
30
-42
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: TISCO's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2016E
PER (x)
+2.0SD
10.5
61
16
+1.5SD
9.9
57
9
+1.0SD
9.2
53
2
+0.5SD
8.5
49
-6
Average
7.8
46
-13
4
-0.5SD
7.2
42
-21
3
-1.0SD
6.5
38
-28
-1.5SD
5.8
34
-35
-2.0SD
5.2
30
-43
12
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-16
Jul-15
Jul-14
Jan-15
Jul-13
Jul-09
Jan-10
Jan-09
5
Jan-14
6
Jan-13
-1 S.D. -1.5 S.D. -2 S.D.
Jul-12
7
-0.5 S.D.
Jan-12
8
+1.5 S.D. +1 S.D. +0.5 S.D. Avg.
Jul-11
9
Jan-11
10
+2 S.D.
Jul-10
11
Implied market Upside/ Downside price (Bt) to current price (%)
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 Bt53.00
Banking July 12, 2016
Beat forecast/Below forecast/In line
2Q16 net profit in line with both our estimate and the street Price Performance (%)
Source: SET
FY16
FY17
Consensus EPS (Bt)
6.096
6.453
KT ZMICO vs. consensus Share data
‐4.9%
‐5.8%
Reuters / Bloomberg
TISCO.BK/TISCO TB
Paid‐up Shares (m)
800.64
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
42.43/1,208.61
Foreign limit / actual (%)
49.00/49.00
52 week High / Low (Bt)
53.25/34.00
Avg. daily T/O (shares 000)
1,526.00
NVDR (%)
12.59
Estimated free float (%)
74.06
Beta
0.75
URL
www.tisco.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Fully valued We maintain our Underperform rating as the recent price rally (+8% in 1 week and +20% in 1 month) could limit further upside and post no upside potential when compared to both our 16E target price of Bt44/share and around Bt50/share (+/‐) if we shift to use the 17E TP. Meanwhile, its solid dividend yield for 2016E of 4‐5% will not be paid until mid‐2017 as TISCO pays dividends on an annual basis. 2Q16 net profit in line with both our forecast and the street TISCO’s 2Q16 net profit (NP) of Bt1,208mn was quite in line with our forecast (Bt1,267mn) and the street estimate (Bt1,262mn). Meanwhile, core profit was relatively in line with our estimate. 2Q16 net profit stood at Bt1,208mn (+20% YoY, ‐4% QoQ) The higher NP YoY was driven mainly by 1) a much stronger net interest margin (NIM), especially on a YoY basis, on the benefit of the low interest rate environment; and 2) a lower provision. Loans remained weak with a contraction by 7% YoY and 1% QoQ, mainly on the decline in auto hire purchase loans by 3% QoQ and 5% YTD. Asset quality improved QoQ Its NPLs for 2Q16 declined QoQ to 3.03% of loans from 3.07% in 1Q16, mainly from the continuing decline of NPLs in auto hire purchase loans. Meanwhile, its loan loss reserve (LLR) to NPLs improved QoQ to 97% from 89% but still declined from 107% in 2Q15. Its LLR to the BoT’s required LLR in 2Q16 improved QoQ to 144% from 139% in 1Q16, but it was still down from 162% in 2Q15 on the impact from the NPL classification of SSI (Bt821mn) since 3Q15. Given weaker reserve ratios YoY, TISCO still aims to build up its reserve position as it continued to set a high provision of Bt926mn (160 bps) in 2Q16, which included a general provision of Bt250mn to cushion against business volatility. 1H16 net profit up 12% YoY The 1H16 net profit stood at Bt2,463mn (+12% YoY), thanks mainly to higher NIM and a lower provision for losses on repossessed cars. As the 1H16 NP represented 53% of our 2016 full‐year net profit forecast, we maintain our 2016 earnings forecast. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PPOP (Btm)
8,412
9,399
8,150
8,028
8,543
Net profit (Btm)
4,250
4,250
4,644
4,866
5,106
EPS (Bt)
5.31
5.31
5.80
6.08
6.38
EPS growth (%)
0.0%
0.0%
9.3%
4.8%
4.9%
Prapharas Nonthapiboon
Dividend (Bt)
2.00
2.20
2.30
2.40
2.50
Analyst, no 17836
Book value (Bt)
32.14
35.09
38.78
42.65
46.72
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PER (X)
9.99
9.98
9.14
8.72
8.31
PBV (X)
1.65
1.51
1.37
1.24
1.13
3.77 17.4%
4.15 15.8%
4.34 15.7%
4.53 14.9%
4.72 14.3%
[email protected] 66 (0) 2695‐5872
Dividend yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q16 earnings results Statement of Comprehensive Income 2Q15 1Q16 2Q16 % YoY % QoQ 1H15 1H16 % YoY 2015 2016E 2,448 2,692 2,691 10% 0% 4,848 5,383 11% 10,130 9,805
Fiscal Year‐Ended December Net Interes t Income
‐10%
6,359
% YoY % 1H to 16E ‐3% 55%
Non Interes t Income
1,616
1,514
1,409
‐13%
‐7% 3,232
2,922
6,290
‐1%
46%
Opera ti ng Income
4,065
4,206
4,099
1%
‐3% 8,079
8,305
3% 16,489 16,095
‐2%
52%
Opera ti ng Expens es
1,568
1,659
1,676
7%
1% 3,122
3,335
7%
5,923
6,737
14%
49%
Opera ti ng Profi t
2,241
2,229
2,137
‐5%
‐4% 4,304
4,366
1%
9,404
8,175
‐13%
53%
Provi s ion (Revers a l )
1,244
981
926
‐26%
‐6% 2,215
1,907
‐14%
5,277
3,536
‐33%
54%
Ta xes Net Profi t PPOP EPS (Bt)
243 1,004 2,235 1.25
309 1,255 2,227 1.57
289 1,208 2,136 1.51
19% 20% ‐4% 20%
‐6% ‐4% ‐4% ‐4%
598 2,463 4,362 3.08
12% 12% 2% 12%
1,032 4,250 9,399 5.31
1,153 4,644 8,150 5.80
12% 9% ‐13% 9%
52% 53% 54% 53%
Key Statistics & Ratios
2Q15
1Q16
2Q16
535 2,196 4,293 2.74 1H15
1H16
2015 2016E
Gros s NPLs (Btmn)
7,137
7,158
7,000
7,137
7,000
7,701
7,547
Gros s NPLs /Loa ns
2.86%
3.07%
3.03%
2.86%
3.03%
3.23%
3.24%
107.2%
89.3%
97.0%
107.2%
97.0%
80.1%
95.5%
13.1%
14.1%
14.6%
13.1%
14.6%
13.9%
14.0%
17.5%
18.1%
18.6%
17.5%
18.6%
17.9%
17.9%
Loa n Los s Res erve/NPLs Ti er I/Ri s k As s et Ca pi tal Adequa cy Rati o Loa n to Depos i t Ra tio
135.3% 152.5% 151.9%
135.3% 151.9%
150.7% 157.4%
Loa n to Depos i ts a nd Borrowi ngs
100.9% 102.3% 105.4%
100.9% 105.4%
102.4% 103.9%
Cos t to Income
38.6%
39.4%
40.9%
38.6%
40.1%
35.9%
41.9%
Non Interes t Income/Tota l Income
37.7%
34.6%
33.2%
40.0%
35.2%
38.6%
39.1%
Ta x ra te
19.4%
19.7%
19.3%
19.5%
19.5%
19.5%
19.8%
Net Interes t Ma rgi n
3.14%
3.73%
3.82%
3.09%
3.78%
3.41%
3.55%
Provi s ion to a vera ge l oa ns 1.98% Loa n growth YoY ‐11.0% Loa n growth QoQ ‐2.0% Source: Bloomberg and KTZMICO Research
1.67% ‐8.4% ‐2.1%
1.60% ‐7.4% ‐1.0%
1.74% ‐11.0% ‐2.0%
1.63% ‐7.4% ‐1.0%
2.11% ‐9.3%
1.50% ‐2.1%
Figure 2: TISCO's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.4 +2 S.D. 2.0 1.6 1.2 0.8
+1.5 S.D. +1 S.D. +0.5 S.D. Avg. -0.5 S.D. -1 S.D. -1.5 S.D. -2 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-16
Jul-15
Jan-16
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jul-10
Jan-11
Jul-09
Jan-10
Jan-09
0.4
2016E
PBV (x)
Implied market Upside/ Downside price (Bt) to current price (%)
+2.0SD
2.0
79
50
+1.5SD
1.9
73
38
+1.0SD
1.7
66
27
+0.5SD
1.6
60
15
Average
1.4
54
4
-0.5SD
1.2
48
-8
-1.0SD
1.1
42
-19
-1.5SD
0.9
36
-31
-2.0SD
0.8
30
-42
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: TISCO's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2016E
PER (x)
+2.0SD
10.5
61
16
+1.5SD
9.9
57
9
+1.0SD
9.2
53
2
+0.5SD
8.5
49
-6
Average
7.8
46
-13
4
-0.5SD
7.2
42
-21
3
-1.0SD
6.5
38
-28
-1.5SD
5.8
34
-35
-2.0SD
5.2
30
-43
12
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-16
Jul-15
Jul-14
Jan-15
Jul-13
Jul-09
Jan-10
Jan-09
5
Jan-14
6
Jan-13
-1 S.D. -1.5 S.D. -2 S.D.
Jul-12
7
-0.5 S.D.
Jan-12
8
+1.5 S.D. +1 S.D. +0.5 S.D. Avg.
Jul-11
9
Jan-11
10
+2 S.D.
Jul-10
11
Implied market Upside/ Downside price (Bt) to current price (%)
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.
