Thanachart Capital - Global Alliance Partners
Thanachart Capital Outperform (16E TP Bt41.00)
Earnings Review
Close Bt39.25
Banking July 20, 2016
Beat forecast/Below forecast/In line
2Q16 net profit in line Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
4.949
5.496
KT ZMICO vs. consensus Share data
6.1%
5.5%
Reuters / Bloomberg
TCAP.BK/TCAP TB
Paid‐up Shares (m)
1,206.47
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
47.00/1,353.00
Foreign limit / actual (%)
49.00/25.32
52 week High / Low (Bt)
39.25/28.25
Avg. daily T/O (shares 000)
4,418.00
NVDR (%)
16.42
Estimated free float (%)
78.7
Beta
0.68
URL
www.thanachart.co.th
CGR
Level 4 (Certified)
Anti‐corruption
Prapharas Nonthapiboon Analyst, no 17836
Switch to Outperform on lower upside We switch our rating to Outperform from Buy given that the recent price rally (+3% in 1 week and +13% in 1 month) leaves lower upside potential vs. the 16E target price. We like TCAP for its inexpensive valuation as well as its effective NPL control and stronger reserve position vs. peers. Moreover, the earnings cushion from the huge remaining tax loss benefit (~Bt4.0bn) will be the main support for its earnings and share price. 2Q16 net profit was in line with our forecast and the street TCAP’s 2Q16 net profit (NP) of Bt1.47bn (+5% YoY, +9% QoQ) was quite in line with our forecast (Bt1.41bn) and the street estimate (Bt1.51bn). 2Q16 net profit stood at Bt1.47bn (+5% YoY, +9% QoQ) The higher NP both YoY and QoQ should be thanks to widening NIM both YoY and QoQ, due to the low interest rate environment and its efficient NPL resolution. Meanwhile, loans still contracted by 4.3% YoY and 3.7% YTD, mainly from the drop in auto hire purchase loans. Non‐interest income was weaker both YoY and QoQ on lower gain on investment (Bt130mn in 2Q16 vs. Bt705mn in 2Q15 and Bt517mn in 1Q16), while net premium income improved both YoY and QoQ. Asset quality continues improving on its effective NPL resolution TCAP continued to manage down its NPLs, with the NPL ratio declining to 2.7% in 2Q16 from 2.8% in 1Q16 and 3.8% in 2Q15. This was thanks to its more effective NPL resolution when compared to other large and mid‐ sized banks that have seen NPL increases. As per TCAP’s guidance, TBANK will remain conservative in setting a high provision along with using the tax loss benefit in order to strengthen its reserve position. This resulted in a higher loan loss reserve (LLR) to NPL ratio to 125% in 2Q16 from 118% in 1Q16 vs. 98% in 2Q15 and a higher LLR to the mandatory reserve for 2Q16 to 164% from 161% in 1Q16 vs. 144% in 2Q15. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
Provision (Btm)
7,084
8,600
7,290
6,906
6,772
Net profit (Btm)
5,120
5,437
6,118
6,756
7,424
EPS (Bt)
4.24
4.67
5.25
5.80
6.37
EPS growth (%)
‐45%
10%
13%
10%
10%
Book value (Bt)
42.56
45.21
48.84
52.91
57.38
Dividend (Bt)
1.60
1.80
1.90
2.10
2.20
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PER (X)
9.25
8.41
7.47
6.77
6.16
[email protected]
PBV (X)
0.92
0.87
0.80
0.74
0.68
66 (0) 2695‐5872
Dividend yield (%)
4.08
4.59
4.84
5.35
5.61
ROE (%)
10%
10%
11%
11%
12%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q16 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended December
2Q15
1Q16
2Q16 % YoY % QoQ
1H15
1H16 % YoY
2015
2016E % YoY % 1H to 16E
Interes t Income
12,228
11,649
11,383
‐7%
‐2% 24,823
23,031
‐7% 48,640
48,070
‐1%
48%
Interes t Expens es
5,297
4,694
4,304
‐19%
‐8% 11,020
8,998
‐18% 20,910
19,734
‐6%
46%
Net Interes t Income
6,931
6,955
7,079
2%
2% 13,803
14,034
2% 27,730
28,336
2%
50%
Non Interes t Income
3,368
2,948
2,878
‐15%
‐2% 6,626
5,826
‐12% 12,474
11,593
‐7%
50%
Opera ti ng Income
10,299
9,903
9,957
‐3%
1% 20,429
19,860
‐3% 40,205
39,929
‐1%
50%
Opera ti ng Expens es
4,990
5,135
5,265
6%
3% 10,105
10,400
3% 20,319
20,296
0%
51%
‐20% 5,179
3,175
‐39% 8,600
7,290
‐15%
44%
‐30% (354) 317
NM 225
370
65%
86%
NM (5,624) (5,854)
NM
54%
Provis i on for l oa n l os s (Revers a l)
3,532
1,767
1,408
‐60%
Ta xes
(1,042) 186
131
NM
Mi nori ty Interes t
(1,426) (1,465) (1,686)
NM
NM (2,775) (3,151)
Net Profi t
1,393
1,351
1,466
5%
9% 2,724
2,817
3% 5,437
6,118
13%
46%
EPS (Bt)
1.09
1.06
1.22
12%
15% 2.13
2.33
10% 4.67
5.25
13%
44%
Key Statistics & Ratios
2Q15
1Q16
Gros s NPLs (Btmn)
29,290
21,467
Gros s NPLs /Loa ns
3.76%
Loa n Los s Res erve/NPLs Ca pi ta l Adequa cy Ra tio
17.2%
Loa n to Depos i t Ra ti o
2Q16
1H15
1H16
19,538
29,290
19,538
2.81%
2.71%
3.76%
2.71%
98.1% 118.4%
124.9%
18.2%
18.8%
108.9% 103.2%
102.8%
98.1% 124.9% 17.2%
18.8%
108.9% 102.8%
2015
2016E
22,581
21,665
2.96%
2.81%
116.2% 127.1% 17.9%
18.1%
106.7% 107.0%
Loa n to Depos i t & Borrowing
96.3%
92.1%
92.7%
96.3%
92.7%
94.7%
94.6%
Provis i on to loa ns
1.96%
1.01%
0.82%
1.44%
0.92%
1.20%
1.01%
Cos t to Income
48.5%
51.8%
52.9%
49.5%
52.4%
50.5%
50.8%
Non Interes t Income/Tota l Income
32.7%
29.8%
28.9%
32.4%
29.3%
31.0%
29.0%
Net Interes t Ma rgi n
2.89%
2.90%
3.01%
2.87%
2.98%
2.85%
2.92%
‐58.7% ‐8.2% ‐1.6%
6.2% ‐4.2% ‐2.0%
4.0% ‐4.3% ‐1.7%
‐6.9% ‐8.2% ‐1.6%
5.0% ‐4.3% ‐1.7%
2.0% ‐5.4%
3.0% 1.0%
Ta x ra te Loa n Growth YoY Loa n Growth QoQ Source: KTZMICO Research
Figure 2: TCAP's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2016E
1.6 1.4
0.8
Avg.
Source: Bloomberg, KT ZMICO Research
Jul-16
Sep-15
Dec-14
Jun-13
Mar-14
Sep-12
Nov-11
Feb-11
Jul-06
Oct-05
Jan-05
0.2
May-10
0.4
Aug-09
0.6
Nov-08
-0.5 S.D. -1 S.D. -1.5 S.D. -2 S.D.
Jan-08
1.0
+2 S.D. +1.5 S.D. +1 S.D. +0.5 S.D.
Apr-07
1.2
PBV (x)
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
1.2
60
52
+1.5SD
1.1
55
39
+1.0SD
1.0
50
27
+0.5SD
0.9
45
14
Average
0.8
40
2
-0.5SD
0.7
35
-10
-1.0SD
0.6
30
-23
-1.5SD
0.5
25
-35
-2.0SD
0.4
20
-48
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: TCAP's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2016E
18
PER (x)
+2 S.D.
16
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
12.2
64
64
+1.5SD
10.9
57
46
+1.0SD
9.6
51
29
-1 S.D.
+0.5SD
8.3
44
11
-2S.D.
Average
7.0
37
-6
2
-0.5SD
5.7
30
-23
0
-1.0SD
4.4
23
-41
-1.5SD
3.1
17
-58
-2.0SD
1.9
10
-75
14
+1 S.D.
12
Source: Bloomberg, KT ZMICO Research
Jul-16
Dec-14
Sep-15
Mar-14
Jun-13
Sep-12
Nov-11
Feb-11
May-10
Aug-09
Nov-08
Oct-05
Jan-05
4
Jul-06
6
Apr-07
8
Jan-08
Avg.
10
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. 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
th
th
th
th
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 Bt39.25
Banking July 20, 2016
Beat forecast/Below forecast/In line
2Q16 net profit in line Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
4.949
5.496
KT ZMICO vs. consensus Share data
6.1%
5.5%
Reuters / Bloomberg
TCAP.BK/TCAP TB
Paid‐up Shares (m)
1,206.47
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
47.00/1,353.00
Foreign limit / actual (%)
49.00/25.32
52 week High / Low (Bt)
39.25/28.25
Avg. daily T/O (shares 000)
4,418.00
NVDR (%)
16.42
Estimated free float (%)
78.7
Beta
0.68
URL
www.thanachart.co.th
CGR
Level 4 (Certified)
Anti‐corruption
Prapharas Nonthapiboon Analyst, no 17836
Switch to Outperform on lower upside We switch our rating to Outperform from Buy given that the recent price rally (+3% in 1 week and +13% in 1 month) leaves lower upside potential vs. the 16E target price. We like TCAP for its inexpensive valuation as well as its effective NPL control and stronger reserve position vs. peers. Moreover, the earnings cushion from the huge remaining tax loss benefit (~Bt4.0bn) will be the main support for its earnings and share price. 2Q16 net profit was in line with our forecast and the street TCAP’s 2Q16 net profit (NP) of Bt1.47bn (+5% YoY, +9% QoQ) was quite in line with our forecast (Bt1.41bn) and the street estimate (Bt1.51bn). 2Q16 net profit stood at Bt1.47bn (+5% YoY, +9% QoQ) The higher NP both YoY and QoQ should be thanks to widening NIM both YoY and QoQ, due to the low interest rate environment and its efficient NPL resolution. Meanwhile, loans still contracted by 4.3% YoY and 3.7% YTD, mainly from the drop in auto hire purchase loans. Non‐interest income was weaker both YoY and QoQ on lower gain on investment (Bt130mn in 2Q16 vs. Bt705mn in 2Q15 and Bt517mn in 1Q16), while net premium income improved both YoY and QoQ. Asset quality continues improving on its effective NPL resolution TCAP continued to manage down its NPLs, with the NPL ratio declining to 2.7% in 2Q16 from 2.8% in 1Q16 and 3.8% in 2Q15. This was thanks to its more effective NPL resolution when compared to other large and mid‐ sized banks that have seen NPL increases. As per TCAP’s guidance, TBANK will remain conservative in setting a high provision along with using the tax loss benefit in order to strengthen its reserve position. This resulted in a higher loan loss reserve (LLR) to NPL ratio to 125% in 2Q16 from 118% in 1Q16 vs. 98% in 2Q15 and a higher LLR to the mandatory reserve for 2Q16 to 164% from 161% in 1Q16 vs. 144% in 2Q15. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
Provision (Btm)
7,084
8,600
7,290
6,906
6,772
Net profit (Btm)
5,120
5,437
6,118
6,756
7,424
EPS (Bt)
4.24
4.67
5.25
5.80
6.37
EPS growth (%)
‐45%
10%
13%
10%
10%
Book value (Bt)
42.56
45.21
48.84
52.91
57.38
Dividend (Bt)
1.60
1.80
1.90
2.10
2.20
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PER (X)
9.25
8.41
7.47
6.77
6.16
[email protected]
PBV (X)
0.92
0.87
0.80
0.74
0.68
66 (0) 2695‐5872
Dividend yield (%)
4.08
4.59
4.84
5.35
5.61
ROE (%)
10%
10%
11%
11%
12%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 2Q16 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended December
2Q15
1Q16
2Q16 % YoY % QoQ
1H15
1H16 % YoY
2015
2016E % YoY % 1H to 16E
Interes t Income
12,228
11,649
11,383
‐7%
‐2% 24,823
23,031
‐7% 48,640
48,070
‐1%
48%
Interes t Expens es
5,297
4,694
4,304
‐19%
‐8% 11,020
8,998
‐18% 20,910
19,734
‐6%
46%
Net Interes t Income
6,931
6,955
7,079
2%
2% 13,803
14,034
2% 27,730
28,336
2%
50%
Non Interes t Income
3,368
2,948
2,878
‐15%
‐2% 6,626
5,826
‐12% 12,474
11,593
‐7%
50%
Opera ti ng Income
10,299
9,903
9,957
‐3%
1% 20,429
19,860
‐3% 40,205
39,929
‐1%
50%
Opera ti ng Expens es
4,990
5,135
5,265
6%
3% 10,105
10,400
3% 20,319
20,296
0%
51%
‐20% 5,179
3,175
‐39% 8,600
7,290
‐15%
44%
‐30% (354) 317
NM 225
370
65%
86%
NM (5,624) (5,854)
NM
54%
Provis i on for l oa n l os s (Revers a l)
3,532
1,767
1,408
‐60%
Ta xes
(1,042) 186
131
NM
Mi nori ty Interes t
(1,426) (1,465) (1,686)
NM
NM (2,775) (3,151)
Net Profi t
1,393
1,351
1,466
5%
9% 2,724
2,817
3% 5,437
6,118
13%
46%
EPS (Bt)
1.09
1.06
1.22
12%
15% 2.13
2.33
10% 4.67
5.25
13%
44%
Key Statistics & Ratios
2Q15
1Q16
Gros s NPLs (Btmn)
29,290
21,467
Gros s NPLs /Loa ns
3.76%
Loa n Los s Res erve/NPLs Ca pi ta l Adequa cy Ra tio
17.2%
Loa n to Depos i t Ra ti o
2Q16
1H15
1H16
19,538
29,290
19,538
2.81%
2.71%
3.76%
2.71%
98.1% 118.4%
124.9%
18.2%
18.8%
108.9% 103.2%
102.8%
98.1% 124.9% 17.2%
18.8%
108.9% 102.8%
2015
2016E
22,581
21,665
2.96%
2.81%
116.2% 127.1% 17.9%
18.1%
106.7% 107.0%
Loa n to Depos i t & Borrowing
96.3%
92.1%
92.7%
96.3%
92.7%
94.7%
94.6%
Provis i on to loa ns
1.96%
1.01%
0.82%
1.44%
0.92%
1.20%
1.01%
Cos t to Income
48.5%
51.8%
52.9%
49.5%
52.4%
50.5%
50.8%
Non Interes t Income/Tota l Income
32.7%
29.8%
28.9%
32.4%
29.3%
31.0%
29.0%
Net Interes t Ma rgi n
2.89%
2.90%
3.01%
2.87%
2.98%
2.85%
2.92%
‐58.7% ‐8.2% ‐1.6%
6.2% ‐4.2% ‐2.0%
4.0% ‐4.3% ‐1.7%
‐6.9% ‐8.2% ‐1.6%
5.0% ‐4.3% ‐1.7%
2.0% ‐5.4%
3.0% 1.0%
Ta x ra te Loa n Growth YoY Loa n Growth QoQ Source: KTZMICO Research
Figure 2: TCAP's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2016E
1.6 1.4
0.8
Avg.
Source: Bloomberg, KT ZMICO Research
Jul-16
Sep-15
Dec-14
Jun-13
Mar-14
Sep-12
Nov-11
Feb-11
Jul-06
Oct-05
Jan-05
0.2
May-10
0.4
Aug-09
0.6
Nov-08
-0.5 S.D. -1 S.D. -1.5 S.D. -2 S.D.
Jan-08
1.0
+2 S.D. +1.5 S.D. +1 S.D. +0.5 S.D.
Apr-07
1.2
PBV (x)
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
1.2
60
52
+1.5SD
1.1
55
39
+1.0SD
1.0
50
27
+0.5SD
0.9
45
14
Average
0.8
40
2
-0.5SD
0.7
35
-10
-1.0SD
0.6
30
-23
-1.5SD
0.5
25
-35
-2.0SD
0.4
20
-48
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: TCAP's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2016E
18
PER (x)
+2 S.D.
16
Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
12.2
64
64
+1.5SD
10.9
57
46
+1.0SD
9.6
51
29
-1 S.D.
+0.5SD
8.3
44
11
-2S.D.
Average
7.0
37
-6
2
-0.5SD
5.7
30
-23
0
-1.0SD
4.4
23
-41
-1.5SD
3.1
17
-58
-2.0SD
1.9
10
-75
14
+1 S.D.
12
Source: Bloomberg, KT ZMICO Research
Jul-16
Dec-14
Sep-15
Mar-14
Jun-13
Sep-12
Nov-11
Feb-11
May-10
Aug-09
Nov-08
Oct-05
Jan-05
4
Jul-06
6
Apr-07
8
Jan-08
Avg.
10
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. 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.
