Earnings Review - Global Alliance Partners
Earnings Review April 21, 2014
Bangkok Bank
Buy (TP Bt220.00)
1Q14 net profit contained no surprise
Price Bt190.00
We maintain a BUY and the 14E target price of Bt220/share for an implied target P/BV of 1.3x. BBL remains one of our top picks due to having the healthiest balance sheet in the sector and its advantages over peers in its overseas-linked business, which should provide a better cushion for the bank vs. peers against the current domestic macro and political headwinds. Moreover, BBL’s inexpensive 14E P/BV of 1.16x vs. the sector average of 1.4x is another appeal. Facts and Figures 1Q14 NP in line with both our estimate and the street: BBL’s 1Q14 net profit (NP) of Bt8.97bn (-1% YoY, +17% QoQ) was quite in line with both our forecast and the street estimate of Bt8.6-8.8bn. Meanwhile, core profit after tax (PPOP) still grew well 14% YoY and 19% QoQ.
Stock Performance (%)
Analysis
Share data
1Q14 NP down 1% YoY but PPOP up 14% YoY: The drop in NP YoY was due mainly to 1) lower NIM (by 16 bps YoY) on the rate cut impact; and 2) lower extra income as the bank booked huge gain on investment of Bt1.1bn in 1Q13 vs. Bt484mn in 1Q14. Meanwhile, PPOP continued to grow well by 14% YoY on solid loan growth of 10% YoY and efficient cost control.
Reuters / Bloomberg
NP and PPOP grew 14-19% QoQ, respectively: This was due largely to seasonally lower operating expenses QoQ. Moreover, the bright spot for the quarter was income related to the global recovery, i.e., income from foreign exchange (FX) transactions, which continued to improve solidly by 17% QoQ in 1Q14 vs. +9% QoQ in 4Q13. Meanwhile, loans, net fee income and NIM were quite flat QoQ.
Foreign limit / actual (%)
Continued better signal from global-linked business QoQ: We expect BBL to continue gaining higher benefits vs. peers from the global recovery thanks to its largest overseas exposure vs. peers, i.e., ~16% of overseas lending vs. direct peers of
Bangkok Bank
Buy (TP Bt220.00)
1Q14 net profit contained no surprise
Price Bt190.00
We maintain a BUY and the 14E target price of Bt220/share for an implied target P/BV of 1.3x. BBL remains one of our top picks due to having the healthiest balance sheet in the sector and its advantages over peers in its overseas-linked business, which should provide a better cushion for the bank vs. peers against the current domestic macro and political headwinds. Moreover, BBL’s inexpensive 14E P/BV of 1.16x vs. the sector average of 1.4x is another appeal. Facts and Figures 1Q14 NP in line with both our estimate and the street: BBL’s 1Q14 net profit (NP) of Bt8.97bn (-1% YoY, +17% QoQ) was quite in line with both our forecast and the street estimate of Bt8.6-8.8bn. Meanwhile, core profit after tax (PPOP) still grew well 14% YoY and 19% QoQ.
Stock Performance (%)
Analysis
Share data
1Q14 NP down 1% YoY but PPOP up 14% YoY: The drop in NP YoY was due mainly to 1) lower NIM (by 16 bps YoY) on the rate cut impact; and 2) lower extra income as the bank booked huge gain on investment of Bt1.1bn in 1Q13 vs. Bt484mn in 1Q14. Meanwhile, PPOP continued to grow well by 14% YoY on solid loan growth of 10% YoY and efficient cost control.
Reuters / Bloomberg
NP and PPOP grew 14-19% QoQ, respectively: This was due largely to seasonally lower operating expenses QoQ. Moreover, the bright spot for the quarter was income related to the global recovery, i.e., income from foreign exchange (FX) transactions, which continued to improve solidly by 17% QoQ in 1Q14 vs. +9% QoQ in 4Q13. Meanwhile, loans, net fee income and NIM were quite flat QoQ.
Foreign limit / actual (%)
Continued better signal from global-linked business QoQ: We expect BBL to continue gaining higher benefits vs. peers from the global recovery thanks to its largest overseas exposure vs. peers, i.e., ~16% of overseas lending vs. direct peers of
