Bangkok Bank - Global Alliance Partners
Bangkok Bank Outperform (16E TP Bt195.00)
Company Update
Close Bt167.50
Banking
Earnings upgrade/Earnings downgrade/Overview unchanged
April 7, 2016
1Q16E earnings outlook likely weak on extra expenses for TTV case Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
18.928
20.773
KT ZMICO vs. consensus Share data
‐1.3%
‐2.1%
Reuters / Bloomberg
BBL.BK/BBL TB
Paid‐up Shares (m)
1,908.84
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
320.00/9,074.00
Foreign limit / actual (%)
25.00/30.48
52 week High / Low (Bt)
192.50/142.50
Avg. daily T/O (shares 000)
4,457.00
NVDR (%)
34.09
Estimated free float (%)
97.47
Beta
0.87
URL
www.bangkokbank.com
CGR
Switch to Outperform from Buy We switch our rating for BBL to Outperform from Buy as we see some potential downside risk to its earnings and TP on its latest MLR rate cut. However, we still expect BBL to be most resilient to the macro headwinds given its healthiest balance sheet. Moreover, its cheap valuation (current P/BV at ‐1.75SD, almost near its five‐year historical low band) should post narrower downside risk on its share price. Maintaining financial targets despite the TTV case BBL maintained its key financial targets despite higher risk from the case of granting a letter of guarantee (L/G) of ~Bt1.64bn for the Thai TV (TTV) case. Note that the TTV case is still likely to be prolonged in the court process for a certain period of time. However, BBL has now moved ahead and decided to provide a full provision for the potential loss of such L/G in other expense items in 1Q16E after the bank booked some expenses in 4Q15 even though the L/G is still not classified as NPLs yet. Expect 1Q16E net profit of Bt8.0bn (‐14% YoY, +5% QoQ) The main reasons behind the NP drop YoY should be 1) a higher provision on weaker asset quality; and 2) lower extra gains on both investments and sales of foreclosed assets YoY (totaling Bt1.75bn in 1Q15 vs. our estimate of ~Bt800mn in 1Q16E); and 3) the booking of extra expenses for the TTV case as mentioned earlier (we assumed ~Bt1.1bn in 1Q16E). Meanwhile, the modest NP improvement QoQ should be due to a lower provision and higher NIM QoQ on the benefits of deposit re‐pricing. NPLs should remain higher QoQ reflecting the weak macro front. See potential downside risk to 16E earnings by ~3‐4% on MLR rate cut BBL followed suit with SCB and KBANK by cutting its MLR by 0.25% to 6.25% effective 6 April 2016. We expect the one‐way MLR rate cut (without lowering the deposit rate) to post downside risk to the bank’s 2016E net profit by around 3‐4% and ~4‐5% for 2017E, and possibly to its 2016E target price (TP) by ~2‐3% (or ~Bt4‐5/share). However, as in the normal scenario, we expect banks including BBL to lower deposit rates soon in order to manage NIM. Therefore, we see the net impact to the net profit and 16E TP likely being lower vs. our estimates. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
34,616
35,680
38,345
41,081
46,062
Provision (Btmn)
8,687
14,654
14,129
12,363
12,013
Net Profit (Btmn)
36,332
34,181
35,671
38,828
43,826 22.96
PPOP (Btmn) Anti‐corruption
Level 4 (Certified)
EPS (Bt)
Prapharas Nonthapiboon
19.03
17.91
18.69
20.34
EPS Growth (%)
1%
‐6%
4%
9%
13%
Book value (Bt)
169.47
189.56
196.90
211.37
228.26
Dividend (Bt)
6.50
6.50
6.50
6.71
6.89
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
Analyst, no 17836
PER (X)
8.80
9.35
8.96
8.23
7.30
[email protected]
PBV (X)
0.99
0.88
0.85
0.79
0.73
66 (0) 2695‐5872
Div. Yield (%) ROE (%)
3.88 12%
3.88 10%
3.88 10%
4.01 10%
4.11 10%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 1Q16E earnings forecast Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
1Q15
4Q15
Net Interest Income
14,235
15,617
Non Interest Income
10,813
Operating Income
25,048
Operating Expenses
10,376
Operating Profit-pre tax
11,936
Provision Expenses (Reversal) Tax expenses (Reversal)
1Q16E
% YoY % QoQ
2015
2016E
12%
2%
10,778
9,928
-8%
-8%
45,218
45,947
2%
22%
26,396
25,887
3%
-2%
102,728
105,881
3%
24%
12,132
12,310
19%
1%
45,045
47,150
5%
26%
11,701
11,727
-2%
0%
44,310
47,042
6%
25%
2,980
3,880
3,500
17%
-10%
14,654
14,129
-4%
25%
2,235
2,642
1,975
-12%
-25%
8,630
8,697
1%
23%
NM
NM
NM
24%
Minority Interest
(50)
(60)
(55)
57,510
59,933
% YoY % 1Q to 16E
15,959
(220)
(233)
4%
27%
Net Profit
9,407
7,681
8,047
-14%
5%
34,181
35,671
4%
23%
PPOP-post tax
9,700
9,058
9,752
1%
8%
35,680
38,345
7%
25%
EPS (Bt)
4.93
4.02
4.22
-14%
5%
17.91
18.69
4%
23%
Key Statistics & Ratios
1Q15
4Q15
Gross NPLs (Btmn)
47,473
Gross NPLs/Loans Loan Loss Reserve/NPLs
56,226
1Q16E
2015
58,475
56,226
2016E 65,720
2.20%
2.80%
2.89%
2.80%
3.01%
189.9%
185.3%
183.3%
185.3%
175.0% 16.1%
Tier I to Risk Assets
15.2%
15.8%
N.A.
15.8%
C apital Adequacy Ratio
17.4%
17.9%
N.A.
17.9%
18.2%
Loan to Deposit Ratio
83.8%
89.4%
88.9%
89.4%
91.4%
Loan to Deposit & Borrowing
78.6%
83.8%
83.5%
83.8%
85.9%
Provision to loans
0.67%
0.83%
0.75%
0.78%
0.72%
C ost to Income
41.4%
46.0%
47.6%
43.8%
44.5%
Non Interest Inc./Total Income
43.2%
40.8%
38.4%
44.0%
43.4%
Net Interest Margin (NIM)
2.18%
2.34%
2.36%
2.17%
2.20%
Tax rate (Reversal)
19.1%
25.4%
19.6%
20.1%
20.0%
Loan Growth YoY
1.6%
4.9%
5.9%
4.9%
5.0%
Loan Growth QoQ
-0.4%
3.3%
0.5%
3.3%
Source: KTZMICO Research
Figure 2: BBL’s financial targets for 2016 vs. our forecasts Financial targets Loan growth (%) Net fee income growth
2014
2015E
2015
Actual
Bank's targets
Actual
2%
2‐3%*
4.9%
2016E
2016E
Bank's targets KTZ's forecasts 3‐5%*
5.0%
2%
6‐8%
10.8%
8% (+/‐)
8.4%
Net interest margin (NIMs)
2.32%
2.0‐2.1%
2.17%
2.2% (+/‐)
2.20%
Cost to Income
45.6%
44‐45%
43.8%
~45%
44.5%
NPL/loans
2.1%
2.7‐2.8%
2.80%
3.2‐3.3%
3.01%
Provision (Btbn)
8.7
~12bn
14.7
~12bn
14.1
Provision (bps of loans)
0.49
~66 bps
0.78
~61 bps
0.72
Source: KT ZMICO Research * Core loan growth excluding government spending & M&A loans.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: BBL's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2016E
1.8 +2 S.D.
1.6 1.4
-0.5 S.D.
1.0
-1 S.D. -1.5 S.D.
+2.0SD
1.61
317
93
+1.5SD
1.51
297
81
+1.0SD
1.40
276
69
+0.5SD
1.30
256
56
Average
1.20
236
44
-0.5SD
1.09
216
31
-1.0SD
0.99
195
19
-1.5SD
0.89
175
7
-2.0SD
0.79
155
-6
-2.5SD
0.68
134
-18
-2 S.D.
Feb-16
Feb-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
-2.5S.D.
Jan-05
0.6
to current price (%)
+1 S.D. +0.5 S.D.
1.2
Upside/ Downside
price (Bt)
+1.5 S.D.
Avg.
0.8
PBV (x) Implied market
Source: Bloomberg, KT ZMICO Research
Figure 4: BBL's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 14.0 13.0
2016E
PER (x) Implied market
+2 S.D. +1.5 S.D.
12.0 11.0
Upside/ Downside
price (Bt)
to current price (%)
+1 S.D.
+2.0SD
13.2
246
50
+0.5 S.D.
+1.5SD
12.5
233
42 34
Avg.
10.0
-0.5 S.D.
+1.0SD
11.8
220
9.0
-1 S.D. -1.5 S.D.
+0.5SD
11.1
208
27
Average
10.4
195
19 11
-2 S.D.
8.0
144
-12
7.0
131
-20
Source: Bloomberg, KT ZMICO Research
Feb-16
7.7
-2.5SD
Feb-15
-2.0SD
Jan-14
-5
Jan-13
157
Jan-12
8.4
Jan-11
-1.5SD Jan-10
3
5.0
Jan-09
169
Jan-08
182
9.1
Jan-07
9.7
-1.0SD Jan-06
-0.5SD
6.0
Jan-05
7.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investment in the securities of KTB and ZMICO, investor should consider 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 TPBI.
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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th
th
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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.
Company Update
Close Bt167.50
Banking
Earnings upgrade/Earnings downgrade/Overview unchanged
April 7, 2016
1Q16E earnings outlook likely weak on extra expenses for TTV case Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
18.928
20.773
KT ZMICO vs. consensus Share data
‐1.3%
‐2.1%
Reuters / Bloomberg
BBL.BK/BBL TB
Paid‐up Shares (m)
1,908.84
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
320.00/9,074.00
Foreign limit / actual (%)
25.00/30.48
52 week High / Low (Bt)
192.50/142.50
Avg. daily T/O (shares 000)
4,457.00
NVDR (%)
34.09
Estimated free float (%)
97.47
Beta
0.87
URL
www.bangkokbank.com
CGR
Switch to Outperform from Buy We switch our rating for BBL to Outperform from Buy as we see some potential downside risk to its earnings and TP on its latest MLR rate cut. However, we still expect BBL to be most resilient to the macro headwinds given its healthiest balance sheet. Moreover, its cheap valuation (current P/BV at ‐1.75SD, almost near its five‐year historical low band) should post narrower downside risk on its share price. Maintaining financial targets despite the TTV case BBL maintained its key financial targets despite higher risk from the case of granting a letter of guarantee (L/G) of ~Bt1.64bn for the Thai TV (TTV) case. Note that the TTV case is still likely to be prolonged in the court process for a certain period of time. However, BBL has now moved ahead and decided to provide a full provision for the potential loss of such L/G in other expense items in 1Q16E after the bank booked some expenses in 4Q15 even though the L/G is still not classified as NPLs yet. Expect 1Q16E net profit of Bt8.0bn (‐14% YoY, +5% QoQ) The main reasons behind the NP drop YoY should be 1) a higher provision on weaker asset quality; and 2) lower extra gains on both investments and sales of foreclosed assets YoY (totaling Bt1.75bn in 1Q15 vs. our estimate of ~Bt800mn in 1Q16E); and 3) the booking of extra expenses for the TTV case as mentioned earlier (we assumed ~Bt1.1bn in 1Q16E). Meanwhile, the modest NP improvement QoQ should be due to a lower provision and higher NIM QoQ on the benefits of deposit re‐pricing. NPLs should remain higher QoQ reflecting the weak macro front. See potential downside risk to 16E earnings by ~3‐4% on MLR rate cut BBL followed suit with SCB and KBANK by cutting its MLR by 0.25% to 6.25% effective 6 April 2016. We expect the one‐way MLR rate cut (without lowering the deposit rate) to post downside risk to the bank’s 2016E net profit by around 3‐4% and ~4‐5% for 2017E, and possibly to its 2016E target price (TP) by ~2‐3% (or ~Bt4‐5/share). However, as in the normal scenario, we expect banks including BBL to lower deposit rates soon in order to manage NIM. Therefore, we see the net impact to the net profit and 16E TP likely being lower vs. our estimates. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
34,616
35,680
38,345
41,081
46,062
Provision (Btmn)
8,687
14,654
14,129
12,363
12,013
Net Profit (Btmn)
36,332
34,181
35,671
38,828
43,826 22.96
PPOP (Btmn) Anti‐corruption
Level 4 (Certified)
EPS (Bt)
Prapharas Nonthapiboon
19.03
17.91
18.69
20.34
EPS Growth (%)
1%
‐6%
4%
9%
13%
Book value (Bt)
169.47
189.56
196.90
211.37
228.26
Dividend (Bt)
6.50
6.50
6.50
6.71
6.89
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
Analyst, no 17836
PER (X)
8.80
9.35
8.96
8.23
7.30
[email protected]
PBV (X)
0.99
0.88
0.85
0.79
0.73
66 (0) 2695‐5872
Div. Yield (%) ROE (%)
3.88 12%
3.88 10%
3.88 10%
4.01 10%
4.11 10%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 1Q16E earnings forecast Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
1Q15
4Q15
Net Interest Income
14,235
15,617
Non Interest Income
10,813
Operating Income
25,048
Operating Expenses
10,376
Operating Profit-pre tax
11,936
Provision Expenses (Reversal) Tax expenses (Reversal)
1Q16E
% YoY % QoQ
2015
2016E
12%
2%
10,778
9,928
-8%
-8%
45,218
45,947
2%
22%
26,396
25,887
3%
-2%
102,728
105,881
3%
24%
12,132
12,310
19%
1%
45,045
47,150
5%
26%
11,701
11,727
-2%
0%
44,310
47,042
6%
25%
2,980
3,880
3,500
17%
-10%
14,654
14,129
-4%
25%
2,235
2,642
1,975
-12%
-25%
8,630
8,697
1%
23%
NM
NM
NM
24%
Minority Interest
(50)
(60)
(55)
57,510
59,933
% YoY % 1Q to 16E
15,959
(220)
(233)
4%
27%
Net Profit
9,407
7,681
8,047
-14%
5%
34,181
35,671
4%
23%
PPOP-post tax
9,700
9,058
9,752
1%
8%
35,680
38,345
7%
25%
EPS (Bt)
4.93
4.02
4.22
-14%
5%
17.91
18.69
4%
23%
Key Statistics & Ratios
1Q15
4Q15
Gross NPLs (Btmn)
47,473
Gross NPLs/Loans Loan Loss Reserve/NPLs
56,226
1Q16E
2015
58,475
56,226
2016E 65,720
2.20%
2.80%
2.89%
2.80%
3.01%
189.9%
185.3%
183.3%
185.3%
175.0% 16.1%
Tier I to Risk Assets
15.2%
15.8%
N.A.
15.8%
C apital Adequacy Ratio
17.4%
17.9%
N.A.
17.9%
18.2%
Loan to Deposit Ratio
83.8%
89.4%
88.9%
89.4%
91.4%
Loan to Deposit & Borrowing
78.6%
83.8%
83.5%
83.8%
85.9%
Provision to loans
0.67%
0.83%
0.75%
0.78%
0.72%
C ost to Income
41.4%
46.0%
47.6%
43.8%
44.5%
Non Interest Inc./Total Income
43.2%
40.8%
38.4%
44.0%
43.4%
Net Interest Margin (NIM)
2.18%
2.34%
2.36%
2.17%
2.20%
Tax rate (Reversal)
19.1%
25.4%
19.6%
20.1%
20.0%
Loan Growth YoY
1.6%
4.9%
5.9%
4.9%
5.0%
Loan Growth QoQ
-0.4%
3.3%
0.5%
3.3%
Source: KTZMICO Research
Figure 2: BBL’s financial targets for 2016 vs. our forecasts Financial targets Loan growth (%) Net fee income growth
2014
2015E
2015
Actual
Bank's targets
Actual
2%
2‐3%*
4.9%
2016E
2016E
Bank's targets KTZ's forecasts 3‐5%*
5.0%
2%
6‐8%
10.8%
8% (+/‐)
8.4%
Net interest margin (NIMs)
2.32%
2.0‐2.1%
2.17%
2.2% (+/‐)
2.20%
Cost to Income
45.6%
44‐45%
43.8%
~45%
44.5%
NPL/loans
2.1%
2.7‐2.8%
2.80%
3.2‐3.3%
3.01%
Provision (Btbn)
8.7
~12bn
14.7
~12bn
14.1
Provision (bps of loans)
0.49
~66 bps
0.78
~61 bps
0.72
Source: KT ZMICO Research * Core loan growth excluding government spending & M&A loans.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: BBL's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2016E
1.8 +2 S.D.
1.6 1.4
-0.5 S.D.
1.0
-1 S.D. -1.5 S.D.
+2.0SD
1.61
317
93
+1.5SD
1.51
297
81
+1.0SD
1.40
276
69
+0.5SD
1.30
256
56
Average
1.20
236
44
-0.5SD
1.09
216
31
-1.0SD
0.99
195
19
-1.5SD
0.89
175
7
-2.0SD
0.79
155
-6
-2.5SD
0.68
134
-18
-2 S.D.
Feb-16
Feb-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
-2.5S.D.
Jan-05
0.6
to current price (%)
+1 S.D. +0.5 S.D.
1.2
Upside/ Downside
price (Bt)
+1.5 S.D.
Avg.
0.8
PBV (x) Implied market
Source: Bloomberg, KT ZMICO Research
Figure 4: BBL's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 14.0 13.0
2016E
PER (x) Implied market
+2 S.D. +1.5 S.D.
12.0 11.0
Upside/ Downside
price (Bt)
to current price (%)
+1 S.D.
+2.0SD
13.2
246
50
+0.5 S.D.
+1.5SD
12.5
233
42 34
Avg.
10.0
-0.5 S.D.
+1.0SD
11.8
220
9.0
-1 S.D. -1.5 S.D.
+0.5SD
11.1
208
27
Average
10.4
195
19 11
-2 S.D.
8.0
144
-12
7.0
131
-20
Source: Bloomberg, KT ZMICO Research
Feb-16
7.7
-2.5SD
Feb-15
-2.0SD
Jan-14
-5
Jan-13
157
Jan-12
8.4
Jan-11
-1.5SD Jan-10
3
5.0
Jan-09
169
Jan-08
182
9.1
Jan-07
9.7
-1.0SD Jan-06
-0.5SD
6.0
Jan-05
7.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investment in the securities of KTB and ZMICO, investor should consider 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 TPBI.
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
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.
