KASIKORNBANK
KASIKORNBANK Underperform (16E TP Bt165.00)
Earnings Review
Close Bt182.00
Banking July 22, 2016
Beat forecast/Below forecast/In line
2Q16 net profit in line Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
16.197
19.157
KT ZMICO vs. consensus
‐2.8%
‐4.7%
Share data
Reuters / Bloomberg
KBANK.BK/KBANK TB
Paid‐up Shares (m)
2,393.26
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
436.00/12,441.00
Foreign limit / actual (%)
48.98/48.97
52 week High / Low (Bt)
190.50/144.00
Avg. daily T/O (shares 000)
8,290.00
NVDR (%)
23.63
Estimated free float (%)
66.02
Beta
1.30
URL
www.kasikornbank.com
CGR
Level 4 (Certified)
Anti‐corruption
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
Recent price run‐up could leave narrower room for further upside We maintain our Underperform rating as the recent price rally (+2% in 1 week and +11% in 1 month) could limit further upside potential, leaving no upside vs. our 16E TP and little upside potential vs. our tentative 17E TP estimate of Bt185‐190/share (+/‐). Moreover, we still expect large banks’ earnings (including KBANK) from 2017E onwards to see some downside risk from the National e‐Payment program even though we expect a gradual migration rate in the first stage. 2Q16 results in line with both our forecast and the street KBANK’s 2Q16 net profit (NP) of Bt9.4bn (‐18% YoY, ‐2% QoQ) was quite in line with our forecast (Bt9.8bn) and the consensus estimate (Bt9.7bn). 2Q16 net profit stood at Bt9.4bn (‐18% YoY, ‐2% QoQ) The main reason behind the NP drop, especially YoY, was a much higher provision YoY (210 bps in 2Q16 vs. 154 bps in 2Q15 and the bank’s whole year target of up to 190 bps). This was in line with the bank’s indication that for 2016 it would set a much higher provision in 1H16 vs. 2H16 to act as a buffer for economic uncertainty. Moreover, weaker non‐interest income, especially in regard to lower‐than‐expected gain on trading and FX transactions and net fee income, was another factor behind the NP drop. NIM contracted QoQ as expected on the rate cut impact and weakened asset quality. Meanwhile, loans grew 6.2% YoY and 3.1% YTD (quite in line with the bank’s target of 6‐7% for 2016E, thanks to loans to BJC in 2Q16). Asset quality still weakened QoQ in line with the bank’s estimate NPLs for 2Q16 still increased QoQ to 2.89% of loans from 2.81%, in line with the bank’s estimate that its NPL ratio could increase to around 3.5‐3.6% at end‐16. However, it also set a higher provision to cope with the higher NPL risk. This resulted in higher ratios for both the reserve to NPLs and to the BoT’s required reserve QoQ to 136% and 218%, which were more solid vs. direct large peers. Financials and Valuation FY Ended 31 Dec Provision (Btm) Net profit (Btm) EPS (Bt) EPS growth (%) Book value (Bt) Dividend (Bt) FY Ended 31 Dec PER (X) PBV (X) Dividend yield (%) ROE (%)
2014 14,243 46,153 19.28 12% 107.41 4.00 2014 9.44 1.69 2.20 19%
2015 26,377 39,474 16.49 ‐14% 119.42 4.00 2015 11.03 1.52 2.20 15%
2016E 32,903 37,681 15.74 ‐5% 131.16 4.00 2016E 11.56 1.39 2.20 13%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 30,389 43,701 18.26 16% 145.42 4.50 2017E 9.97 1.25 2.47 13%
2018E 26,764 51,733 21.62 18% 162.54 5.00 2018E 8.42 1.12 2.75 14%
Figure 1: 2Q16 earnings results
Statement of comprehensive income (Btmn) 2Q15
1Q16
Net Interest Income
Fiscal Year‐Ended Dec.
21,119
22,200
Non Interest Income
16,637
Operating Income
37,756
2Q16 % YoY % QoQ
1H15
1H16 % YoY
22,123
5%
0% 42,094
44,323
17,552
15,547
‐7%
‐11% 31,922
33,099
39,751
37,670
0%
‐5% 74,015
77,422
2015
5% 85,012
2016E % YoY % 1HE to 16E 85,669
1%
52%
4% 62,503
68,571
10%
48%
5% 147,515
154,240
5%
50%
Operating Expenses
15,947
14,793
15,647
‐2%
6% 31,364
30,440
‐3% 66,656
68,387
3%
45%
Operating Profit
21,642
24,032
21,876
1%
‐9% 42,197
45,909
9% 80,859
85,853
6%
53%
Provision Expenses (Reversal)
6,037
11,293
8,721
44%
‐23% 10,044
20,014
99% 26,377
32,903
25%
61%
Tax Expenses
2,924
2,717
2,440
‐17%
‐10% 6,245
5,156
‐17% 10,527
10,590
1%
49%
Net Profit
11,479
9,646
9,427
‐18%
‐2% 23,880
19,074
‐20% 39,474
37,681
‐5%
51%
PPOP‐after tax
18,718
21,316
19,437
4%
‐9% 35,953
40,752
13% 71,867
73,587
2%
55%
EPS (Bt)
4.80
4.03
3.94
‐18%
‐2% 9.98
7.97
‐20% 16.49
15.74
‐5%
51%
Key Statistics & Ratios Gross NPLs (Btmn)
2Q15
1Q16
2Q16
1H15
1H16
2015
40,841
52,927
56,736
40,841
56,736
49,490
2.89%
2.39%
Gross NPLs/Loans Loan loss reserve/NPLs
2.39%
138.1% 135.1% 136.2%
138.1%
LLR/BoT required reserve
181.0% 210.5% 218.0%
181.0% 13.8%
14.7%
Tier I/Risk Assets
13.8%
2.81%
14.9%
14.7%
2.89%
2016E 69,921
2.70%
3.65%
136.2%
130.0%
124.0%
218.0%
192.5%
N.A.
14.5%
15.8%
Capital Adequacy Ratio
17.4%
18.4%
18.1%
17.4%
18.1%
18.0%
18.2%
Loan to Deposit Ratio
93.9%
92.3%
95.5%
93.9%
95.5%
94.4%
96.5%
Loan to Deposit & borrowing
89.4%
87.8%
91.3%
89.4%
91.3%
89.9%
91.7%
Provision to loans
1.54%
2.80%
2.10%
1.28%
2.41%
1.64%
1.95% 44.3%
Cost to Income
42.2%
37.2%
41.5%
42.4%
39.3%
45.2%
Non Interest Income/Total Income
44.1%
44.2%
41.3%
43.1%
42.8%
42.4%
44.5%
Net Interest Margin
3.60%
3.63%
3.49%
3.67%
3.57%
3.55%
3.46%
Tax rate
18.5%
19.9%
18.3%
19.2%
19.1%
19.3%
20.0%
Loan Growth YoY
6.4%
4.2%
6.2%
6.4%
6.2%
5.4%
4.8%
Loan Growth QoQ
1.2%
0.2%
3.1%
1.2%
3.1%
Source: KTZMICO Research
Figure 2: KBANK's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 3.0 2.5 2.0 1.5
2016E +2 S.D. +1 .5 S.D. +1 S.D.
-1 S.D. -1.5 S.D. -2 S.D.
+0.5S.D. Avg. -0.5 S.D.
1.0
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
0.5
PBV (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
2.4
315
68
+1.5SD
2.2
294
57
+1.0SD
2.1
272
45
+0.5SD
1.9
251
34
Average
1.7
229
22
-0.5SD
1.6
208
11
-1.0SD
1.4
186
-1
-1.5SD
1.3
165
-12
-2.0SD
1.1
143
-24
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: KBANK's PER band and sensitivity of market prices based on PER at different standard deviation levels 2016E
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
-1 S.D.
Jan-07
Jan-06
Jan-05
(X) 17 16 +2 S.D. 15 14 +1 S.D. 13 12 Avg. 11 10 9 -2 S.D. 8 7 6 5
PER (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
14.5
228
21
+1.5SD
13.6
215
15
+1.0SD
12.8
202
8
+0.5SD
12.0
189
1
Average
11.2
176
-6
-0.5SD
10.4
163
-13
-1.0SD
9.5
150
-20
-1.5SD
8.7
137
-27
-2.0SD
7.9
125
-34
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, PLE, TPOLY, M‐CHAI. KT ZMICO is a co‐underwriter of ALT, EKH.
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.
Earnings Review
Close Bt182.00
Banking July 22, 2016
Beat forecast/Below forecast/In line
2Q16 net profit in line Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
16.197
19.157
KT ZMICO vs. consensus
‐2.8%
‐4.7%
Share data
Reuters / Bloomberg
KBANK.BK/KBANK TB
Paid‐up Shares (m)
2,393.26
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
436.00/12,441.00
Foreign limit / actual (%)
48.98/48.97
52 week High / Low (Bt)
190.50/144.00
Avg. daily T/O (shares 000)
8,290.00
NVDR (%)
23.63
Estimated free float (%)
66.02
Beta
1.30
URL
www.kasikornbank.com
CGR
Level 4 (Certified)
Anti‐corruption
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
Recent price run‐up could leave narrower room for further upside We maintain our Underperform rating as the recent price rally (+2% in 1 week and +11% in 1 month) could limit further upside potential, leaving no upside vs. our 16E TP and little upside potential vs. our tentative 17E TP estimate of Bt185‐190/share (+/‐). Moreover, we still expect large banks’ earnings (including KBANK) from 2017E onwards to see some downside risk from the National e‐Payment program even though we expect a gradual migration rate in the first stage. 2Q16 results in line with both our forecast and the street KBANK’s 2Q16 net profit (NP) of Bt9.4bn (‐18% YoY, ‐2% QoQ) was quite in line with our forecast (Bt9.8bn) and the consensus estimate (Bt9.7bn). 2Q16 net profit stood at Bt9.4bn (‐18% YoY, ‐2% QoQ) The main reason behind the NP drop, especially YoY, was a much higher provision YoY (210 bps in 2Q16 vs. 154 bps in 2Q15 and the bank’s whole year target of up to 190 bps). This was in line with the bank’s indication that for 2016 it would set a much higher provision in 1H16 vs. 2H16 to act as a buffer for economic uncertainty. Moreover, weaker non‐interest income, especially in regard to lower‐than‐expected gain on trading and FX transactions and net fee income, was another factor behind the NP drop. NIM contracted QoQ as expected on the rate cut impact and weakened asset quality. Meanwhile, loans grew 6.2% YoY and 3.1% YTD (quite in line with the bank’s target of 6‐7% for 2016E, thanks to loans to BJC in 2Q16). Asset quality still weakened QoQ in line with the bank’s estimate NPLs for 2Q16 still increased QoQ to 2.89% of loans from 2.81%, in line with the bank’s estimate that its NPL ratio could increase to around 3.5‐3.6% at end‐16. However, it also set a higher provision to cope with the higher NPL risk. This resulted in higher ratios for both the reserve to NPLs and to the BoT’s required reserve QoQ to 136% and 218%, which were more solid vs. direct large peers. Financials and Valuation FY Ended 31 Dec Provision (Btm) Net profit (Btm) EPS (Bt) EPS growth (%) Book value (Bt) Dividend (Bt) FY Ended 31 Dec PER (X) PBV (X) Dividend yield (%) ROE (%)
2014 14,243 46,153 19.28 12% 107.41 4.00 2014 9.44 1.69 2.20 19%
2015 26,377 39,474 16.49 ‐14% 119.42 4.00 2015 11.03 1.52 2.20 15%
2016E 32,903 37,681 15.74 ‐5% 131.16 4.00 2016E 11.56 1.39 2.20 13%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 30,389 43,701 18.26 16% 145.42 4.50 2017E 9.97 1.25 2.47 13%
2018E 26,764 51,733 21.62 18% 162.54 5.00 2018E 8.42 1.12 2.75 14%
Figure 1: 2Q16 earnings results
Statement of comprehensive income (Btmn) 2Q15
1Q16
Net Interest Income
Fiscal Year‐Ended Dec.
21,119
22,200
Non Interest Income
16,637
Operating Income
37,756
2Q16 % YoY % QoQ
1H15
1H16 % YoY
22,123
5%
0% 42,094
44,323
17,552
15,547
‐7%
‐11% 31,922
33,099
39,751
37,670
0%
‐5% 74,015
77,422
2015
5% 85,012
2016E % YoY % 1HE to 16E 85,669
1%
52%
4% 62,503
68,571
10%
48%
5% 147,515
154,240
5%
50%
Operating Expenses
15,947
14,793
15,647
‐2%
6% 31,364
30,440
‐3% 66,656
68,387
3%
45%
Operating Profit
21,642
24,032
21,876
1%
‐9% 42,197
45,909
9% 80,859
85,853
6%
53%
Provision Expenses (Reversal)
6,037
11,293
8,721
44%
‐23% 10,044
20,014
99% 26,377
32,903
25%
61%
Tax Expenses
2,924
2,717
2,440
‐17%
‐10% 6,245
5,156
‐17% 10,527
10,590
1%
49%
Net Profit
11,479
9,646
9,427
‐18%
‐2% 23,880
19,074
‐20% 39,474
37,681
‐5%
51%
PPOP‐after tax
18,718
21,316
19,437
4%
‐9% 35,953
40,752
13% 71,867
73,587
2%
55%
EPS (Bt)
4.80
4.03
3.94
‐18%
‐2% 9.98
7.97
‐20% 16.49
15.74
‐5%
51%
Key Statistics & Ratios Gross NPLs (Btmn)
2Q15
1Q16
2Q16
1H15
1H16
2015
40,841
52,927
56,736
40,841
56,736
49,490
2.89%
2.39%
Gross NPLs/Loans Loan loss reserve/NPLs
2.39%
138.1% 135.1% 136.2%
138.1%
LLR/BoT required reserve
181.0% 210.5% 218.0%
181.0% 13.8%
14.7%
Tier I/Risk Assets
13.8%
2.81%
14.9%
14.7%
2.89%
2016E 69,921
2.70%
3.65%
136.2%
130.0%
124.0%
218.0%
192.5%
N.A.
14.5%
15.8%
Capital Adequacy Ratio
17.4%
18.4%
18.1%
17.4%
18.1%
18.0%
18.2%
Loan to Deposit Ratio
93.9%
92.3%
95.5%
93.9%
95.5%
94.4%
96.5%
Loan to Deposit & borrowing
89.4%
87.8%
91.3%
89.4%
91.3%
89.9%
91.7%
Provision to loans
1.54%
2.80%
2.10%
1.28%
2.41%
1.64%
1.95% 44.3%
Cost to Income
42.2%
37.2%
41.5%
42.4%
39.3%
45.2%
Non Interest Income/Total Income
44.1%
44.2%
41.3%
43.1%
42.8%
42.4%
44.5%
Net Interest Margin
3.60%
3.63%
3.49%
3.67%
3.57%
3.55%
3.46%
Tax rate
18.5%
19.9%
18.3%
19.2%
19.1%
19.3%
20.0%
Loan Growth YoY
6.4%
4.2%
6.2%
6.4%
6.2%
5.4%
4.8%
Loan Growth QoQ
1.2%
0.2%
3.1%
1.2%
3.1%
Source: KTZMICO Research
Figure 2: KBANK's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 3.0 2.5 2.0 1.5
2016E +2 S.D. +1 .5 S.D. +1 S.D.
-1 S.D. -1.5 S.D. -2 S.D.
+0.5S.D. Avg. -0.5 S.D.
1.0
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
0.5
PBV (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
2.4
315
68
+1.5SD
2.2
294
57
+1.0SD
2.1
272
45
+0.5SD
1.9
251
34
Average
1.7
229
22
-0.5SD
1.6
208
11
-1.0SD
1.4
186
-1
-1.5SD
1.3
165
-12
-2.0SD
1.1
143
-24
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: KBANK's PER band and sensitivity of market prices based on PER at different standard deviation levels 2016E
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
-1 S.D.
Jan-07
Jan-06
Jan-05
(X) 17 16 +2 S.D. 15 14 +1 S.D. 13 12 Avg. 11 10 9 -2 S.D. 8 7 6 5
PER (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
14.5
228
21
+1.5SD
13.6
215
15
+1.0SD
12.8
202
8
+0.5SD
12.0
189
1
Average
11.2
176
-6
-0.5SD
10.4
163
-13
-1.0SD
9.5
150
-20
-1.5SD
8.7
137
-27
-2.0SD
7.9
125
-34
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, PLE, TPOLY, M‐CHAI. KT ZMICO is a co‐underwriter of ALT, EKH.
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.
