Krung Thai Bank
Krung Thai Bank Unrated (16E TP Bt20.00)
Earnings Review
Close Bt17.80
Banking
Beat forecast/Below forecast/In line
April 22, 2016
1Q16 earnings above forecasts but asset quality deteriorated sharply Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
2.253
2.578
KT ZMICO vs. consensus Share data
0.8%
2.4%
Reuters / Bloomberg
KTB.BK/KTB TB
Paid‐up Shares (m)
13,976.06
Par (Bt)
5.15
Market cap (Bt bn / US$ m)
249.00/7,110.00
Foreign limit / actual (%)
25.00/12.24
52 week High / Low (Bt)
22.00/15.20
Avg. daily T/O (shares 000) NVDR (%)
50,993.00 5.48
Estimated free float (%)
44.93
Beta
1.19
URL
www.ktb.co.th
CGR
Anti‐corruption
Level 4 (Certified)
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. Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
Potential downside risk to earnings on much weaker asset quality We see that KTB’s inexpensive valuation and sound dividend yield of 4.3% remain its main share price supports. However, the sharp deterioration in its asset quality in 1Q16 as well as the impact of the recent MLR rate cut should post downside risk to our earnings forecasts, especially on the potential for a higher‐than‐expected provision and lower NIM. 1Q16 NP surpassed both our forecast and the street estimate KTB’s 1Q16 net profit (NP) of Bt7.5bn was above both our forecast (Bt6.5bn) and the street estimate (Bt6.8bn). The higher‐than‐expected NP was due largely to the unusually low operating expenses (especially for other expenses items) as OPEX, especially personnel expenses, normally rise every 1Q. This caused its cost‐to‐income ratio for 1Q16 to drop to just 41% vs. 49% in 1Q15 and 44% in 4Q15. 1Q16 net profit stood at Bt7.5bn (‐5% YoY, +11% QoQ) The weaker NP YoY was due to a much higher provision YoY following its much weaker asset quality QoQ. The bank (bank‐only basis) set an extra provision of ~Bt4bn in 1Q16 on top of its new guidance of the normal provision of Bt3.0bn/quarter (vs. ~Bt2.1bn/quarter earlier) vs. the normal provision in 1Q15. However, the solid non‐interest income, especially in regard to much stronger NIM (+39 bps YoY, +10 bps QoQ) and gain on trading and FX transactions (+67% YoY), could not offset the impact from the hike in the provision YoY. Meanwhile, loan growth remained weak (+2% YoY, ‐2% QoQ). The higher NP QoQ was backed mainly by improving NIM and lower OPEX as mentioned earlier. NPLs rose sharply QoQ in all loan segments KTB’s NPLs in 1Q16 rose sharply by Bt13.7bn or 18% QoQ to 3.7% of loans from 3.2% in 4Q15, partly from corporate and large SME clients combined with the small SME and retail sectors. The weakened asset quality prompted KTB to set a higher provision in the quarter to cope with higher NPL risks. However, the reserve‐to‐NPL ratio in 1Q16 still declined QoQ to 103% from 113%, while its reserve to the BoT’s required reserve also dropped QoQ to 135% from 138%, with these reserve ratios being quite weak compared to peers. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PPOP (Btmn)
52,032
59,433
59,845
62,554
67,877
Provision (Btmn)
18,643
30,542
27,410
24,584
21,522
Net Profit (Btmn)
33,191
28,492
31,730
36,964
45,123
2.37
2.04
2.27
2.64
3.23
EPS Growth (%)
‐3.8%
‐14.2%
11.4%
16.5%
22.1%
Book value (Bt)
16.60
17.59
18.99
20.78
23.12
Dividend (Bt)
0.90
0.76
0.90
0.93
1.13 2018E
EPS (Bt)
FY Ended 31 Dec
2014
2015
2016E
2017E
PER (X)
7.50
8.73
7.84
6.73
5.52
PBV (X)
1.07
1.01
0.94
0.86
0.77
5.06 15.1%
4.27 11.9%
5.06 12.4%
5.20 13.3%
6.35 14.7%
Div. Yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 1Q16 earnings results Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
1Q15
4Q15
1Q16 % YoY % QoQ
2015
2016E % YoY % 1Q to 16E
Net Interest Income
18,755
20,227
21,341
14%
6%
80,868
83,730
4%
Non Interest Income
8,332
10,397
9,382
13%
-10%
35,741
38,452
8%
24%
Operating Income
27,087
30,624
30,723
13%
0%
116,609
122,182
5%
25%
Operating Expenses
13,166
13,355
12,464
-5%
-7%
50,920
54,112
6%
23%
Provision (Reversal)
3,724
8,849
8,623
132%
-3%
30,542
27,410
-10%
31%
Tax expenses (Reversal)
1,978
1,383
1,775
-10%
28%
5,608
7,725
38%
23%
Net Profit
7,929
6,767
7,540
-5%
11%
28,492
31,730
11%
24%
11,666
16,353
16,146
38%
-1%
59,433
59,845
1%
27%
0.57
0.48
0.54
-5%
11%
2.04
2.27
11%
24%
PPOP-after tax EPS (Bt) Key Statistics & Ratios Gross NPLs (Btmn) Gross NPLs/Loans
1Q15
4Q15
1Q16
68,057
76,371
90,031
2015 76,371
2016E 85,673
2.82%
3.20%
3.62%
3.20%
3.5%
115.8%
112.5%
103.4%
112.5%
125.3%
Tier I to Risk Assets
10.8%
11.4%
11.9%
11.4%
12.8%
C apital Adequacy Ratio
14.2%
15.2%
15.7%
15.2%
15.4%
Loan to Deposit Ratio
89.0%
94.9%
95.1%
94.9%
95.7%
Loan to Deposits & Borrowings
84.4%
90.0%
90.0%
90.0%
90.5%
Provision to loans
0.76%
1.75%
1.73%
1.51%
1.30%
C ost to Income
48.6%
43.6%
40.6%
43.7%
44.3%
Non Interest Inc./Total Inc.
30.8%
34.0%
30.5%
30.7%
31.5%
Net Interest Margin
2.76%
3.05%
3.15%
3.02%
3.05%
Tax rate
Loan Loss Reserve/NPLs
25%
17.6%
16.4%
18.4%
16.0%
19.0%
Loan growth -YoY
7.6%
3.8%
1.9%
3.8%
4.0%
Loan growth -QoQ
0.1%
2.2%
-1.8%
Source: KTZMICO Research
Figure 2: KTB's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.0 1.8 1.6
2016E
+2 S.D. +1.5 S.D.
1.4
+1 S.D.
1.2
+0.5 S.D. Avg.
1.0 0.8
-0.5 S.D.
0.6
-1 S.D.
0.4
-1.5 S.D.
0.2
-2 S.D.
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
0.0
PBV (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
1.8
35
96
+1.5SD
1.6
31
73
+1.0SD
1.4
27
50
+0.5SD
1.2
23
28
Average
1.0
19
5
-0.5SD
0.8
15
-18
-1.0SD
0.6
11
-40
-1.5SD
0.3
7
-63
-2.0SD
0.1
3
-86
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: KTB's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 25
2016E
20
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
0
Jan-07
5
Jan-06
10
+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.
Jan-05
15
+2 S.D.
PER (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
16.3
37
108
+1.5SD
14.6
33
87
+1.0SD
12.9
29
65
+0.5SD
11.2
25
43
Average
9.5
22
21
-0.5SD
7.8
18
-1
-1.0SD
6.0
14
-23
-1.5SD
4.3
10
-45
-2.0SD
2.6
6
-67
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.
Earnings Review
Close Bt17.80
Banking
Beat forecast/Below forecast/In line
April 22, 2016
1Q16 earnings above forecasts but asset quality deteriorated sharply Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
2.253
2.578
KT ZMICO vs. consensus Share data
0.8%
2.4%
Reuters / Bloomberg
KTB.BK/KTB TB
Paid‐up Shares (m)
13,976.06
Par (Bt)
5.15
Market cap (Bt bn / US$ m)
249.00/7,110.00
Foreign limit / actual (%)
25.00/12.24
52 week High / Low (Bt)
22.00/15.20
Avg. daily T/O (shares 000) NVDR (%)
50,993.00 5.48
Estimated free float (%)
44.93
Beta
1.19
URL
www.ktb.co.th
CGR
Anti‐corruption
Level 4 (Certified)
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. Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
Potential downside risk to earnings on much weaker asset quality We see that KTB’s inexpensive valuation and sound dividend yield of 4.3% remain its main share price supports. However, the sharp deterioration in its asset quality in 1Q16 as well as the impact of the recent MLR rate cut should post downside risk to our earnings forecasts, especially on the potential for a higher‐than‐expected provision and lower NIM. 1Q16 NP surpassed both our forecast and the street estimate KTB’s 1Q16 net profit (NP) of Bt7.5bn was above both our forecast (Bt6.5bn) and the street estimate (Bt6.8bn). The higher‐than‐expected NP was due largely to the unusually low operating expenses (especially for other expenses items) as OPEX, especially personnel expenses, normally rise every 1Q. This caused its cost‐to‐income ratio for 1Q16 to drop to just 41% vs. 49% in 1Q15 and 44% in 4Q15. 1Q16 net profit stood at Bt7.5bn (‐5% YoY, +11% QoQ) The weaker NP YoY was due to a much higher provision YoY following its much weaker asset quality QoQ. The bank (bank‐only basis) set an extra provision of ~Bt4bn in 1Q16 on top of its new guidance of the normal provision of Bt3.0bn/quarter (vs. ~Bt2.1bn/quarter earlier) vs. the normal provision in 1Q15. However, the solid non‐interest income, especially in regard to much stronger NIM (+39 bps YoY, +10 bps QoQ) and gain on trading and FX transactions (+67% YoY), could not offset the impact from the hike in the provision YoY. Meanwhile, loan growth remained weak (+2% YoY, ‐2% QoQ). The higher NP QoQ was backed mainly by improving NIM and lower OPEX as mentioned earlier. NPLs rose sharply QoQ in all loan segments KTB’s NPLs in 1Q16 rose sharply by Bt13.7bn or 18% QoQ to 3.7% of loans from 3.2% in 4Q15, partly from corporate and large SME clients combined with the small SME and retail sectors. The weakened asset quality prompted KTB to set a higher provision in the quarter to cope with higher NPL risks. However, the reserve‐to‐NPL ratio in 1Q16 still declined QoQ to 103% from 113%, while its reserve to the BoT’s required reserve also dropped QoQ to 135% from 138%, with these reserve ratios being quite weak compared to peers. Financials and Valuation FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
PPOP (Btmn)
52,032
59,433
59,845
62,554
67,877
Provision (Btmn)
18,643
30,542
27,410
24,584
21,522
Net Profit (Btmn)
33,191
28,492
31,730
36,964
45,123
2.37
2.04
2.27
2.64
3.23
EPS Growth (%)
‐3.8%
‐14.2%
11.4%
16.5%
22.1%
Book value (Bt)
16.60
17.59
18.99
20.78
23.12
Dividend (Bt)
0.90
0.76
0.90
0.93
1.13 2018E
EPS (Bt)
FY Ended 31 Dec
2014
2015
2016E
2017E
PER (X)
7.50
8.73
7.84
6.73
5.52
PBV (X)
1.07
1.01
0.94
0.86
0.77
5.06 15.1%
4.27 11.9%
5.06 12.4%
5.20 13.3%
6.35 14.7%
Div. Yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 1Q16 earnings results Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
1Q15
4Q15
1Q16 % YoY % QoQ
2015
2016E % YoY % 1Q to 16E
Net Interest Income
18,755
20,227
21,341
14%
6%
80,868
83,730
4%
Non Interest Income
8,332
10,397
9,382
13%
-10%
35,741
38,452
8%
24%
Operating Income
27,087
30,624
30,723
13%
0%
116,609
122,182
5%
25%
Operating Expenses
13,166
13,355
12,464
-5%
-7%
50,920
54,112
6%
23%
Provision (Reversal)
3,724
8,849
8,623
132%
-3%
30,542
27,410
-10%
31%
Tax expenses (Reversal)
1,978
1,383
1,775
-10%
28%
5,608
7,725
38%
23%
Net Profit
7,929
6,767
7,540
-5%
11%
28,492
31,730
11%
24%
11,666
16,353
16,146
38%
-1%
59,433
59,845
1%
27%
0.57
0.48
0.54
-5%
11%
2.04
2.27
11%
24%
PPOP-after tax EPS (Bt) Key Statistics & Ratios Gross NPLs (Btmn) Gross NPLs/Loans
1Q15
4Q15
1Q16
68,057
76,371
90,031
2015 76,371
2016E 85,673
2.82%
3.20%
3.62%
3.20%
3.5%
115.8%
112.5%
103.4%
112.5%
125.3%
Tier I to Risk Assets
10.8%
11.4%
11.9%
11.4%
12.8%
C apital Adequacy Ratio
14.2%
15.2%
15.7%
15.2%
15.4%
Loan to Deposit Ratio
89.0%
94.9%
95.1%
94.9%
95.7%
Loan to Deposits & Borrowings
84.4%
90.0%
90.0%
90.0%
90.5%
Provision to loans
0.76%
1.75%
1.73%
1.51%
1.30%
C ost to Income
48.6%
43.6%
40.6%
43.7%
44.3%
Non Interest Inc./Total Inc.
30.8%
34.0%
30.5%
30.7%
31.5%
Net Interest Margin
2.76%
3.05%
3.15%
3.02%
3.05%
Tax rate
Loan Loss Reserve/NPLs
25%
17.6%
16.4%
18.4%
16.0%
19.0%
Loan growth -YoY
7.6%
3.8%
1.9%
3.8%
4.0%
Loan growth -QoQ
0.1%
2.2%
-1.8%
Source: KTZMICO Research
Figure 2: KTB's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.0 1.8 1.6
2016E
+2 S.D. +1.5 S.D.
1.4
+1 S.D.
1.2
+0.5 S.D. Avg.
1.0 0.8
-0.5 S.D.
0.6
-1 S.D.
0.4
-1.5 S.D.
0.2
-2 S.D.
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
0.0
PBV (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
1.8
35
96
+1.5SD
1.6
31
73
+1.0SD
1.4
27
50
+0.5SD
1.2
23
28
Average
1.0
19
5
-0.5SD
0.8
15
-18
-1.0SD
0.6
11
-40
-1.5SD
0.3
7
-63
-2.0SD
0.1
3
-86
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: KTB's PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 25
2016E
20
Source: Bloomberg, KT ZMICO Research
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
0
Jan-07
5
Jan-06
10
+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.
Jan-05
15
+2 S.D.
PER (x) Implied market
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
16.3
37
108
+1.5SD
14.6
33
87
+1.0SD
12.9
29
65
+0.5SD
11.2
25
43
Average
9.5
22
21
-0.5SD
7.8
18
-1
-1.0SD
6.0
14
-23
-1.5SD
4.3
10
-45
-2.0SD
2.6
6
-67
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.
