Banque Pour Le Commerce Exterieur Lao
Banque Pour Le Commerce Exterieur Lao Underperform (16E TP: LAK6,000; US$0.74)
Company Update
Close LAK4,500/US$0.552
Banking May 3, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Profitability outlook remains challenging Price Performance (%)
200% 160% 120% 80% 40%
LSX
Apr-16
Nov-15
May-15
Jul-14
Dec-14
Feb-14
Aug-13
Oct-12
Mar-13
Nov-11
May-12
Jan-11
-40%
Jun-11
0%
BCEL
Source: Bloomberg, KT ZMICO Research
FY16
FY17
Consensus EPS (LAK)
707
952
KT ZMICO vs. consensus Share data
n.a.
Reuters / Bloomberg
n.a.
BCEL.LS / BCEL LS
Closing Price (USD, LAK)
0.554 / 4,500
Paid‐up Shares (m)
136.58
Par (USD, LAK)
0.616 / 5,000
Market cap (LAK bn/ USDmn)
614.60 / 75.76
Foreign limit / actual (%)
10.00 / 9.2061
52 week High / Low (LAK)
6,700 / 4,200
Avg. daily T/O (shares 000)
19.811
Free float (%)
0.7939
Beta (%)
0.14
URL
http://www.bcel.com.la
Note: BCEL‐KT Securities Co., Ltd. is a joint venture company between BCEL Bank and KT ZMICO Securities (Thailand).
Limited capital remains its key share price overhang We maintain an Underperform rating for BCEL. Although its cheap valuation should be the main share price support, we still see no near‐term price catalysts; meanwhile, earnings risk for the bank still stems mainly from ongoing concerns over its limited capital and the efficiency of its asset quality control. However, the main share price catalyst could come from the success of its capital raising plan, with the timeframe still uncertain. 4Q15 NP improved sharply on provision reversal and bad debt recoveries BCEL reported a net profit (NP) of LAK93bn in 4Q15. The improving results were due mainly to much higher extra income QoQ as the bank booked a reversal of provision of LAK105bn together with bad debt recoveries of LAK49bn in 4Q15, mainly from the successful resolution of NPLs for some large clients that turned to good loans in 4Q15. 2015 net profit down 6% YoY BCEL posted a net profit of LAK124bn (‐6% YoY) for 2015, ahead of our forecast of LAK39bn, due largely to higher extra income in 4Q15 as mentioned earlier. Meanwhile, post‐tax core profit (PPOP) for 2015 still dropped 46% YoY. The sharp drop in PPOP and NP was due mainly to 1) much lower NIM (by 62 bps) on weaker asset quality during the year; and 2) a higher cost‐to‐income ratio (56.8% to 59.4%) following the bank’s ongoing business expansion plan. Moreover, the bank incurred a loss from currency margin trading of LAK287bn, but the booking of gain of LAK359bn from the sale of lands helped offset the impact. However, solid net fee income growth of 21% and loan growth of 13% could not offset such negatives. Asset quality for 4Q15 improved QoQ but still needs close monitoring The bank’s NPLs in 4Q15 declined sharply QoQ to 2.62% of loans from 6.45% in 3Q15, mainly from the successful resolution of NPLs for some large clients that turned to good loans in 4Q15 following the bank’s more proactive efforts in the NPL resolution process. Reserve to NPLs improved to 93% from 67% in 2014. However, we still need to keep a watch on the bank’s consistency with respect to the control of asset quality, which was quite volatile in 2015. Its capital adequacy ratio stood at 5.6%, still below the BOL’s minimum requirement of 8%. 2016 financial targets look challenging in our view BCEL highlighted the bank’s main financial targets for 2016E, which include 1) growth in both assets and deposits of 6‐7%; 2) loan growth of 27.5%; and 3) profit before tax growth of 30.7%. We see some of the bank’s targets as quite challenging, especially the loan growth target given its scarce capital and ongoing asset quality risk. Financials and Valuation FY Ended 31 Dec PPP (LAKmn) Net profit (LAKmn) EPS (LAK) EPS growth (%)
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
BVPS (LAK) DPS (LAK) FY Ended 31 Dec PER (X) PBV (X) Div. Yield (%) ROE (%)
2013 213,689 235,571 1,725 12% 7,774 785 2013 2.61 0.58 17.44 23%
2014 247,975 132,610 971 ‐44% 8,184 594 2014 4.63 0.55 13.20 12%
2015 238,826 124,371 911 ‐6% 8,521 392 2015 4.94 0.53 8.71 11%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2016E 199,519 96,614 707 ‐22% 8,458 212 2016E 6.36 0.53 4.72 9%
2017E 246,659 130,034 952 35% 9,224 286 2017E 4.73 0.49 6.35 11%
Figure 1: 4Q15 and 2015 earnings results Income statement (LAKmn) Fiscal Year‐Ended Dec.
4Q14
3Q15
4Q15
% YoY
% QoQ
2014
2015
% YoY
Net Interest Income
44,053
70,931
76,774
74%
8% 314,145
260,640
‐17%
Non Interest Income
89,657
109,459
61,052
‐32%
‐44% 314,521
383,773
22%
Net Fee and commission income
48,088
38,439
48,608
1%
26% 131,279
158,234
21%
Net FX trading gain (loss)
11,910
7,457
11,121
‐7%
49% 54,774 41,002
‐25%
Operating Income
133,710
180,390
137,826
3%
‐24% 628,666
644,413
3%
Operating Expenses
93,816
86,275
129,523
38%
50% 357,168
382,869
7%
Provision expenses (Reversal)
15,553
135,812 (104,895)
‐774%
‐177% 115,365
114,455
‐1%
Tax expenses (Reversal)
5,288
(4,648) 20,287
284%
‐536% 22,805 22,377
‐2%
Net Profit
18,942
(37,199) 93,023
391%
‐350% 132,610
124,371
‐6%
PPOP‐post tax
37,050
(11,305) 48,729
Pre provisioning profits (PPP)
34,495
98,613
EPS (LAK)
139
(272) 681
Key Statistics and Ratios
(11,872)
32%
‐531% 215,011
116,666
‐46%
‐134%
‐112% 247,975
238,826
‐4%
391%
‐350% 971
911
‐6%
2014
2015
4Q14
3Q15
4Q15
297,735
689,006
289,067
Gross NPLs/Loans
3.06%
6.45%
2.62%
3.06%
2.62%
Loan Loss Reserve/NPLs
66.9%
55.1%
93.0%
66.9%
93.0%
Loan Loss Reserve/Loans
2.0%
3.6%
2.4%
2.0%
2.4%
Gross NPLs (LAKmn)
Capital Adequacy Ratio
297,735 289,067
8.0%
4.9%
5.6%
8.0%
5.6%
Loan to Deposit Ratio
50.9%
50.9%
51.7%
50.9%
51.7%
Cost to Income
70.2%
47.8%
94.0%
56.8%
59.4%
Non Interest Income/Total Income
67.1%
60.7%
44.3%
50.0%
59.6%
Provision/loans
0.64%
5.09%
‐3.81%
1.19%
1.04%
Interest Spread
3.20%
4.30%
4.15%
3.88%
3.66%
Net Interest Margin
1.27%
2.01%
2.07%
2.36%
1.74%
Loan Growth YoY
4.8%
12.7%
13.3%
4.8%
13.3%
Loan Growth QoQ
2.7%
11.2%
3.3%
Source: KTZMICO Research
Figure 2: Loans by currency Loans by currency Loans in LAK Loans in USD Loans in THB Total loans
2012 39% 44% 18% 100%
2013 44% 42% 14% 100%
2014 43% 43% 14% 100%
2015 41% 47% 12% 100%
Source: KT ZMICO Research, BCEL
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: Deposits by currency and type Deposits by currency LAK Foreign currency Total
2011 40% 60% 100%
2012 45% 55% 100%
2013 44% 56% 100%
2014 47% 53% 100%
2015 51% 49% 100%
Deposit structure Current Savings Margin and Fixed Other Total
2011 29% 40% 30% 1% 100%
2012 23% 42% 34% 1% 100%
2013 20% 42% 36% 2% 100%
2014 23% 39% 37% 1% 100%
2015 21% 40% 37% 1% 100%
69%
65%
62%
62%
62%
Current and Savings (CASA) Source: KT ZMICO Research, BCEL
Figure 4: BCEL's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels
2016E
(X) 2.3
PBV (x) Implied market
2.1 1.9 1.7 1.5 1.3 1.1 0.9 0.7 0.5
+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.
Avg.
Source: Bloomberg, KT ZMICO Research
Apr-16
Dec-15
Jul-15
Mar-15
Oct-14
Jun-14
Jan-14
Sep-13
Apr-13
Nov-12
Jul-12
Feb-12
Oct-11
May-11
Jan-11
0.3
Upside/ Downside
price (LAK)
to current price (%)
+2.0SD
1.4
12,052
42
+1.5SD
1.3
11,073
31
+1.0SD
1.2
10,094
19
+0.5SD
1.1
9,116
8
Average
1.0
8,137
-4
-0.5SD
0.8
7,158
-15
-1.0SD
0.7
6,179
-27
-1.5SD
0.6
5,201
-39
-2.0SD
0.5
4,222
-50
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, BIGC, BJC. 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
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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 LAK4,500/US$0.552
Banking May 3, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Profitability outlook remains challenging Price Performance (%)
200% 160% 120% 80% 40%
LSX
Apr-16
Nov-15
May-15
Jul-14
Dec-14
Feb-14
Aug-13
Oct-12
Mar-13
Nov-11
May-12
Jan-11
-40%
Jun-11
0%
BCEL
Source: Bloomberg, KT ZMICO Research
FY16
FY17
Consensus EPS (LAK)
707
952
KT ZMICO vs. consensus Share data
n.a.
Reuters / Bloomberg
n.a.
BCEL.LS / BCEL LS
Closing Price (USD, LAK)
0.554 / 4,500
Paid‐up Shares (m)
136.58
Par (USD, LAK)
0.616 / 5,000
Market cap (LAK bn/ USDmn)
614.60 / 75.76
Foreign limit / actual (%)
10.00 / 9.2061
52 week High / Low (LAK)
6,700 / 4,200
Avg. daily T/O (shares 000)
19.811
Free float (%)
0.7939
Beta (%)
0.14
URL
http://www.bcel.com.la
Note: BCEL‐KT Securities Co., Ltd. is a joint venture company between BCEL Bank and KT ZMICO Securities (Thailand).
Limited capital remains its key share price overhang We maintain an Underperform rating for BCEL. Although its cheap valuation should be the main share price support, we still see no near‐term price catalysts; meanwhile, earnings risk for the bank still stems mainly from ongoing concerns over its limited capital and the efficiency of its asset quality control. However, the main share price catalyst could come from the success of its capital raising plan, with the timeframe still uncertain. 4Q15 NP improved sharply on provision reversal and bad debt recoveries BCEL reported a net profit (NP) of LAK93bn in 4Q15. The improving results were due mainly to much higher extra income QoQ as the bank booked a reversal of provision of LAK105bn together with bad debt recoveries of LAK49bn in 4Q15, mainly from the successful resolution of NPLs for some large clients that turned to good loans in 4Q15. 2015 net profit down 6% YoY BCEL posted a net profit of LAK124bn (‐6% YoY) for 2015, ahead of our forecast of LAK39bn, due largely to higher extra income in 4Q15 as mentioned earlier. Meanwhile, post‐tax core profit (PPOP) for 2015 still dropped 46% YoY. The sharp drop in PPOP and NP was due mainly to 1) much lower NIM (by 62 bps) on weaker asset quality during the year; and 2) a higher cost‐to‐income ratio (56.8% to 59.4%) following the bank’s ongoing business expansion plan. Moreover, the bank incurred a loss from currency margin trading of LAK287bn, but the booking of gain of LAK359bn from the sale of lands helped offset the impact. However, solid net fee income growth of 21% and loan growth of 13% could not offset such negatives. Asset quality for 4Q15 improved QoQ but still needs close monitoring The bank’s NPLs in 4Q15 declined sharply QoQ to 2.62% of loans from 6.45% in 3Q15, mainly from the successful resolution of NPLs for some large clients that turned to good loans in 4Q15 following the bank’s more proactive efforts in the NPL resolution process. Reserve to NPLs improved to 93% from 67% in 2014. However, we still need to keep a watch on the bank’s consistency with respect to the control of asset quality, which was quite volatile in 2015. Its capital adequacy ratio stood at 5.6%, still below the BOL’s minimum requirement of 8%. 2016 financial targets look challenging in our view BCEL highlighted the bank’s main financial targets for 2016E, which include 1) growth in both assets and deposits of 6‐7%; 2) loan growth of 27.5%; and 3) profit before tax growth of 30.7%. We see some of the bank’s targets as quite challenging, especially the loan growth target given its scarce capital and ongoing asset quality risk. Financials and Valuation FY Ended 31 Dec PPP (LAKmn) Net profit (LAKmn) EPS (LAK) EPS growth (%)
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
BVPS (LAK) DPS (LAK) FY Ended 31 Dec PER (X) PBV (X) Div. Yield (%) ROE (%)
2013 213,689 235,571 1,725 12% 7,774 785 2013 2.61 0.58 17.44 23%
2014 247,975 132,610 971 ‐44% 8,184 594 2014 4.63 0.55 13.20 12%
2015 238,826 124,371 911 ‐6% 8,521 392 2015 4.94 0.53 8.71 11%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2016E 199,519 96,614 707 ‐22% 8,458 212 2016E 6.36 0.53 4.72 9%
2017E 246,659 130,034 952 35% 9,224 286 2017E 4.73 0.49 6.35 11%
Figure 1: 4Q15 and 2015 earnings results Income statement (LAKmn) Fiscal Year‐Ended Dec.
4Q14
3Q15
4Q15
% YoY
% QoQ
2014
2015
% YoY
Net Interest Income
44,053
70,931
76,774
74%
8% 314,145
260,640
‐17%
Non Interest Income
89,657
109,459
61,052
‐32%
‐44% 314,521
383,773
22%
Net Fee and commission income
48,088
38,439
48,608
1%
26% 131,279
158,234
21%
Net FX trading gain (loss)
11,910
7,457
11,121
‐7%
49% 54,774 41,002
‐25%
Operating Income
133,710
180,390
137,826
3%
‐24% 628,666
644,413
3%
Operating Expenses
93,816
86,275
129,523
38%
50% 357,168
382,869
7%
Provision expenses (Reversal)
15,553
135,812 (104,895)
‐774%
‐177% 115,365
114,455
‐1%
Tax expenses (Reversal)
5,288
(4,648) 20,287
284%
‐536% 22,805 22,377
‐2%
Net Profit
18,942
(37,199) 93,023
391%
‐350% 132,610
124,371
‐6%
PPOP‐post tax
37,050
(11,305) 48,729
Pre provisioning profits (PPP)
34,495
98,613
EPS (LAK)
139
(272) 681
Key Statistics and Ratios
(11,872)
32%
‐531% 215,011
116,666
‐46%
‐134%
‐112% 247,975
238,826
‐4%
391%
‐350% 971
911
‐6%
2014
2015
4Q14
3Q15
4Q15
297,735
689,006
289,067
Gross NPLs/Loans
3.06%
6.45%
2.62%
3.06%
2.62%
Loan Loss Reserve/NPLs
66.9%
55.1%
93.0%
66.9%
93.0%
Loan Loss Reserve/Loans
2.0%
3.6%
2.4%
2.0%
2.4%
Gross NPLs (LAKmn)
Capital Adequacy Ratio
297,735 289,067
8.0%
4.9%
5.6%
8.0%
5.6%
Loan to Deposit Ratio
50.9%
50.9%
51.7%
50.9%
51.7%
Cost to Income
70.2%
47.8%
94.0%
56.8%
59.4%
Non Interest Income/Total Income
67.1%
60.7%
44.3%
50.0%
59.6%
Provision/loans
0.64%
5.09%
‐3.81%
1.19%
1.04%
Interest Spread
3.20%
4.30%
4.15%
3.88%
3.66%
Net Interest Margin
1.27%
2.01%
2.07%
2.36%
1.74%
Loan Growth YoY
4.8%
12.7%
13.3%
4.8%
13.3%
Loan Growth QoQ
2.7%
11.2%
3.3%
Source: KTZMICO Research
Figure 2: Loans by currency Loans by currency Loans in LAK Loans in USD Loans in THB Total loans
2012 39% 44% 18% 100%
2013 44% 42% 14% 100%
2014 43% 43% 14% 100%
2015 41% 47% 12% 100%
Source: KT ZMICO Research, BCEL
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: Deposits by currency and type Deposits by currency LAK Foreign currency Total
2011 40% 60% 100%
2012 45% 55% 100%
2013 44% 56% 100%
2014 47% 53% 100%
2015 51% 49% 100%
Deposit structure Current Savings Margin and Fixed Other Total
2011 29% 40% 30% 1% 100%
2012 23% 42% 34% 1% 100%
2013 20% 42% 36% 2% 100%
2014 23% 39% 37% 1% 100%
2015 21% 40% 37% 1% 100%
69%
65%
62%
62%
62%
Current and Savings (CASA) Source: KT ZMICO Research, BCEL
Figure 4: BCEL's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels
2016E
(X) 2.3
PBV (x) Implied market
2.1 1.9 1.7 1.5 1.3 1.1 0.9 0.7 0.5
+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.
Avg.
Source: Bloomberg, KT ZMICO Research
Apr-16
Dec-15
Jul-15
Mar-15
Oct-14
Jun-14
Jan-14
Sep-13
Apr-13
Nov-12
Jul-12
Feb-12
Oct-11
May-11
Jan-11
0.3
Upside/ Downside
price (LAK)
to current price (%)
+2.0SD
1.4
12,052
42
+1.5SD
1.3
11,073
31
+1.0SD
1.2
10,094
19
+0.5SD
1.1
9,116
8
Average
1.0
8,137
-4
-0.5SD
0.8
7,158
-15
-1.0SD
0.7
6,179
-27
-1.5SD
0.6
5,201
-39
-2.0SD
0.5
4,222
-50
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, BIGC, BJC. 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.
