4Q15 earnings slightly below estimate on lower Non-NII
The Siam Commercial Bank Outperform (16E TP Bt148.00)
Earnings Review
Close Bt118.00
Banking January 20, 2016
Beat forecast/Below forecast/In line
4Q15 earnings slightly below estimate on lower Non‐NII Price Performance (%)
Source: SET Smart Consensus EPS (Bt)
FY16
FY17
14.778
16.496
1.9%
‐0.4%
KT ZMICO vs. consensus Share data Reuters / Bloomberg
SCB.BK/SCB TB
Paid‐up Shares (m)
3,394.49
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
401.00/11,043.00
Foreign limit / actual (%)
45.81/35.02
52 week High / Low (Bt)
189.00/112.00
Avg. daily T/O (shares 000) NVDR (%)
6,000.00 3.59
Estimated free float (%)
63.88
Beta
1.25
URL
www.scb.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Risk‐return becoming tempting given its current cheap valuation We maintain our Outperform rating and the 16E TP of Bt148/share. We see the risk‐return becoming tempting given its current trough valuation with its P/BV at the ‐2.5SD level almost at its low level during the crisis, which should largely price in most negatives. 4Q15 net profit slightly below our forecast but above the street SCB’s 4Q15 net profit (NP) of Bt11.8bn (‐4% YoY, +31% QoQ) was slightly below our forecast of Bt12.6bn by 7% but above the consensus estimate of Bt10.9bn by 8%. The lower‐than‐expected NP was mainly due to the weaker‐than‐expected non‐interest income, especially in regard to net premium income in its insurance business and fee income. Meanwhile, NIM was higher than forecast on its much lower funding costs in 4Q15. 4Q15 net profit stood at Bt11.8bn (‐4% YoY, +31% QoQ) The sharp hike in its NP QoQ was mainly due to the low base NP effect in 3Q15 given that SCB set a massive provision (~Bt11bn) for the SSI case even though it was able to find some cushion from the booking of investment gain of ~Bt8bn in 3Q15 to help ease such impact. 2015 net profit stood at Bt47.2bn (‐12% YoY) The 2015 net profit of Bt47.2bn (‐12% YoY) was due largely to the negative impacts from a few main events in 2015: 1) much higher provision expenses (165bps in 2015 vs. 75 bps in 2014), mainly for the SSI case; 2) the booking of a one‐time expense (~Bt1.5bn) relating to a fraud case in the KMITL deposit account (prior to any future recoveries); and 3) some expenses related to the damage to furniture and equipment arising from the fire at SCB’s head office in Feb‐15. However, the bank’s core profit (PPOP) excluding such extra expenses for 2015 still increased by 7% backed mainly by modest loan growth of 3% YoY and 1% QoQ and growth in non‐interest income by 4% YoY. This was backed mainly by the robust 14% growth in its net trading income and FX transactions, thanks partly to FX income related to the FX booths in the airports. Asset quality improved QoQ The bank’s NPLs in 4Q15 declined by Bt3.3bn or 3% QoQ to 2.89% of loans from 3.02% in 3Q15, with new NPL formation also declining QoQ to 0.5% from ~0.63% (if excluding SSI). However, the NPL ratio was still up YoY from 2.1% IN 2014, mainly as a result of the NPL classifications of two large corporate customers (SSI and SSI‐UK) in 3Q15, whose loans collectively amounted to ~Bt22bn, and partly from NPLs in the mortgage and SME segments. Note that SCB wrote off SSI‐UK loans (~Bt11bn) in 3Q15 after it set a full 100% provision for SSI‐UK. This resulted in a lower reserve‐to‐NPL ratio YoY to 110% from 138% in 2014 and a lower reserve to the BoT’s required reserve in 2015 to just 119% from 144% in 2014. Financials and Valuation 2013
2014
2015
2016E
2017E
PPOP (Btm)
62,117
64,303
69,072
72,892
78,709
Net profit (Btm)
50,233
53,335
47,182
51,204
55,856
14.78
15.69
13.88
15.06
16.43
EPS growth (%)
25%
6%
‐12%
9%
9%
Book value (Bt)
112.33
FY Ended 31 Dec
EPS (Bt)
72.45
83.94
90.45
101.79
Dividend (Bt)
5.25
6.00
6.00
6.25
6.50
Prapharas Nonthapiboon
FY Ended 31 Dec
2013
2014
2015
2016E
2017E
Analyst, no 17836
PER (X)
7.98
7.52
8.50
7.83
7.18
[email protected]
PBV (X)
66 (0) 2695‐5872
Dividend yield (%) ROE (%)
1.63
1.41
1.30
1.16
1.05
4.45 21.8%
5.08 20.1%
5.08 15.9%
5.30 15.5%
5.51 15.3%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 4Q15 earnings results Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
4Q14
3Q15
4Q15
% YoY % QoQ
2014
2015
% YoY
Net Interest Income
20,460
20,070
21,418
5%
7%
81,100
82,834
2%
Non Interest Income
11,386
11,521
10,896
-4%
-5%
45,230
46,874
4%
Operating Income
31,846
31,591
32,315
1%
2%
126,330
129,709
3%
Operating Expenses
13,309
11,914
12,770
-4%
7%
48,089
47,448
-1%
Provision expenses (Reversal)
3,564
16,002
4,989
40%
-69%
13,214
29,723
125%
Tax expenses
2,668
2,342
2,747
3%
-
7,700
-
Extraordinary items
17%
13,175
11,498
-13%
-100%
1,800
6,200
244%
Net Profit
12,230
9,018
11,795
-4%
31%
53,335
47,182
-12%
PPOP
12,571
16,741
12,571
0%
-25%
64,303
69,072
7%
3.60
2.65
3.47
-4%
31%
15.69
13.88
-12%
EPS (Bt) Key Statistics and Ratios
4Q14
Gross NPLs (Btmn)
42,743
Gross NPLs/Loans Loan Loss Reserve/NPLs
3Q15
4Q15
62,250
2014
58,996
42,743
2015 58,996
2.11%
3.02%
2.89%
2.11%
2.89%
138.1%
100.8%
109.8%
138.1%
109.8%
Tier I/Risk Assets
13.7%
14.3%
14.1%
13.7%
14.1%
C apital Adequacy Ratio
17.0%
17.5%
17.3%
17.0%
17.3%
Loan to Deposit Ratio
93.8%
94.1%
97.0%
93.8%
97.0%
Loan to Deposit & borrowing
88.4%
88.6%
91.1%
88.4%
91.1%
Provision to loans
0.80%
3.53%
1.09%
0.75%
1.65% 36.6%
C ost to Income
41.8%
37.7%
39.5%
38.1%
Non Interest Inc./Total Income
35.8%
36.5%
33.7%
35.8%
36.1%
Net Interest Margin
3.22%
3.07%
3.28%
3.25%
3.18%
Tax rate
17.8%
20.6%
18.9%
19.7%
19.3%
Loan Growth YoY
2.4%
5.2%
3.2%
2.4%
3.2%
Loan Growth QoQ
3.0%
-0.1%
1.0%
3.0%
Source: Bloomberg and KTZMICO Research
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
270
129
+1.5SD
2.5
254
115
+1.0SD
2.3
237
101
+0.5SD
2.2
221
87
Average
2.0
204
73
-0.5SD
1.8
187
59
-1.0SD
1.7
171
45
-1.5SD
1.5
154
31
-2.0SD
1.4
137
17
-2.0SD
1.2
121
2
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
2016E
(X)
PER (x)
+2 S.D.
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+1.5 S.D.
+2.0SD
15.6
234
99
+1 S.D. -0.5 S.D.
+1.5SD
14.2
214
82
+1.0SD
12.9
195
65
-0.5 S.D.
+0.5SD
11.6
175
48
8
-1 S.D.
Average
10.3
155
32
6
-2 S.D.
-0.5SD
9.0
135
15
-1.0SD
7.7
116
-2
-1.5SD
6.4
96
-19
-2.0SD
5.1
76
-35
14 12 10
Avg.
-1.5 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 is a partnership between KTB and ZMICO. 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. 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% 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 Bt118.00
Banking January 20, 2016
Beat forecast/Below forecast/In line
4Q15 earnings slightly below estimate on lower Non‐NII Price Performance (%)
Source: SET Smart Consensus EPS (Bt)
FY16
FY17
14.778
16.496
1.9%
‐0.4%
KT ZMICO vs. consensus Share data Reuters / Bloomberg
SCB.BK/SCB TB
Paid‐up Shares (m)
3,394.49
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
401.00/11,043.00
Foreign limit / actual (%)
45.81/35.02
52 week High / Low (Bt)
189.00/112.00
Avg. daily T/O (shares 000) NVDR (%)
6,000.00 3.59
Estimated free float (%)
63.88
Beta
1.25
URL
www.scb.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Risk‐return becoming tempting given its current cheap valuation We maintain our Outperform rating and the 16E TP of Bt148/share. We see the risk‐return becoming tempting given its current trough valuation with its P/BV at the ‐2.5SD level almost at its low level during the crisis, which should largely price in most negatives. 4Q15 net profit slightly below our forecast but above the street SCB’s 4Q15 net profit (NP) of Bt11.8bn (‐4% YoY, +31% QoQ) was slightly below our forecast of Bt12.6bn by 7% but above the consensus estimate of Bt10.9bn by 8%. The lower‐than‐expected NP was mainly due to the weaker‐than‐expected non‐interest income, especially in regard to net premium income in its insurance business and fee income. Meanwhile, NIM was higher than forecast on its much lower funding costs in 4Q15. 4Q15 net profit stood at Bt11.8bn (‐4% YoY, +31% QoQ) The sharp hike in its NP QoQ was mainly due to the low base NP effect in 3Q15 given that SCB set a massive provision (~Bt11bn) for the SSI case even though it was able to find some cushion from the booking of investment gain of ~Bt8bn in 3Q15 to help ease such impact. 2015 net profit stood at Bt47.2bn (‐12% YoY) The 2015 net profit of Bt47.2bn (‐12% YoY) was due largely to the negative impacts from a few main events in 2015: 1) much higher provision expenses (165bps in 2015 vs. 75 bps in 2014), mainly for the SSI case; 2) the booking of a one‐time expense (~Bt1.5bn) relating to a fraud case in the KMITL deposit account (prior to any future recoveries); and 3) some expenses related to the damage to furniture and equipment arising from the fire at SCB’s head office in Feb‐15. However, the bank’s core profit (PPOP) excluding such extra expenses for 2015 still increased by 7% backed mainly by modest loan growth of 3% YoY and 1% QoQ and growth in non‐interest income by 4% YoY. This was backed mainly by the robust 14% growth in its net trading income and FX transactions, thanks partly to FX income related to the FX booths in the airports. Asset quality improved QoQ The bank’s NPLs in 4Q15 declined by Bt3.3bn or 3% QoQ to 2.89% of loans from 3.02% in 3Q15, with new NPL formation also declining QoQ to 0.5% from ~0.63% (if excluding SSI). However, the NPL ratio was still up YoY from 2.1% IN 2014, mainly as a result of the NPL classifications of two large corporate customers (SSI and SSI‐UK) in 3Q15, whose loans collectively amounted to ~Bt22bn, and partly from NPLs in the mortgage and SME segments. Note that SCB wrote off SSI‐UK loans (~Bt11bn) in 3Q15 after it set a full 100% provision for SSI‐UK. This resulted in a lower reserve‐to‐NPL ratio YoY to 110% from 138% in 2014 and a lower reserve to the BoT’s required reserve in 2015 to just 119% from 144% in 2014. Financials and Valuation 2013
2014
2015
2016E
2017E
PPOP (Btm)
62,117
64,303
69,072
72,892
78,709
Net profit (Btm)
50,233
53,335
47,182
51,204
55,856
14.78
15.69
13.88
15.06
16.43
EPS growth (%)
25%
6%
‐12%
9%
9%
Book value (Bt)
112.33
FY Ended 31 Dec
EPS (Bt)
72.45
83.94
90.45
101.79
Dividend (Bt)
5.25
6.00
6.00
6.25
6.50
Prapharas Nonthapiboon
FY Ended 31 Dec
2013
2014
2015
2016E
2017E
Analyst, no 17836
PER (X)
7.98
7.52
8.50
7.83
7.18
[email protected]
PBV (X)
66 (0) 2695‐5872
Dividend yield (%) ROE (%)
1.63
1.41
1.30
1.16
1.05
4.45 21.8%
5.08 20.1%
5.08 15.9%
5.30 15.5%
5.51 15.3%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 4Q15 earnings results Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
4Q14
3Q15
4Q15
% YoY % QoQ
2014
2015
% YoY
Net Interest Income
20,460
20,070
21,418
5%
7%
81,100
82,834
2%
Non Interest Income
11,386
11,521
10,896
-4%
-5%
45,230
46,874
4%
Operating Income
31,846
31,591
32,315
1%
2%
126,330
129,709
3%
Operating Expenses
13,309
11,914
12,770
-4%
7%
48,089
47,448
-1%
Provision expenses (Reversal)
3,564
16,002
4,989
40%
-69%
13,214
29,723
125%
Tax expenses
2,668
2,342
2,747
3%
-
7,700
-
Extraordinary items
17%
13,175
11,498
-13%
-100%
1,800
6,200
244%
Net Profit
12,230
9,018
11,795
-4%
31%
53,335
47,182
-12%
PPOP
12,571
16,741
12,571
0%
-25%
64,303
69,072
7%
3.60
2.65
3.47
-4%
31%
15.69
13.88
-12%
EPS (Bt) Key Statistics and Ratios
4Q14
Gross NPLs (Btmn)
42,743
Gross NPLs/Loans Loan Loss Reserve/NPLs
3Q15
4Q15
62,250
2014
58,996
42,743
2015 58,996
2.11%
3.02%
2.89%
2.11%
2.89%
138.1%
100.8%
109.8%
138.1%
109.8%
Tier I/Risk Assets
13.7%
14.3%
14.1%
13.7%
14.1%
C apital Adequacy Ratio
17.0%
17.5%
17.3%
17.0%
17.3%
Loan to Deposit Ratio
93.8%
94.1%
97.0%
93.8%
97.0%
Loan to Deposit & borrowing
88.4%
88.6%
91.1%
88.4%
91.1%
Provision to loans
0.80%
3.53%
1.09%
0.75%
1.65% 36.6%
C ost to Income
41.8%
37.7%
39.5%
38.1%
Non Interest Inc./Total Income
35.8%
36.5%
33.7%
35.8%
36.1%
Net Interest Margin
3.22%
3.07%
3.28%
3.25%
3.18%
Tax rate
17.8%
20.6%
18.9%
19.7%
19.3%
Loan Growth YoY
2.4%
5.2%
3.2%
2.4%
3.2%
Loan Growth QoQ
3.0%
-0.1%
1.0%
3.0%
Source: Bloomberg and KTZMICO Research
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
270
129
+1.5SD
2.5
254
115
+1.0SD
2.3
237
101
+0.5SD
2.2
221
87
Average
2.0
204
73
-0.5SD
1.8
187
59
-1.0SD
1.7
171
45
-1.5SD
1.5
154
31
-2.0SD
1.4
137
17
-2.0SD
1.2
121
2
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
2016E
(X)
PER (x)
+2 S.D.
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+1.5 S.D.
+2.0SD
15.6
234
99
+1 S.D. -0.5 S.D.
+1.5SD
14.2
214
82
+1.0SD
12.9
195
65
-0.5 S.D.
+0.5SD
11.6
175
48
8
-1 S.D.
Average
10.3
155
32
6
-2 S.D.
-0.5SD
9.0
135
15
-1.0SD
7.7
116
-2
-1.5SD
6.4
96
-19
-2.0SD
5.1
76
-35
14 12 10
Avg.
-1.5 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 is a partnership between KTB and ZMICO. 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. 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% 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
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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
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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
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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.
