3Q16 net profit quite in line with both our estimate and the street
TISCO Financial Group Underperform (17E TP Bt49.00)
Earnings Review
Close Bt53.25
Banking October 11, 2016
Beat forecast/Below forecast/In line
3Q16 net profit quite in line with both our estimate and the street Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
6.322
6.528
KT ZMICO vs. consensus Share data
‐8.7%
‐7.2%
Reuters / Bloomberg
TISCO.BK/TISCO TB
Paid‐up Shares (m)
800.64
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
43.00/1,215.00
Foreign limit / actual (%)
49.00/49.00
52 week High / Low (Bt)
57.00/36.25
Avg. daily T/O (shares 000)
1,835.00
NVDR (%)
14.99
Estimated free float (%)
74.06
Beta
0.79
URL
www.tisco.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Fully valued We maintain our Underperform rating for TISCO as the current price posts no upside potential when compared to our 17E target price. Meanwhile, its solid dividend yield for 2016E of ~4% will not be paid until mid‐2017 as TISCO pays dividends on an annual basis. 3Q16 net profit quite in line with both our forecast and the street TISCO’s 3Q16 net profit (NP) of Bt1.25bn was quite in line with our forecast (Bt1.19bn) and the street estimate (Bt1.23bn). Meanwhile, core profit was 10% ahead of our estimate due largely to higher‐than‐ expected NIM and net fee income. 3Q16 net profit stood at Bt1.25bn (+54% YoY, +4% QoQ) The sharp NP hike YoY was due to the low base NP effect in 3Q15 as TISCO set a massive provision of Bt2.2bn in 3Q15 (vs. Bt1.1bn in 3Q16 which included a general provision of Bt361mn to cushion against business volatility) for loans to the SSI Group, which were classified as NPLs in 3Q15. Meanwhile, the higher NP QoQ was due largely to higher NIM and stronger net fee income growth QoQ, driven mainly by improving income related to the capital market, especially in the brokerage and asset management businesses. However, loans remained weak with a contraction by 1.9% QoQ, 4.6% YoY and 5.0% YTD vs. our estimate of ‐5.4% for 2016E. Asset quality and reserve position improved QoQ Its NPLs for 3Q16 declined QoQ, but the NPL ratio was quite stable QoQ at 3.04% of loans due largely to a continuing loan contraction. The decline in NPLs was mainly from the continued decline of NPLs in auto hire purchase loans despite the increase in NPLs in some commercial loans. Meanwhile, its loan loss reserve (LLR) to NPLs improved QoQ to 107% from 97%, while its LLR to the BoT’s required LLR in 3Q16 improved QoQ to 153% from 144% in 2Q16. 9M16 net profit up 23% YoY, representing 80% of FY16 NP forecast The 9M16 net profit stood at Bt3.71bn (+23% YoY), thanks mainly to higher NIM along with a lower provision for losses on repossessed cars and provision for loan loss. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PPOP (Btm)
8,412
9,399
8,451
8,155
8,343
Net profit (Btm)
4,250
4,250
4,623
4,855
5,137
EPS (Bt)
5.31
5.31
5.77
6.06
6.42
EPS growth (%)
0.0%
0.0%
8.8%
5.0%
5.8%
Dividend (Bt)
2.00
2.20
2.30
2.40
2.50
32.14
35.09
38.75
42.61
46.72 2018E
Book value (Bt)
Prapharas Nonthapiboon
FY Ended 31 Dec
2014
2015
2016E
2017E
Analyst, no 17836
PER (X)
10.03
0.00
9.22
8.78
8.30
[email protected]
PBV (X)
1.66
1.52
1.37
1.25
1.14
66 (0) 2695‐5872
Dividend yield (%) ROE (%)
3.76 17.4%
4.13 15.8%
4.32 15.6%
4.51 14.9%
4.69 14.4%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 3Q16 earnings results Statement of Comprehensive Income 3Q15
2Q16
3Q16 % YoY % QoQ
9M15
9M16 % YoY
2015 2016E % YoY % 9M to 16E
Fiscal Year‐Ended December Net Interes t Income
2,617
2,691
2,767
6%
3% 7,465
8,150
Non Interes t Income
1,561
1,409
1,627
4%
15% 4,793
4,549
Opera ti ng Income
4,178
4,099
4,394
5%
7% 12,258
12,699
Opera ti ng Expens es
1,010
1,676
1,717
70%
2% 4,131
5,051
22%
5,923
6,743
14%
75%
Opera ti ng Profi t
2,967
2,137
2,358
‐21%
10% 7,272
6,724
‐8%
9,404
8,459
‐10%
79%
Provi s i on (Revers a l )
2,166
926
1,101
‐49%
19% 4,381
3,008
‐31%
5,277
3,848
‐27%
78%
Ta xes Net Profi t PPOP EPS (Bt)
197 810 2,971 1.01
289 1,208 2,136 1.51
317 1,250 2,349 1.56
61% 54% ‐21% 54%
10% 4% 10% 4%
915 3,713 6,711 4.64
25% 23% ‐8% 24%
1,032 4,250 9,399 5.31
1,122 4,623 8,451 5.77
9% 9% ‐10% 9%
82% 80% 79% 80%
Key Statistics & Ratios
3Q15
Gros s NPLs (Btmn) Gros s NPLs /Loa ns
6,359
5,990
4% 16,489 16,344
9M15
9M16
7,841
6,886
7,701
3.30% 3.03% 3.04%
3.30%
3.04%
3.23% 3.06%
7,000
3Q16
‐5%
6,886
7,841
2Q16
732 3,006 7,264 3.75
9% 10,130 10,354
‐1%
78%
6,892
74.1% 97.0% 107.0%
74.1% 107.0%
80.1% 109.1%
Ti er I/Ri s k As s et
13.9% 14.6% 15.2%
13.9%
15.2%
13.9% 14.5%
Ca pi ta l Adequa cy Ra ti o
17.9% 18.6% 19.9%
17.9%
19.9%
17.9% 18.5%
146.4% 151.9% 147.4%
146.4% 147.4%
150.7% 159.4%
99.5% 105.4% 104.0%
99.5% 104.0%
102.4% 105.5%
Loa n to Depos i ts a nd Borrowi ngs
79% 76%
2015 2016E
Loa n Los s Res erve/NPLs
Loa n to Depos i t Ra ti o
2% ‐6%
Cos t to Income
24.2% 40.9% 39.1%
33.7%
39.8%
35.9% 41.3%
Non Interes t Income/Tota l Income
36.1% 33.2% 36.1%
39.1%
35.8%
38.6% 36.6%
Ta x ra te
19.6% 19.3% 20.1%
19.5%
19.7%
19.5% 19.5%
Net Interes t Ma rgi n
3.51% 3.82% 4.06%
3.23%
3.87%
3.41% 3.82%
Provi s i on to a vera ge l oa ns 3.56% 1.60% 1.93% Loa n growth YoY ‐13.7% ‐7.4% ‐4.6% Loa n growth QoQ ‐4.8% ‐1.0% ‐1.9% Source: Bloomberg and KTZMICO Research
2.35% ‐13.7% ‐4.8%
1.73% ‐4.6% ‐1.9%
2.11% 1.66% ‐9.3% ‐5.4%
Figure 2: TISCO's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.4 2.0 1.6
+2 S.D. +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.
1.2 0.8
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-16
Jul-15
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jul-09
Jan-10
Jan-09
0.4
2016E
PBV (x)
Implied market Upside/ Downside price (Bt) to current price (%)
+2.0SD
2.0
78
47
+1.5SD
1.9
72
35
+1.0SD
1.7
66
24
+0.5SD
1.6
60
13
Average
1.4
54
2
-0.5SD
1.2
48
-9
-1.0SD
1.1
42
-20
-1.5SD
0.9
37
-31
-2.0SD
0.8
31
-43
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
10.6
61
15
+1.5SD
9.9
57
7
+1.0SD
9.2
53
0
+0.5SD
8.6
49
-7
Average
7.9
46
-14
4
-0.5SD
7.2
42
-22
3
-1.0SD
6.6
38
-29
-1.5SD
5.9
34
-36
-2.0SD
5.2
30
-43
12
-0.5 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-16
Jul-15
Jan-15
Jul-14
Jul-13
Jul-09
Jan-10
Jan-09
5
Jan-14
6
Jul-12
-1 S.D. -1.5 S.D. -2 S.D.
Jan-13
7
Jul-11
8
Jan-12
9
+1.5 S.D. +1 S.D. +0.5 S.D. Avg.
Jul-10
10
Jan-11
11
+2 S.D.
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, TPOLY, M‐CHAI, TFD, SUTHA. KT ZMICO is a co‐underwriter of RJH, BCPG, ITEL, SQ, ALLA.
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 Bt53.25
Banking October 11, 2016
Beat forecast/Below forecast/In line
3Q16 net profit quite in line with both our estimate and the street Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
6.322
6.528
KT ZMICO vs. consensus Share data
‐8.7%
‐7.2%
Reuters / Bloomberg
TISCO.BK/TISCO TB
Paid‐up Shares (m)
800.64
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
43.00/1,215.00
Foreign limit / actual (%)
49.00/49.00
52 week High / Low (Bt)
57.00/36.25
Avg. daily T/O (shares 000)
1,835.00
NVDR (%)
14.99
Estimated free float (%)
74.06
Beta
0.79
URL
www.tisco.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Fully valued We maintain our Underperform rating for TISCO as the current price posts no upside potential when compared to our 17E target price. Meanwhile, its solid dividend yield for 2016E of ~4% will not be paid until mid‐2017 as TISCO pays dividends on an annual basis. 3Q16 net profit quite in line with both our forecast and the street TISCO’s 3Q16 net profit (NP) of Bt1.25bn was quite in line with our forecast (Bt1.19bn) and the street estimate (Bt1.23bn). Meanwhile, core profit was 10% ahead of our estimate due largely to higher‐than‐ expected NIM and net fee income. 3Q16 net profit stood at Bt1.25bn (+54% YoY, +4% QoQ) The sharp NP hike YoY was due to the low base NP effect in 3Q15 as TISCO set a massive provision of Bt2.2bn in 3Q15 (vs. Bt1.1bn in 3Q16 which included a general provision of Bt361mn to cushion against business volatility) for loans to the SSI Group, which were classified as NPLs in 3Q15. Meanwhile, the higher NP QoQ was due largely to higher NIM and stronger net fee income growth QoQ, driven mainly by improving income related to the capital market, especially in the brokerage and asset management businesses. However, loans remained weak with a contraction by 1.9% QoQ, 4.6% YoY and 5.0% YTD vs. our estimate of ‐5.4% for 2016E. Asset quality and reserve position improved QoQ Its NPLs for 3Q16 declined QoQ, but the NPL ratio was quite stable QoQ at 3.04% of loans due largely to a continuing loan contraction. The decline in NPLs was mainly from the continued decline of NPLs in auto hire purchase loans despite the increase in NPLs in some commercial loans. Meanwhile, its loan loss reserve (LLR) to NPLs improved QoQ to 107% from 97%, while its LLR to the BoT’s required LLR in 3Q16 improved QoQ to 153% from 144% in 2Q16. 9M16 net profit up 23% YoY, representing 80% of FY16 NP forecast The 9M16 net profit stood at Bt3.71bn (+23% YoY), thanks mainly to higher NIM along with a lower provision for losses on repossessed cars and provision for loan loss. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PPOP (Btm)
8,412
9,399
8,451
8,155
8,343
Net profit (Btm)
4,250
4,250
4,623
4,855
5,137
EPS (Bt)
5.31
5.31
5.77
6.06
6.42
EPS growth (%)
0.0%
0.0%
8.8%
5.0%
5.8%
Dividend (Bt)
2.00
2.20
2.30
2.40
2.50
32.14
35.09
38.75
42.61
46.72 2018E
Book value (Bt)
Prapharas Nonthapiboon
FY Ended 31 Dec
2014
2015
2016E
2017E
Analyst, no 17836
PER (X)
10.03
0.00
9.22
8.78
8.30
[email protected]
PBV (X)
1.66
1.52
1.37
1.25
1.14
66 (0) 2695‐5872
Dividend yield (%) ROE (%)
3.76 17.4%
4.13 15.8%
4.32 15.6%
4.51 14.9%
4.69 14.4%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 3Q16 earnings results Statement of Comprehensive Income 3Q15
2Q16
3Q16 % YoY % QoQ
9M15
9M16 % YoY
2015 2016E % YoY % 9M to 16E
Fiscal Year‐Ended December Net Interes t Income
2,617
2,691
2,767
6%
3% 7,465
8,150
Non Interes t Income
1,561
1,409
1,627
4%
15% 4,793
4,549
Opera ti ng Income
4,178
4,099
4,394
5%
7% 12,258
12,699
Opera ti ng Expens es
1,010
1,676
1,717
70%
2% 4,131
5,051
22%
5,923
6,743
14%
75%
Opera ti ng Profi t
2,967
2,137
2,358
‐21%
10% 7,272
6,724
‐8%
9,404
8,459
‐10%
79%
Provi s i on (Revers a l )
2,166
926
1,101
‐49%
19% 4,381
3,008
‐31%
5,277
3,848
‐27%
78%
Ta xes Net Profi t PPOP EPS (Bt)
197 810 2,971 1.01
289 1,208 2,136 1.51
317 1,250 2,349 1.56
61% 54% ‐21% 54%
10% 4% 10% 4%
915 3,713 6,711 4.64
25% 23% ‐8% 24%
1,032 4,250 9,399 5.31
1,122 4,623 8,451 5.77
9% 9% ‐10% 9%
82% 80% 79% 80%
Key Statistics & Ratios
3Q15
Gros s NPLs (Btmn) Gros s NPLs /Loa ns
6,359
5,990
4% 16,489 16,344
9M15
9M16
7,841
6,886
7,701
3.30% 3.03% 3.04%
3.30%
3.04%
3.23% 3.06%
7,000
3Q16
‐5%
6,886
7,841
2Q16
732 3,006 7,264 3.75
9% 10,130 10,354
‐1%
78%
6,892
74.1% 97.0% 107.0%
74.1% 107.0%
80.1% 109.1%
Ti er I/Ri s k As s et
13.9% 14.6% 15.2%
13.9%
15.2%
13.9% 14.5%
Ca pi ta l Adequa cy Ra ti o
17.9% 18.6% 19.9%
17.9%
19.9%
17.9% 18.5%
146.4% 151.9% 147.4%
146.4% 147.4%
150.7% 159.4%
99.5% 105.4% 104.0%
99.5% 104.0%
102.4% 105.5%
Loa n to Depos i ts a nd Borrowi ngs
79% 76%
2015 2016E
Loa n Los s Res erve/NPLs
Loa n to Depos i t Ra ti o
2% ‐6%
Cos t to Income
24.2% 40.9% 39.1%
33.7%
39.8%
35.9% 41.3%
Non Interes t Income/Tota l Income
36.1% 33.2% 36.1%
39.1%
35.8%
38.6% 36.6%
Ta x ra te
19.6% 19.3% 20.1%
19.5%
19.7%
19.5% 19.5%
Net Interes t Ma rgi n
3.51% 3.82% 4.06%
3.23%
3.87%
3.41% 3.82%
Provi s i on to a vera ge l oa ns 3.56% 1.60% 1.93% Loa n growth YoY ‐13.7% ‐7.4% ‐4.6% Loa n growth QoQ ‐4.8% ‐1.0% ‐1.9% Source: Bloomberg and KTZMICO Research
2.35% ‐13.7% ‐4.8%
1.73% ‐4.6% ‐1.9%
2.11% 1.66% ‐9.3% ‐5.4%
Figure 2: TISCO's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.4 2.0 1.6
+2 S.D. +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.
1.2 0.8
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-16
Jul-15
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jul-09
Jan-10
Jan-09
0.4
2016E
PBV (x)
Implied market Upside/ Downside price (Bt) to current price (%)
+2.0SD
2.0
78
47
+1.5SD
1.9
72
35
+1.0SD
1.7
66
24
+0.5SD
1.6
60
13
Average
1.4
54
2
-0.5SD
1.2
48
-9
-1.0SD
1.1
42
-20
-1.5SD
0.9
37
-31
-2.0SD
0.8
31
-43
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
10.6
61
15
+1.5SD
9.9
57
7
+1.0SD
9.2
53
0
+0.5SD
8.6
49
-7
Average
7.9
46
-14
4
-0.5SD
7.2
42
-22
3
-1.0SD
6.6
38
-29
-1.5SD
5.9
34
-36
-2.0SD
5.2
30
-43
12
-0.5 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-16
Jul-15
Jan-15
Jul-14
Jul-13
Jul-09
Jan-10
Jan-09
5
Jan-14
6
Jul-12
-1 S.D. -1.5 S.D. -2 S.D.
Jan-13
7
Jul-11
8
Jan-12
9
+1.5 S.D. +1 S.D. +0.5 S.D. Avg.
Jul-10
10
Jan-11
11
+2 S.D.
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, TPOLY, M‐CHAI, TFD, SUTHA. KT ZMICO is a co‐underwriter of RJH, BCPG, ITEL, SQ, ALLA.
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.
