Muangthai Leasing - Global Alliance Partners
Muangthai Leasing Company Update
Buy (16E TP Bt25.00) Close Bt19.50
Finance & Securities November 13, 2015
Earnings upgrade/Earnings downgrade/Overview unchanged
Long‐term growth still compelling Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.398
0.547
KT ZMICO vs. consensus Share data
0.5%
4.2%
Reuters / Bloomberg
MTLS.BK/MTLS TB
Paid‐up Shares (m)
2,120.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
41.00/1,151.00
Foreign limit / actual (%)
49.00/1.50
52 week High / Low (Bt)
20.70/8.60
Avg. daily T/O (shares 000) NVDR (%)
24,228.00 0.69
Estimated free float (%)
20.1
Beta
1.22
URL
www.muangthaileasing.co.th
CGR
Anti‐corruption
‐
Growth story to continue We maintain our Buy call for MTLS. We still like MTLS in regard to it being among the top growth stocks in the financial sector. We still expect it to show outstanding earnings growth vs. financial peers over the next three years thanks to its long‐standing expertise in the field and the favorable industry outlook. 3Q15 net profit slightly ahead of forecast by 5% MTLS’s 3Q15 net profit (NP) of Bt220mn was slightly ahead of our forecast of Bt210mn by 5%. Meanwhile, its core earnings were slightly ahead of our forecast by 8%, mainly on higher‐than‐expected NIM. 3Q15 net profit grew robustly by 58% YoY and 20% QoQ The robust NP growth YoY was due mainly to strong loan growth of 58% YoY and 17% QoQ and non‐interest income growth of 17% YoY and 4% QoQ, thanks to its aggressive branch expansion to 900 branches in 3Q15 (118 new branches in 3Q15 vs. 394 new branches in 9M15 and 91 new branches in 2014). Moreover, the net interest margin (NIM) improved both YoY and QoQ to 20.9% due to the much lower funding cost both YoY and QoQ, thanks to the new proceeds from the IPO in late 2014. Asset quality remained well controlled Asset quality remained well controlled as the NPL ratio in 3Q15 continued to decline to 1.01% vs. 1.25% in 2Q15, and its reserve‐to‐NPL ratio stayed solid at 281% in 3Q15. Revise up net profit estimates for 15‐17E by 5‐15% We raised our net profit forecasts for MTLS by 5‐15% for 2015‐17E mainly to reflect 1) its stronger‐than‐expected results (especially in regard to the potential for higher NIM and better operating cost control); and 2) the firm’s latest business targets (especially in regard to its more aggressive branch expansion plan). Note that MTLS now expects its top and bottom lines to grow around 50% in the next three years supported by its new plan for branch expansion to 1,750 branches by 2017E (from 1,400 branches earlier), with a new target to open 400‐500 branches/year (from 300 branches earlier). Following our NP upgrade, we raised our 16E target price to Bt25/share from Bt23.5 previously. Financials and Valuation FY Ended 31 Dec PPOP (Btm)
2013
2014
2015E
2016E
2017E
523
572
863
1,276
1,843
Net profit (Btmn)
351
544
844
1,205
1,728
EPS (Bt)
0.22
0.26
0.40
0.57
0.81
EPS growth (%)
‐9%
15%
55%
43%
43%
BV (Bt)
1.23
2.41
2.68
3.05
3.58
Dividend (Bt)
0.20
0.13
0.20
0.28
0.41
Prapharas Nonthapiboon
FY Ended 31 Dec
2013
2014
2015E
2016E
2017E
Analyst, no 17836
PER (x)
87.39
75.98
48.95
34.31
23.93
PBV (x)
15.85
8.10
7.28
6.40
5.45
1.04
0.67
1.02
1.46
2.09
20%
15%
16%
20%
25%
[email protected] 66 (0) 2695‐5872
Dividend yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 6
Figure 1: 3Q15 earnings results
Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
3Q14
2Q15
3Q15 % YoY % QoQ
9M14
Interest Income
404
502
591
46%
18% 1,135
Interest Expenses
72
50
59
‐18%
Net Interest Income
332
452
532
61%
9M15 % YoY
2015E % YoY % 9M to 15E
1,545
36% 2,261
44%
68%
17% 192
167
18% 943
1,378
‐13% 243
‐9%
69%
46% 2,018
55%
68%
Non Interest Income
72
81
84
17%
4% 213
246
16% 334
16%
74%
Operating Income
403
532
616
53%
16% 1,156
1,624
41% 2,352
48%
69%
Operating Expenses
219
298
327
49%
10% 643
893
39% 1,275
44%
70%
Operating Profit
184
235
289
57%
23% 513
731
43% 1,076
52%
68%
Provision expenses (Reversal)
7
5
13
68%
142% 5
(4) ‐172% 11
‐23%
‐34%
Taxes
34
45
55
Gain(loss) from foreclosed assets
(4) (1) (2)
62%
22% 100
‐48%
57% (11) (4)
146
46% 213
57%
68%
‐60% (8)
‐41%
54%
Net Profit
139
183
220
58%
20% 397
585
47% 844
55%
69%
PPOP
150
190
234
56%
24% 413
585
42% 863
51%
68%
EPS (Bt)
0.88
0.87
1.04
18%
20% 2.52
2.76
9% 3.98
55%
69%
3Q14
2Q15
3Q15
9M14
9M15
Gross NPLs (Btmn)
114
117
111
114
111
123
Gross NPLs/Loans
1.64%
1.25%
1.01%
1.64%
1.01%
1.04%
270.9% 281.3%
245.1%
Key Statistics and Ratios
Loan Loss Reserve/NPLs
270.9% 258.8% 281.3%
Loan Loss Reserve/Loans
2015E
4.4%
3.2%
2.8%
4.4%
2.8%
2.6%
28.6%
53.3%
46.3%
28.6%
46.3%
46.9%
Equity/Asset Loan to borrowing ratio
141.6% 215.2% 181.6%
141.6% 181.6%
190.0%
Debt to equity ratio
2.5
2.5
1.1
0.9
1.2
1.2
Cost to Income
54.4%
55.9%
53.1%
55.6%
55.0%
54.2%
Non Interest Income/Total Income
17.8%
15.1%
13.6%
18.4%
15.2%
14.2%
Net Interest Margin
19.7%
20.7%
20.9%
19.9%
20.4%
20.5%
Loan Growth YoY
5.9%
43.7%
57.8%
5.9%
57.8%
57.6%
Loan Growth QoQ
7.0%
15.8%
17.4%
7.0%
17.4%
Source: KTZMICO Research
Figure 2: Key changes in our earnings revision
Net Profit (Btmn) % Change in net profit from previous forecasts % YoY Change in net profit Loan growth (%) Net interest margin (NIM) Provision for loan loss (Btmn) Provision for loan loss (% to loans) Net fee and other income growth Cost to income ratio Source: KT ZMICO Research
2015E New Previous 844 804 5% 55% 58% 53% 20.5% 20.0% 11 3 0.09% 0.03% 16% 19% 54% 55%
2016E New Previous 1,205 1,118 8% 43% 45% 41% 20.5% 20.1% 60 36 0.35% 0.22% 16% 20% 53% 55%
2017E New Previous 1,728 1,507 15% 43% 44% 35% 19.8% 19.5% 98 65 0.40% 0.30% 16% 19% 50% 53%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 6
Figure 3: MTLS's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
5.5 5.0
18
+2.0SD
8.2
22
12
+1.5SD
7.7
21
6
+1.0SD
7.3
20
1
+0.5SD
6.9
19
-5
Average
6.5
17
-10
-0.5SD
6.1
16
-16
-1.0SD
5.7
15
-22
-1.5SD
5.3
14
-27
-2.0SD
4.9
13
-33
Avg. -0.5 S.D. -1.0 S.D. -1.5 S.D.
27-Oct-15 12-Nov-15
25-Sep-15 11-Oct-15
8-Aug-15 24-Aug-15 9-Sep-15
7-Jul-15 23-Jul-15
5-Jun-15 21-Jun-15
18-Apr-15 4-May-15 20-May-15
17-Mar-15 2-Apr-15
13-Feb-15 1-Mar-15
27-Dec-14 12-Jan-15 28-Jan-15
25-Nov-14 11-Dec-14
4.0
23
+2.5SD
-2 S.D.
4.5
23
8.6
+0.5 S.D.
+1.5 S.D. +1.0 S.D.
6.0
(%)
24
9.0
+2.0 S.D.
8.0
6.5
(Bt) +3.0SD
8.5
7.0
Upside/ Downside vs. market price
PBV (x)
+2.5 S.D.
7.5
Implied market price
2015E
9.0
Source: Bloomberg, KT ZMICO Research
Figure 4: MTLS's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
23
18
55.5
22
13
+2.0SD
53.4
21
9
+1.5SD
51.4
20
5
+1.0SD
49.3
20
1
+0.5SD Average -0.5SD -1.0SD -1.5SD -2.0SD
47.2 45.2 43.1 41.0 38.9 36.9
19 18 17 16 16 15
-4 -8 -12 -16 -20 -25
2015E
PER (x)
+3.0SD
57.6
Avg.
+2.5SD
-0.5 S.D. -1.0 S.D. -1.5 S.D.
60.0 +2.5 S.D. +2.0 S.D.
55.0 +1.5 S.D. 50.0 45.0 40.0
+1.0 S.D. +0.5 S.D.
-2 S.D.
Source: Bloomberg, KT ZMICO Research
11-Oct-15 27-Oct-15 12-Nov-15
9-Sep-15 25-Sep-15
8-Aug-15 24-Aug-15
21-Jun-15 7-Jul-15 23-Jul-15
20-May-15 5-Jun-15
2-Apr-15 18-Apr-15 4-May-15
1-Mar-15 17-Mar-15
28-Jan-15 13-Feb-15
11-Dec-14 27-Dec-14 12-Jan-15
30.0
25-Nov-14
35.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 6
Statement of Comprehensive Income (Btmn) Year‐end 31 Dec
2013
2014
2015E
2016E
2017E
Tota l Interes t Income Tota l Interes t Expens es Net Interes t Income Fee a nd Servi ce i ncome Other i ncome Tota l Non‐Interes t Income Opera ti ng Income Pers onnel expens es Reta l expens es Tota l Opera ti ng Expens es Opera ti ng Profi t Provi s i on expens es Extra ordi na ry Items Income Ta x expens e Mi nori ty Interes ts Net Profi t Pre Provi s i oni ng Opera ti ng Profi t (PPOP) EPS (Bt)
1,301 214 1,087 238 9 247 1,335 413 79 723 611 156 (15) 89 ‐ 351 523 0.22
1,567 266 1,301 279 9 289 1,590 514 97 883 708 14 (13) 136 ‐ 544 572 0.26
2,261 243 2,018 322 11 334 2,352 740 141 1,275 1,076 11 (8) 213 ‐ 844 863 0.40
3,364 409 2,955 372 14 386 3,341 1,044 190 1,762 1,580 60 (11) 304 ‐ 1,205 1,276 0.57
4,816 689 4,127 430 17 447 4,574 1,388 247 2,295 2,279 98 (17) 436 ‐ 1,728 1,843 0.81
Statement of Financial Position (Btmn) As at 31 Dec
2013
2014
2015E
2016E
2017E
Assets Ca s h Depos i ts wi th ba nks /Loa ns to rel a ted pa rti es Net Inves tment Gros s Loa ns Accrued Interes t Recei va bl e Les s : Loa n Los s Res erves Net Loa ns
94 13 1 5,835 ‐ (322) 5,513
706 19 501 7,448 ‐ (325) 7,123
90 15 ‐ 11,739 ‐ (300) 11,438
99 2 ‐ 17,053 ‐ (309) 16,744
109 2 ‐ 24,615 ‐ (334) 24,282
Premi s es a nd Equi pment, Net Other As s ets Total Assets
335 60 6,016
362 66 8,777
413 135 12,091
470 127 17,442
511 121 25,024
Liabilities & Equity O/D a nd Short‐term borrowi ngs from ba nks Other Borrowi ng Other Li a bi l i ti es Total Liabilities
230 3,669 180 4,079
500 2,967 204 3,671
3,680 2,500 236 6,416
5,083 5,630 271 10,984
8,430 8,695 316 17,441
Pa i d‐up Ca pi ta l Premi um on Sha re Ca pi ta l Reta i ned Ea rni ng Other Equi ty Items Mi nori ty Interes t Total Shareholders' Equity of the bank Total Liabilities and Shareholders Equity
1,575 ‐ 338 24 ‐ 1,937 6,016
2,120 2,380 538 68 ‐ 5,106 8,777
2,120 2,380 1,077 98 ‐ 5,675 12,091
2,120 2,380 1,829 128 ‐ 6,458 17,442
2,120 2,380 2,925 158 ‐ 7,583 25,024
Source: KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 6
Valuation and Ratio Analysis Year‐end 31 Dec
2013
2014
2015E
2016E
2017E
Per/Share Data (Bt) EPS DPS BVPS
0.22 0.20 1.23
0.26 0.13 2.41
0.40 0.20 2.68
0.57 0.28 3.05
0.81 0.41 3.58
Multiplier (X) P/E P/BV Di vi dend yi el d (%)
87.39 15.85 1.04
75.98 8.10 0.67
48.95 7.28 1.02
34.31 6.40 1.46
23.93 5.45 2.09
13.9% ‐8.8% 19.3% 14.5% 33.4% 21.6% 26.2% 16.6% 20.9% 22.2% 163.7%
54.8% 15.0% 19.7% 35.4% 17.3% 19.1% 22.0% 15.7% 9.4% 27.6% ‐10.4%
55.2% 55.2% 55.1% 31.0% 15.4% 47.9% 44.5% 52.1% 51.0% 57.6% 9.4%
42.7% 42.7% 46.4% 28.9% 15.5% 42.1% 38.2% 46.7% 47.7% 45.3% 48.7%
43.4% 43.4% 39.7% 26.8% 15.5% 36.9% 30.2% 44.3% 44.5% 44.3% 54.0%
Growth YoY (%) Net Profi t EPS Net Interes t Income Non Interes t Income Fee a nd Servi ce i ncome Opera ti ng Income Opera ti ng Expens es Opera ti ng Profi t PPOP Loa ns NPLs Financial Ratio Gros s NPLs (Btmn) Gros s NPLs /Loa ns Loa n Los s Res erve/NPLs Loa n Los s Res erve/Loa ns Provi s i on expens es (Revers a l )/Tota l l oa ns Equi ty/As s et Loa n to borrowi ng ra ti o Debt to Equi ty ra ti o Profitability Ratio ROA ROE Cos t to Income Non Interes t Income/Tota l Income Net Interes t Ma rgi n (NIM) Net profi t Ma rgi n Ta x ra te
Key Assumptions Loa n Growth ‐ Net Cos t to Income Net Interes t Ma rgi n Provi s i on expens es (Revers a l ) (Btmn) Provi s i on expens es (Revers a l )/Tota l l oa ns
125 112 123 182 281 2.1% 1.5% 1.0% 1.1% 1.1% 257.7% 290.2% 245.1% 169.5% 118.8% 5.5% 4.4% 2.6% 1.8% 1.4% 2.7% 0.2% 0.1% 0.4% 0.4% 32.2% 58.2% 46.9% 37.0% 30.3% 149.7% 214.8% 190.0% 159.2% 143.7% 2.11 0.72 1.13 1.70 2.30
6.5% 20.0% 54.2% 18.5% 20.44% 22.70% 20.2%
7.4% 15.5% 55.5% 18.2% 18.84% 29.32% 20.0%
8.1% 15.7% 54.2% 14.2% 20.47% 32.54% 20.0%
2013 22.2% 54.2% 20.4% 156 2.7%
2014 27.6% 55.5% 18.8% 14 0.2%
2015E 57.6% 54.2% 20.5% 11 0.1%
8.2% 19.9% 52.7% 11.6% 20.52% 32.13% 20.0%
8.1% 24.6% 50.2% 9.8% 19.81% 32.83% 20.0%
2016E 2017E 45.3% 44.3% 52.7% 50.2% 20.5% 19.8% 60 98 0.4% 0.4%
Source: KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 6
Note: KT ZMICO is a partnership between KTB and ZMICO. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, KBS, PSL, SVH, VNG, ZMICO, CPI . KT ZMICO is a financial advisor for U, LOXLEY, SUTHA, ZMICO, MAKRO, CPALL, PLE, SAFARI, PACE, TPOLY, TFG, BRR. KT ZMICO is a co‐underwriter of SCI, SR, J, TKN.
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 6 of 6
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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.
Buy (16E TP Bt25.00) Close Bt19.50
Finance & Securities November 13, 2015
Earnings upgrade/Earnings downgrade/Overview unchanged
Long‐term growth still compelling Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.398
0.547
KT ZMICO vs. consensus Share data
0.5%
4.2%
Reuters / Bloomberg
MTLS.BK/MTLS TB
Paid‐up Shares (m)
2,120.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
41.00/1,151.00
Foreign limit / actual (%)
49.00/1.50
52 week High / Low (Bt)
20.70/8.60
Avg. daily T/O (shares 000) NVDR (%)
24,228.00 0.69
Estimated free float (%)
20.1
Beta
1.22
URL
www.muangthaileasing.co.th
CGR
Anti‐corruption
‐
Growth story to continue We maintain our Buy call for MTLS. We still like MTLS in regard to it being among the top growth stocks in the financial sector. We still expect it to show outstanding earnings growth vs. financial peers over the next three years thanks to its long‐standing expertise in the field and the favorable industry outlook. 3Q15 net profit slightly ahead of forecast by 5% MTLS’s 3Q15 net profit (NP) of Bt220mn was slightly ahead of our forecast of Bt210mn by 5%. Meanwhile, its core earnings were slightly ahead of our forecast by 8%, mainly on higher‐than‐expected NIM. 3Q15 net profit grew robustly by 58% YoY and 20% QoQ The robust NP growth YoY was due mainly to strong loan growth of 58% YoY and 17% QoQ and non‐interest income growth of 17% YoY and 4% QoQ, thanks to its aggressive branch expansion to 900 branches in 3Q15 (118 new branches in 3Q15 vs. 394 new branches in 9M15 and 91 new branches in 2014). Moreover, the net interest margin (NIM) improved both YoY and QoQ to 20.9% due to the much lower funding cost both YoY and QoQ, thanks to the new proceeds from the IPO in late 2014. Asset quality remained well controlled Asset quality remained well controlled as the NPL ratio in 3Q15 continued to decline to 1.01% vs. 1.25% in 2Q15, and its reserve‐to‐NPL ratio stayed solid at 281% in 3Q15. Revise up net profit estimates for 15‐17E by 5‐15% We raised our net profit forecasts for MTLS by 5‐15% for 2015‐17E mainly to reflect 1) its stronger‐than‐expected results (especially in regard to the potential for higher NIM and better operating cost control); and 2) the firm’s latest business targets (especially in regard to its more aggressive branch expansion plan). Note that MTLS now expects its top and bottom lines to grow around 50% in the next three years supported by its new plan for branch expansion to 1,750 branches by 2017E (from 1,400 branches earlier), with a new target to open 400‐500 branches/year (from 300 branches earlier). Following our NP upgrade, we raised our 16E target price to Bt25/share from Bt23.5 previously. Financials and Valuation FY Ended 31 Dec PPOP (Btm)
2013
2014
2015E
2016E
2017E
523
572
863
1,276
1,843
Net profit (Btmn)
351
544
844
1,205
1,728
EPS (Bt)
0.22
0.26
0.40
0.57
0.81
EPS growth (%)
‐9%
15%
55%
43%
43%
BV (Bt)
1.23
2.41
2.68
3.05
3.58
Dividend (Bt)
0.20
0.13
0.20
0.28
0.41
Prapharas Nonthapiboon
FY Ended 31 Dec
2013
2014
2015E
2016E
2017E
Analyst, no 17836
PER (x)
87.39
75.98
48.95
34.31
23.93
PBV (x)
15.85
8.10
7.28
6.40
5.45
1.04
0.67
1.02
1.46
2.09
20%
15%
16%
20%
25%
[email protected] 66 (0) 2695‐5872
Dividend yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 6
Figure 1: 3Q15 earnings results
Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
3Q14
2Q15
3Q15 % YoY % QoQ
9M14
Interest Income
404
502
591
46%
18% 1,135
Interest Expenses
72
50
59
‐18%
Net Interest Income
332
452
532
61%
9M15 % YoY
2015E % YoY % 9M to 15E
1,545
36% 2,261
44%
68%
17% 192
167
18% 943
1,378
‐13% 243
‐9%
69%
46% 2,018
55%
68%
Non Interest Income
72
81
84
17%
4% 213
246
16% 334
16%
74%
Operating Income
403
532
616
53%
16% 1,156
1,624
41% 2,352
48%
69%
Operating Expenses
219
298
327
49%
10% 643
893
39% 1,275
44%
70%
Operating Profit
184
235
289
57%
23% 513
731
43% 1,076
52%
68%
Provision expenses (Reversal)
7
5
13
68%
142% 5
(4) ‐172% 11
‐23%
‐34%
Taxes
34
45
55
Gain(loss) from foreclosed assets
(4) (1) (2)
62%
22% 100
‐48%
57% (11) (4)
146
46% 213
57%
68%
‐60% (8)
‐41%
54%
Net Profit
139
183
220
58%
20% 397
585
47% 844
55%
69%
PPOP
150
190
234
56%
24% 413
585
42% 863
51%
68%
EPS (Bt)
0.88
0.87
1.04
18%
20% 2.52
2.76
9% 3.98
55%
69%
3Q14
2Q15
3Q15
9M14
9M15
Gross NPLs (Btmn)
114
117
111
114
111
123
Gross NPLs/Loans
1.64%
1.25%
1.01%
1.64%
1.01%
1.04%
270.9% 281.3%
245.1%
Key Statistics and Ratios
Loan Loss Reserve/NPLs
270.9% 258.8% 281.3%
Loan Loss Reserve/Loans
2015E
4.4%
3.2%
2.8%
4.4%
2.8%
2.6%
28.6%
53.3%
46.3%
28.6%
46.3%
46.9%
Equity/Asset Loan to borrowing ratio
141.6% 215.2% 181.6%
141.6% 181.6%
190.0%
Debt to equity ratio
2.5
2.5
1.1
0.9
1.2
1.2
Cost to Income
54.4%
55.9%
53.1%
55.6%
55.0%
54.2%
Non Interest Income/Total Income
17.8%
15.1%
13.6%
18.4%
15.2%
14.2%
Net Interest Margin
19.7%
20.7%
20.9%
19.9%
20.4%
20.5%
Loan Growth YoY
5.9%
43.7%
57.8%
5.9%
57.8%
57.6%
Loan Growth QoQ
7.0%
15.8%
17.4%
7.0%
17.4%
Source: KTZMICO Research
Figure 2: Key changes in our earnings revision
Net Profit (Btmn) % Change in net profit from previous forecasts % YoY Change in net profit Loan growth (%) Net interest margin (NIM) Provision for loan loss (Btmn) Provision for loan loss (% to loans) Net fee and other income growth Cost to income ratio Source: KT ZMICO Research
2015E New Previous 844 804 5% 55% 58% 53% 20.5% 20.0% 11 3 0.09% 0.03% 16% 19% 54% 55%
2016E New Previous 1,205 1,118 8% 43% 45% 41% 20.5% 20.1% 60 36 0.35% 0.22% 16% 20% 53% 55%
2017E New Previous 1,728 1,507 15% 43% 44% 35% 19.8% 19.5% 98 65 0.40% 0.30% 16% 19% 50% 53%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 6
Figure 3: MTLS's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
5.5 5.0
18
+2.0SD
8.2
22
12
+1.5SD
7.7
21
6
+1.0SD
7.3
20
1
+0.5SD
6.9
19
-5
Average
6.5
17
-10
-0.5SD
6.1
16
-16
-1.0SD
5.7
15
-22
-1.5SD
5.3
14
-27
-2.0SD
4.9
13
-33
Avg. -0.5 S.D. -1.0 S.D. -1.5 S.D.
27-Oct-15 12-Nov-15
25-Sep-15 11-Oct-15
8-Aug-15 24-Aug-15 9-Sep-15
7-Jul-15 23-Jul-15
5-Jun-15 21-Jun-15
18-Apr-15 4-May-15 20-May-15
17-Mar-15 2-Apr-15
13-Feb-15 1-Mar-15
27-Dec-14 12-Jan-15 28-Jan-15
25-Nov-14 11-Dec-14
4.0
23
+2.5SD
-2 S.D.
4.5
23
8.6
+0.5 S.D.
+1.5 S.D. +1.0 S.D.
6.0
(%)
24
9.0
+2.0 S.D.
8.0
6.5
(Bt) +3.0SD
8.5
7.0
Upside/ Downside vs. market price
PBV (x)
+2.5 S.D.
7.5
Implied market price
2015E
9.0
Source: Bloomberg, KT ZMICO Research
Figure 4: MTLS's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
23
18
55.5
22
13
+2.0SD
53.4
21
9
+1.5SD
51.4
20
5
+1.0SD
49.3
20
1
+0.5SD Average -0.5SD -1.0SD -1.5SD -2.0SD
47.2 45.2 43.1 41.0 38.9 36.9
19 18 17 16 16 15
-4 -8 -12 -16 -20 -25
2015E
PER (x)
+3.0SD
57.6
Avg.
+2.5SD
-0.5 S.D. -1.0 S.D. -1.5 S.D.
60.0 +2.5 S.D. +2.0 S.D.
55.0 +1.5 S.D. 50.0 45.0 40.0
+1.0 S.D. +0.5 S.D.
-2 S.D.
Source: Bloomberg, KT ZMICO Research
11-Oct-15 27-Oct-15 12-Nov-15
9-Sep-15 25-Sep-15
8-Aug-15 24-Aug-15
21-Jun-15 7-Jul-15 23-Jul-15
20-May-15 5-Jun-15
2-Apr-15 18-Apr-15 4-May-15
1-Mar-15 17-Mar-15
28-Jan-15 13-Feb-15
11-Dec-14 27-Dec-14 12-Jan-15
30.0
25-Nov-14
35.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 6
Statement of Comprehensive Income (Btmn) Year‐end 31 Dec
2013
2014
2015E
2016E
2017E
Tota l Interes t Income Tota l Interes t Expens es Net Interes t Income Fee a nd Servi ce i ncome Other i ncome Tota l Non‐Interes t Income Opera ti ng Income Pers onnel expens es Reta l expens es Tota l Opera ti ng Expens es Opera ti ng Profi t Provi s i on expens es Extra ordi na ry Items Income Ta x expens e Mi nori ty Interes ts Net Profi t Pre Provi s i oni ng Opera ti ng Profi t (PPOP) EPS (Bt)
1,301 214 1,087 238 9 247 1,335 413 79 723 611 156 (15) 89 ‐ 351 523 0.22
1,567 266 1,301 279 9 289 1,590 514 97 883 708 14 (13) 136 ‐ 544 572 0.26
2,261 243 2,018 322 11 334 2,352 740 141 1,275 1,076 11 (8) 213 ‐ 844 863 0.40
3,364 409 2,955 372 14 386 3,341 1,044 190 1,762 1,580 60 (11) 304 ‐ 1,205 1,276 0.57
4,816 689 4,127 430 17 447 4,574 1,388 247 2,295 2,279 98 (17) 436 ‐ 1,728 1,843 0.81
Statement of Financial Position (Btmn) As at 31 Dec
2013
2014
2015E
2016E
2017E
Assets Ca s h Depos i ts wi th ba nks /Loa ns to rel a ted pa rti es Net Inves tment Gros s Loa ns Accrued Interes t Recei va bl e Les s : Loa n Los s Res erves Net Loa ns
94 13 1 5,835 ‐ (322) 5,513
706 19 501 7,448 ‐ (325) 7,123
90 15 ‐ 11,739 ‐ (300) 11,438
99 2 ‐ 17,053 ‐ (309) 16,744
109 2 ‐ 24,615 ‐ (334) 24,282
Premi s es a nd Equi pment, Net Other As s ets Total Assets
335 60 6,016
362 66 8,777
413 135 12,091
470 127 17,442
511 121 25,024
Liabilities & Equity O/D a nd Short‐term borrowi ngs from ba nks Other Borrowi ng Other Li a bi l i ti es Total Liabilities
230 3,669 180 4,079
500 2,967 204 3,671
3,680 2,500 236 6,416
5,083 5,630 271 10,984
8,430 8,695 316 17,441
Pa i d‐up Ca pi ta l Premi um on Sha re Ca pi ta l Reta i ned Ea rni ng Other Equi ty Items Mi nori ty Interes t Total Shareholders' Equity of the bank Total Liabilities and Shareholders Equity
1,575 ‐ 338 24 ‐ 1,937 6,016
2,120 2,380 538 68 ‐ 5,106 8,777
2,120 2,380 1,077 98 ‐ 5,675 12,091
2,120 2,380 1,829 128 ‐ 6,458 17,442
2,120 2,380 2,925 158 ‐ 7,583 25,024
Source: KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 6
Valuation and Ratio Analysis Year‐end 31 Dec
2013
2014
2015E
2016E
2017E
Per/Share Data (Bt) EPS DPS BVPS
0.22 0.20 1.23
0.26 0.13 2.41
0.40 0.20 2.68
0.57 0.28 3.05
0.81 0.41 3.58
Multiplier (X) P/E P/BV Di vi dend yi el d (%)
87.39 15.85 1.04
75.98 8.10 0.67
48.95 7.28 1.02
34.31 6.40 1.46
23.93 5.45 2.09
13.9% ‐8.8% 19.3% 14.5% 33.4% 21.6% 26.2% 16.6% 20.9% 22.2% 163.7%
54.8% 15.0% 19.7% 35.4% 17.3% 19.1% 22.0% 15.7% 9.4% 27.6% ‐10.4%
55.2% 55.2% 55.1% 31.0% 15.4% 47.9% 44.5% 52.1% 51.0% 57.6% 9.4%
42.7% 42.7% 46.4% 28.9% 15.5% 42.1% 38.2% 46.7% 47.7% 45.3% 48.7%
43.4% 43.4% 39.7% 26.8% 15.5% 36.9% 30.2% 44.3% 44.5% 44.3% 54.0%
Growth YoY (%) Net Profi t EPS Net Interes t Income Non Interes t Income Fee a nd Servi ce i ncome Opera ti ng Income Opera ti ng Expens es Opera ti ng Profi t PPOP Loa ns NPLs Financial Ratio Gros s NPLs (Btmn) Gros s NPLs /Loa ns Loa n Los s Res erve/NPLs Loa n Los s Res erve/Loa ns Provi s i on expens es (Revers a l )/Tota l l oa ns Equi ty/As s et Loa n to borrowi ng ra ti o Debt to Equi ty ra ti o Profitability Ratio ROA ROE Cos t to Income Non Interes t Income/Tota l Income Net Interes t Ma rgi n (NIM) Net profi t Ma rgi n Ta x ra te
Key Assumptions Loa n Growth ‐ Net Cos t to Income Net Interes t Ma rgi n Provi s i on expens es (Revers a l ) (Btmn) Provi s i on expens es (Revers a l )/Tota l l oa ns
125 112 123 182 281 2.1% 1.5% 1.0% 1.1% 1.1% 257.7% 290.2% 245.1% 169.5% 118.8% 5.5% 4.4% 2.6% 1.8% 1.4% 2.7% 0.2% 0.1% 0.4% 0.4% 32.2% 58.2% 46.9% 37.0% 30.3% 149.7% 214.8% 190.0% 159.2% 143.7% 2.11 0.72 1.13 1.70 2.30
6.5% 20.0% 54.2% 18.5% 20.44% 22.70% 20.2%
7.4% 15.5% 55.5% 18.2% 18.84% 29.32% 20.0%
8.1% 15.7% 54.2% 14.2% 20.47% 32.54% 20.0%
2013 22.2% 54.2% 20.4% 156 2.7%
2014 27.6% 55.5% 18.8% 14 0.2%
2015E 57.6% 54.2% 20.5% 11 0.1%
8.2% 19.9% 52.7% 11.6% 20.52% 32.13% 20.0%
8.1% 24.6% 50.2% 9.8% 19.81% 32.83% 20.0%
2016E 2017E 45.3% 44.3% 52.7% 50.2% 20.5% 19.8% 60 98 0.4% 0.4%
Source: KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 6
Note: KT ZMICO is a partnership between KTB and ZMICO. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, KBS, PSL, SVH, VNG, ZMICO, CPI . KT ZMICO is a financial advisor for U, LOXLEY, SUTHA, ZMICO, MAKRO, CPALL, PLE, SAFARI, PACE, TPOLY, TFG, BRR. KT ZMICO is a co‐underwriter of SCI, SR, J, TKN.
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 6 of 6
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.
