Muangthai Leasing Outperform
Muangthai Leasing Earnings Review
Outperform (17E TP Bt38.00) Close Bt35.25
Finance & Securities August 9, 2017
Beat forecast/Below forecast/In line
Results in line Results date: August 8, 2017 Price Performance (%)
Continuing growth momentum We maintain our Outperform rating for MTLS as we see that it remains appealing on its favorable earnings growth prospects, which should continue outperforming financial peers, thanks in part to the promising industry outlook. 2Q17 net profit in line with both our forecast and the street MTLS’s 2Q17 net profit of Bt571mn (+90% YoY, +7% QoQ) was in line with both our forecast (Bt582mn) and the street estimate (Bt573mn). 2Q17 net profit came in at Bt571mn, up 90% YoY and 7% QoQ The upbeat results were due mainly to 1) robust loan growth of 70% YoY and 13% QoQ, with the primary loan growth driver coming from its new products (cars and agricultural land products); and 2) non‐interest income growth of 76% YoY and 12% QoQ. This should also be thanks largely to its ongoing aggressive branch expansion to 2,046 branches at end‐2Q17 from 1,874 branches at end‐1Q17 vs. 1,664 branches at end‐ 16, with 172 and 382 new branches opened in 2Q17 and 1H17, respectively, vs. the firm’s plan to expand by around 600 new branches for 2017E. Meanwhile, the interest spread was quite stable QoQ at 20%. Provision expenses for 2Q17 continued to rise to 2.7% of loans vs. 2.24% in 1Q17 and 1.4% in 2016, due partly to its robust credit growth and weakened asset quality.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.071
1.469
KT ZMICO vs. consensus Share data
5.5%
8.2%
Reuters / Bloomberg
MTLS.BK/MTLS TB
Paid‐up Shares (m)
2,120.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
75.00/2,248.00
Foreign limit / actual (%)
49.00/6.24
52 week High / Low (Bt)
36.50/14.00
Avg. daily T/O (shares 000) NVDR (%)
11,776.00 3.47
Estimated free float (%)
31.68
Beta
1.57
URL
www.muangthaileasing.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Prapharas Nonthapiboon Analyst, no 17836 [email protected]
NPLs still increased both YoY and QoQ following its rapid credit growth Its NPLs in 2Q17 increased slightly QoQ to 1.18% from 1.09% in 1Q17 and 1.07% in 4Q16 following its rapid credit expansion. The increase in NPLs came mainly from NPLs in car title loans. The management still expects to control its NPL ratio for 2017E below 1.5%. However, its reserve‐to‐ NPL ratio for 2Q17 remained quite solid at 267% vs. 265% in 1Q17 and 257% in 4Q16. 1H17 net profit came in at Bt1.1bn (+91% YoY) With 1H17 net profit of Bt1.1bn representing 46% of our FY17 NP forecast, we keep our earnings forecast unchanged. Financials and Valuation FY Ended 31 Dec PPOP (Btm) Net profit (Btmn) EPS (Bt) EPS growth (%) BV (Bt) Dividend (Bt) FY Ended 31 Dec PER (x) PBV (x) Dividend yield (%) ROE (%)
2015 856 825 0.39 52% 2.67 0.20
2016 1,811 1,464 0.69 77% 3.16 0.10
2017E 3,214 2,397 1.13 64% 4.19 0.17
2018E 4,692 3,372 1.59 41% 5.61 0.24
2019E 6,331 4,424 2.09 31% 7.46 0.31
2015 90.58 13.22 0.57 15%
2016 51.04 11.17 0.28 24%
2017E 31.18 8.42 0.48 31%
2018E 22.16 6.29 0.68 32%
2019E 16.89 4.73 0.89 32%
66 (0) 2695‐5872
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q17 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
2Q16
1Q17
2Q17
% YoY % QoQ
1H16
1H17 % YoY
2016 2017E % YoY % 1H to 17E
Interest Income
897
1,415
1,600
78%
13% 1,667
3,015
81% 4,019
6,850
70%
44%
Interest Expenses
72
122
149
108%
22% 138
271
96% 328
660
101%
41%
Net Interest Income
826
1,293
1,451
76%
12% 1,529
2,744
79% 3,691
6,190
68%
44%
Non Interest Income
106
148
165
56%
12% 202
314
55% 453
671
48%
47%
Operating Income
931
1,441
1,616
74%
12% 1,731
3,057
77% 4,144
6,861
66%
45%
Operating Expenses
457
622
705
55%
13% 847
1,327
57% 1,985
3,038
53%
44%
Operating Profit
475
819
911
92%
11% 884
1,730
96% 2,159
3,823
77%
45%
Provision expenses (Reversal)
106
146
198
87%
36% 163
343
110% 332
778
134%
44%
131
137
106%
4% 136
268
97% 348
609
75%
44%
113%
‐9% (5) (11) 152% (15) (39) 158%
Taxes
66
Gain(loss) from foreclosed assets
(3) (6) (5)
Net Profit PPOP EPS (Bt)
300 409 0.14
536 688 0.25
571 774 0.27
2Q16
1Q17
Key Statistics and Ratios
90% 90% 90%
7% 580 13% 748 7% 0.27
1,107 1,462 0.52
2Q17
1H16
1H17
346
91% 1,464 95% 1,811 91% 0.69
2,397 3,214 1.13
Gross NPLs (Btmn)
162
284
162
346
251
0.94%
1.09%
1.18%
0.94%
1.18%
1.07% 1.33%
Loan Loss Reserve/NPLs
302%
265%
267%
302%
267%
257%
252%
Loan Loss Reserve/Loans
2.8%
2.9%
3.1%
2.8%
3.1%
2.7%
3.3%
Equity/Asset Loan to borrowing ratio
32.3%
27.0%
25.3%
32.3%
25.3%
145%
140%
Debt to equity ratio
2.1
2.7
Cost to Income
49.0%
43.2%
Non Interest Income/Total Income
11.4%
10.3%
Interest Spread
19.9%
20.1%
134%
46% 46% 46%
2016 2017E
Gross NPLs/Loans
492
27.4% 23.5%
145%
134%
139%
2.1
3.0
2.6
43.6%
48.9%
43.4%
47.9% 44.3%
10.2%
11.7%
10.3%
10.9%
20.2%
19.4%
20.0%
19.5% 19.7%
3.0
29%
64% 77% 64%
133% 3.2 9.8%
Net Interest Margin
20.8%
20.9%
21.0%
20.4%
20.7%
20.4% 20.4%
Loan Growth YoY
84.5%
79.6%
69.9%
84.5%
69.9%
86.4% 57.3%
Loan Growth QoQ
19.3%
10.3%
12.8%
19.3%
12.8%
Source: KTZMICO Research
Figure 2: MTLS's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 10.0
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
41
17
9.4
39
12
+2.5SD
8.9
37
7
+2.0SD
8.5
36
2
+1.5SD
8.1
34
-4
+1.0SD
7.6
32
-9
+0.5SD
7.2
30
-14
Average
6.8
28
-19
-0.5SD
6.3
26
-24
-1.0SD
5.9
25
-30
-1.5SD
5.5
23
-35
-2.0SD
5.0
21
-40
2017E
PBV (x)
+3.5SD
9.8
+3.0SD
+3.0 S.D.
9.0 8.0
+2.0 S.D. +1.0 S.D.
7.0 6.0 5.0
Avg. -1.0 S.D. -2.0 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-17
May-17
Jan-17
Mar-17
Sep-16
Nov-16
Jul-16
May-16
Jan-16
Mar-16
Nov-15
Jul-15
Sep-15
May-15
Jan-15
Mar-15
Nov-14
4.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: MTLS's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 60.0
+2.0 S.D.
55.0
Upside/ Downside vs. market price
(Bt)
(%)
63
78
50.6
57
62
+1.0SD
45.8
52
47
+0.5SD Average -0.5SD -1.0SD -1.5SD -2.0SD
40.9 36.1 31.2 26.4 21.5 16.7
46 41 35 30 24 19
31 16 0 -15 -31 -47
PER (x)
+2.0SD
55.5
+1.5SD
+1.5 S.D.
50.0
+1.0 S.D.
45.0 40.0
Avg.
35.0
-0.5 S.D.
30.0
-1.0 S.D.
25.0
Source: Bloomberg, KT ZMICO Research
Jul-17
May-17
Jan-17
Mar-17
Sep-16
Nov-16
Jul-16
May-16
Jan-16
Mar-16
Nov-15
Jul-15
Sep-15
May-15
Jan-15
Nov-14
Mar-15
-1.5 S.D.
20.0
Implied market price
2017E
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, M‐CHAI, POMPUI, TTL, NMG, SAWAD.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Outperform (17E TP Bt38.00) Close Bt35.25
Finance & Securities August 9, 2017
Beat forecast/Below forecast/In line
Results in line Results date: August 8, 2017 Price Performance (%)
Continuing growth momentum We maintain our Outperform rating for MTLS as we see that it remains appealing on its favorable earnings growth prospects, which should continue outperforming financial peers, thanks in part to the promising industry outlook. 2Q17 net profit in line with both our forecast and the street MTLS’s 2Q17 net profit of Bt571mn (+90% YoY, +7% QoQ) was in line with both our forecast (Bt582mn) and the street estimate (Bt573mn). 2Q17 net profit came in at Bt571mn, up 90% YoY and 7% QoQ The upbeat results were due mainly to 1) robust loan growth of 70% YoY and 13% QoQ, with the primary loan growth driver coming from its new products (cars and agricultural land products); and 2) non‐interest income growth of 76% YoY and 12% QoQ. This should also be thanks largely to its ongoing aggressive branch expansion to 2,046 branches at end‐2Q17 from 1,874 branches at end‐1Q17 vs. 1,664 branches at end‐ 16, with 172 and 382 new branches opened in 2Q17 and 1H17, respectively, vs. the firm’s plan to expand by around 600 new branches for 2017E. Meanwhile, the interest spread was quite stable QoQ at 20%. Provision expenses for 2Q17 continued to rise to 2.7% of loans vs. 2.24% in 1Q17 and 1.4% in 2016, due partly to its robust credit growth and weakened asset quality.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.071
1.469
KT ZMICO vs. consensus Share data
5.5%
8.2%
Reuters / Bloomberg
MTLS.BK/MTLS TB
Paid‐up Shares (m)
2,120.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
75.00/2,248.00
Foreign limit / actual (%)
49.00/6.24
52 week High / Low (Bt)
36.50/14.00
Avg. daily T/O (shares 000) NVDR (%)
11,776.00 3.47
Estimated free float (%)
31.68
Beta
1.57
URL
www.muangthaileasing.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Prapharas Nonthapiboon Analyst, no 17836 [email protected]
NPLs still increased both YoY and QoQ following its rapid credit growth Its NPLs in 2Q17 increased slightly QoQ to 1.18% from 1.09% in 1Q17 and 1.07% in 4Q16 following its rapid credit expansion. The increase in NPLs came mainly from NPLs in car title loans. The management still expects to control its NPL ratio for 2017E below 1.5%. However, its reserve‐to‐ NPL ratio for 2Q17 remained quite solid at 267% vs. 265% in 1Q17 and 257% in 4Q16. 1H17 net profit came in at Bt1.1bn (+91% YoY) With 1H17 net profit of Bt1.1bn representing 46% of our FY17 NP forecast, we keep our earnings forecast unchanged. Financials and Valuation FY Ended 31 Dec PPOP (Btm) Net profit (Btmn) EPS (Bt) EPS growth (%) BV (Bt) Dividend (Bt) FY Ended 31 Dec PER (x) PBV (x) Dividend yield (%) ROE (%)
2015 856 825 0.39 52% 2.67 0.20
2016 1,811 1,464 0.69 77% 3.16 0.10
2017E 3,214 2,397 1.13 64% 4.19 0.17
2018E 4,692 3,372 1.59 41% 5.61 0.24
2019E 6,331 4,424 2.09 31% 7.46 0.31
2015 90.58 13.22 0.57 15%
2016 51.04 11.17 0.28 24%
2017E 31.18 8.42 0.48 31%
2018E 22.16 6.29 0.68 32%
2019E 16.89 4.73 0.89 32%
66 (0) 2695‐5872
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q17 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
2Q16
1Q17
2Q17
% YoY % QoQ
1H16
1H17 % YoY
2016 2017E % YoY % 1H to 17E
Interest Income
897
1,415
1,600
78%
13% 1,667
3,015
81% 4,019
6,850
70%
44%
Interest Expenses
72
122
149
108%
22% 138
271
96% 328
660
101%
41%
Net Interest Income
826
1,293
1,451
76%
12% 1,529
2,744
79% 3,691
6,190
68%
44%
Non Interest Income
106
148
165
56%
12% 202
314
55% 453
671
48%
47%
Operating Income
931
1,441
1,616
74%
12% 1,731
3,057
77% 4,144
6,861
66%
45%
Operating Expenses
457
622
705
55%
13% 847
1,327
57% 1,985
3,038
53%
44%
Operating Profit
475
819
911
92%
11% 884
1,730
96% 2,159
3,823
77%
45%
Provision expenses (Reversal)
106
146
198
87%
36% 163
343
110% 332
778
134%
44%
131
137
106%
4% 136
268
97% 348
609
75%
44%
113%
‐9% (5) (11) 152% (15) (39) 158%
Taxes
66
Gain(loss) from foreclosed assets
(3) (6) (5)
Net Profit PPOP EPS (Bt)
300 409 0.14
536 688 0.25
571 774 0.27
2Q16
1Q17
Key Statistics and Ratios
90% 90% 90%
7% 580 13% 748 7% 0.27
1,107 1,462 0.52
2Q17
1H16
1H17
346
91% 1,464 95% 1,811 91% 0.69
2,397 3,214 1.13
Gross NPLs (Btmn)
162
284
162
346
251
0.94%
1.09%
1.18%
0.94%
1.18%
1.07% 1.33%
Loan Loss Reserve/NPLs
302%
265%
267%
302%
267%
257%
252%
Loan Loss Reserve/Loans
2.8%
2.9%
3.1%
2.8%
3.1%
2.7%
3.3%
Equity/Asset Loan to borrowing ratio
32.3%
27.0%
25.3%
32.3%
25.3%
145%
140%
Debt to equity ratio
2.1
2.7
Cost to Income
49.0%
43.2%
Non Interest Income/Total Income
11.4%
10.3%
Interest Spread
19.9%
20.1%
134%
46% 46% 46%
2016 2017E
Gross NPLs/Loans
492
27.4% 23.5%
145%
134%
139%
2.1
3.0
2.6
43.6%
48.9%
43.4%
47.9% 44.3%
10.2%
11.7%
10.3%
10.9%
20.2%
19.4%
20.0%
19.5% 19.7%
3.0
29%
64% 77% 64%
133% 3.2 9.8%
Net Interest Margin
20.8%
20.9%
21.0%
20.4%
20.7%
20.4% 20.4%
Loan Growth YoY
84.5%
79.6%
69.9%
84.5%
69.9%
86.4% 57.3%
Loan Growth QoQ
19.3%
10.3%
12.8%
19.3%
12.8%
Source: KTZMICO Research
Figure 2: MTLS's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 10.0
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
41
17
9.4
39
12
+2.5SD
8.9
37
7
+2.0SD
8.5
36
2
+1.5SD
8.1
34
-4
+1.0SD
7.6
32
-9
+0.5SD
7.2
30
-14
Average
6.8
28
-19
-0.5SD
6.3
26
-24
-1.0SD
5.9
25
-30
-1.5SD
5.5
23
-35
-2.0SD
5.0
21
-40
2017E
PBV (x)
+3.5SD
9.8
+3.0SD
+3.0 S.D.
9.0 8.0
+2.0 S.D. +1.0 S.D.
7.0 6.0 5.0
Avg. -1.0 S.D. -2.0 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-17
May-17
Jan-17
Mar-17
Sep-16
Nov-16
Jul-16
May-16
Jan-16
Mar-16
Nov-15
Jul-15
Sep-15
May-15
Jan-15
Mar-15
Nov-14
4.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: MTLS's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 60.0
+2.0 S.D.
55.0
Upside/ Downside vs. market price
(Bt)
(%)
63
78
50.6
57
62
+1.0SD
45.8
52
47
+0.5SD Average -0.5SD -1.0SD -1.5SD -2.0SD
40.9 36.1 31.2 26.4 21.5 16.7
46 41 35 30 24 19
31 16 0 -15 -31 -47
PER (x)
+2.0SD
55.5
+1.5SD
+1.5 S.D.
50.0
+1.0 S.D.
45.0 40.0
Avg.
35.0
-0.5 S.D.
30.0
-1.0 S.D.
25.0
Source: Bloomberg, KT ZMICO Research
Jul-17
May-17
Jan-17
Mar-17
Sep-16
Nov-16
Jul-16
May-16
Jan-16
Mar-16
Nov-15
Jul-15
Sep-15
May-15
Jan-15
Nov-14
Mar-15
-1.5 S.D.
20.0
Implied market price
2017E
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, M‐CHAI, POMPUI, TTL, NMG, SAWAD.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
