Muangthai Leasing - Global Alliance Partners
Muangthai Leasing Earnings Review
Buy (17E TP Bt29.00) Close Bt29.25
Finance & Securities February 21, 2017
Beat forecast/Below forecast/In line
Results beat forecasts; earnings upgrade underway Results date: February 20, 2017
Price Performance (%)
Earnings and target price under review for possible upgrade We maintain our Buy rating for MTLS as we see that it remains appealing on its favorable earnings outlook, which should continue outperforming financial peers. Moreover, we see a potential upgrade for our earnings forecasts and target price estimates for MTLS.
4Q16 net profit (Bt483mn) up 101% YoY and 20% QoQ The 4Q16 results were higher than both our forecast and the street estimate by 17‐19%, mainly on a lower‐than‐expected provision and operating expenses as well as a higher‐than‐expected interest spread. 2016 net profit came in at Bt1.46bn, up 77% YoY The upbeat results for 2016 were due mainly to robust loan growth of 86% YoY and non‐interest income growth of 36% YoY. This was backed mainly by its continuing branch expansion to 1,664 branches at end‐16 vs. 940 branches at end‐15, with 724 new branches opened in 2016 vs. 433 branches in 2015, respectively, beating the firm’s target of ~1,600 branches at end‐16. Meanwhile, the interest spread ended at 19.5%, which was ahead of our forecast, thanks mainly to its efficient funding cost management. Given the better‐than‐expected results, we see a potential earnings upgrade for MTLS, mainly on the potential for a better‐than‐expected interest spread and lower provision expenses, as well as the likelihood of higher‐than‐expected branch expansion.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.947
1.246
KT ZMICO vs. consensus Share data
‐7.1%
‐6.1%
Reuters / Bloomberg
MTLS.BK/MTLS TB
Paid‐up Shares (m)
2,120.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
62.00/1,770.00
Foreign limit / actual (%)
49.00/3.17
52 week High / Low (Bt)
30.50/14.00
Avg. daily T/O (shares 000) NVDR (%)
9,337.00 4.96
Estimated free float (%)
20.07
Beta
1.00
URL
www.muangthaileasing.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
NPLs increased both YoY and QoQ following its rapid credit growth Its NPLs at end‐4Q16 increased both YoY and QoQ following its rapid credit expansion. This resulted in a slightly higher NPL ratio both YoY and QoQ to 1.07% of loans in 4Q16 from 0.95% in 3Q16 and 0.92% in 4Q15. The increase in NPLs came mainly from NPLs in car title loans. Announced cash dividend of Bt0.10/share, just a 14.5% payout ratio MTLS announced a cash dividend of Bt0.10/share for the 2016 performance, representing a dividend payout ratio of just 14.5%, down from 51% for 2015. The lower dividend payout is aimed mainly at keeping its capital for further business expansion. We expect this low payout ratio to be its policy for the next few years. The X‐dividend date and payment date will be on 26 April and 15 May 2017, respectively.
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 (%)
2014 572 544 0.26 15% 2.41 0.13 2014 113.96 12.14 0.44 15%
2015 856 825 0.39 52% 2.67 0.20 2015 75.16 10.97 0.68 15%
2016 1,811 1,464 0.69 77% 3.16 0.10 2016 42.35 9.27 0.34 24%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 2,582 1,876 0.88 28% 3.74 0.31 2017E 33.05 7.81 1.06 26%
2018E 3,492 2,480 1.17 32% 4.60 0.41 2018E 25.01 6.35 1.40 28%
Figure 1: 4Q16 and 2016 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
4Q15
3Q16
4Q16
% YoY % QoQ
2015
2016
% YoY
Interest Income
660
1,082
1,270
92%
17% 2,225
4,019
81%
Interest Expenses
61
88
102
68%
16% 228
328
44%
Net Interest Income
600
994
1,168
95%
17% 1,998
3,691
85%
Non Interest Income
88
119
131
50%
10% 334
453
36%
Operating Income
687
1,113
1,300
89%
17% 2,331
4,144
78%
Operating Expenses
376
537
601
60%
12% 1,269
1,985
56%
Operating Profit
312
577
699
124%
21% 1,063
2,159
103% 1241%
Provision expenses (Reversal)
28
77
92
222%
19% 25
332
Taxes
61
95
117
92%
24% 207
348
Gain(loss) from foreclosed assets
(2) (4) (7)
239%
68% (6) (15)
143%
Net Profit PPOP EPS (Bt)
240 251 0.11
401 482 0.19
483 581 0.23
101% 132% 101%
20% 825 21% 856 20% 0.39
1,464 1,811 0.69
77% 112% 77%
4Q15
3Q16
4Q16
2015
2016
Gross NPLs (Btmn)
117
195
251
117
251
Gross NPLs/Loans
0.92%
0.95%
1.07%
0.92%
1.07%
Loan Loss Reserve/NPLs
288%
287%
257%
287.6%
257%
Loan Loss Reserve/Loans
2.7%
2.7%
2.7%
2.7%
2.7%
43.2%
29.3%
27.4%
43.2%
27.4%
177%
140%
139%
177.3%
139%
2.6
1.3
2.6
Key Statistics and Ratios
Equity/Asset Loan to borrowing ratio Debt to equity ratio
1.3
2.4
Cost to Income
54.7%
48.2%
46.2%
54.4%
47.9%
Non Interest Income/Total Income
12.7%
10.7%
10.1%
14.3%
10.9% 19.5%
Interest Spread
18.7%
20.3%
20.5%
17.9%
Net Interest Margin
20.3%
21.0%
21.2%
19.4%
20.4%
Loan Growth YoY
69.6%
86.9%
86.4%
69.6%
86.4%
Loan Growth QoQ
15.1%
18.9%
14.8%
68%
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 9.0 8.0 7.0 6.0 5.0
+3.0 S.D. +2.5 S.D. +2.0 S.D. +1.5 S.D. +1.0 S.D. +0.5 S.D.
Avg.
-0.5 S.D. -1.0 S.D. -1.5 S.D. -2.0 S.D.
Nov-14 Dec-14 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Jan-17 Feb-17
4.0
Source: Bloomberg, KT ZMICO Research
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
32
9
2017E
PBV (x)
+2.5SD
8.5
+2.0SD
8.1
30
4
+1.5SD
7.7
29
-1
+1.0SD
7.4
28
-6
+0.5SD
7.0
26
-11
Average
6.6
25
-16
-0.5SD
6.2
23
-21
-1.0SD
5.8
22
-26
-1.5SD
5.4
20
-31
-2.0SD
5.0
19
-36
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
+1.5 S.D.
50.0
+1.0 S.D.
45.0
+0.5 S.D.
35.0 30.0 25.0 20.0
Avg. -0.5 S.D. -1.0 S.D. -1.5 S.D. -2 S.D.
Nov-14 Dec-14 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Jan-17 Feb-17
40.0
Source: Bloomberg, KT ZMICO Research
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
51
73
52.8
47
60
+1.0SD
48.3
43
46
+0.5SD Average -0.5SD -1.0SD -1.5SD -2.0SD
43.8 39.3 34.8 30.3 25.9 21.4
39 35 31 27 23 19
32 19 5 -8 -22 -35
2017E
PER (x)
+2.0SD
57.2
+1.5SD
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, TFD. KT ZMICO is a co underwriter of RPH.
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
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
Buy (17E TP Bt29.00) Close Bt29.25
Finance & Securities February 21, 2017
Beat forecast/Below forecast/In line
Results beat forecasts; earnings upgrade underway Results date: February 20, 2017
Price Performance (%)
Earnings and target price under review for possible upgrade We maintain our Buy rating for MTLS as we see that it remains appealing on its favorable earnings outlook, which should continue outperforming financial peers. Moreover, we see a potential upgrade for our earnings forecasts and target price estimates for MTLS.
4Q16 net profit (Bt483mn) up 101% YoY and 20% QoQ The 4Q16 results were higher than both our forecast and the street estimate by 17‐19%, mainly on a lower‐than‐expected provision and operating expenses as well as a higher‐than‐expected interest spread. 2016 net profit came in at Bt1.46bn, up 77% YoY The upbeat results for 2016 were due mainly to robust loan growth of 86% YoY and non‐interest income growth of 36% YoY. This was backed mainly by its continuing branch expansion to 1,664 branches at end‐16 vs. 940 branches at end‐15, with 724 new branches opened in 2016 vs. 433 branches in 2015, respectively, beating the firm’s target of ~1,600 branches at end‐16. Meanwhile, the interest spread ended at 19.5%, which was ahead of our forecast, thanks mainly to its efficient funding cost management. Given the better‐than‐expected results, we see a potential earnings upgrade for MTLS, mainly on the potential for a better‐than‐expected interest spread and lower provision expenses, as well as the likelihood of higher‐than‐expected branch expansion.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.947
1.246
KT ZMICO vs. consensus Share data
‐7.1%
‐6.1%
Reuters / Bloomberg
MTLS.BK/MTLS TB
Paid‐up Shares (m)
2,120.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
62.00/1,770.00
Foreign limit / actual (%)
49.00/3.17
52 week High / Low (Bt)
30.50/14.00
Avg. daily T/O (shares 000) NVDR (%)
9,337.00 4.96
Estimated free float (%)
20.07
Beta
1.00
URL
www.muangthaileasing.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
NPLs increased both YoY and QoQ following its rapid credit growth Its NPLs at end‐4Q16 increased both YoY and QoQ following its rapid credit expansion. This resulted in a slightly higher NPL ratio both YoY and QoQ to 1.07% of loans in 4Q16 from 0.95% in 3Q16 and 0.92% in 4Q15. The increase in NPLs came mainly from NPLs in car title loans. Announced cash dividend of Bt0.10/share, just a 14.5% payout ratio MTLS announced a cash dividend of Bt0.10/share for the 2016 performance, representing a dividend payout ratio of just 14.5%, down from 51% for 2015. The lower dividend payout is aimed mainly at keeping its capital for further business expansion. We expect this low payout ratio to be its policy for the next few years. The X‐dividend date and payment date will be on 26 April and 15 May 2017, respectively.
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 (%)
2014 572 544 0.26 15% 2.41 0.13 2014 113.96 12.14 0.44 15%
2015 856 825 0.39 52% 2.67 0.20 2015 75.16 10.97 0.68 15%
2016 1,811 1,464 0.69 77% 3.16 0.10 2016 42.35 9.27 0.34 24%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 2,582 1,876 0.88 28% 3.74 0.31 2017E 33.05 7.81 1.06 26%
2018E 3,492 2,480 1.17 32% 4.60 0.41 2018E 25.01 6.35 1.40 28%
Figure 1: 4Q16 and 2016 earnings results Statement of comprehensive income (Btmn) Fiscal Year‐Ended Dec.
4Q15
3Q16
4Q16
% YoY % QoQ
2015
2016
% YoY
Interest Income
660
1,082
1,270
92%
17% 2,225
4,019
81%
Interest Expenses
61
88
102
68%
16% 228
328
44%
Net Interest Income
600
994
1,168
95%
17% 1,998
3,691
85%
Non Interest Income
88
119
131
50%
10% 334
453
36%
Operating Income
687
1,113
1,300
89%
17% 2,331
4,144
78%
Operating Expenses
376
537
601
60%
12% 1,269
1,985
56%
Operating Profit
312
577
699
124%
21% 1,063
2,159
103% 1241%
Provision expenses (Reversal)
28
77
92
222%
19% 25
332
Taxes
61
95
117
92%
24% 207
348
Gain(loss) from foreclosed assets
(2) (4) (7)
239%
68% (6) (15)
143%
Net Profit PPOP EPS (Bt)
240 251 0.11
401 482 0.19
483 581 0.23
101% 132% 101%
20% 825 21% 856 20% 0.39
1,464 1,811 0.69
77% 112% 77%
4Q15
3Q16
4Q16
2015
2016
Gross NPLs (Btmn)
117
195
251
117
251
Gross NPLs/Loans
0.92%
0.95%
1.07%
0.92%
1.07%
Loan Loss Reserve/NPLs
288%
287%
257%
287.6%
257%
Loan Loss Reserve/Loans
2.7%
2.7%
2.7%
2.7%
2.7%
43.2%
29.3%
27.4%
43.2%
27.4%
177%
140%
139%
177.3%
139%
2.6
1.3
2.6
Key Statistics and Ratios
Equity/Asset Loan to borrowing ratio Debt to equity ratio
1.3
2.4
Cost to Income
54.7%
48.2%
46.2%
54.4%
47.9%
Non Interest Income/Total Income
12.7%
10.7%
10.1%
14.3%
10.9% 19.5%
Interest Spread
18.7%
20.3%
20.5%
17.9%
Net Interest Margin
20.3%
21.0%
21.2%
19.4%
20.4%
Loan Growth YoY
69.6%
86.9%
86.4%
69.6%
86.4%
Loan Growth QoQ
15.1%
18.9%
14.8%
68%
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 9.0 8.0 7.0 6.0 5.0
+3.0 S.D. +2.5 S.D. +2.0 S.D. +1.5 S.D. +1.0 S.D. +0.5 S.D.
Avg.
-0.5 S.D. -1.0 S.D. -1.5 S.D. -2.0 S.D.
Nov-14 Dec-14 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Jan-17 Feb-17
4.0
Source: Bloomberg, KT ZMICO Research
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
32
9
2017E
PBV (x)
+2.5SD
8.5
+2.0SD
8.1
30
4
+1.5SD
7.7
29
-1
+1.0SD
7.4
28
-6
+0.5SD
7.0
26
-11
Average
6.6
25
-16
-0.5SD
6.2
23
-21
-1.0SD
5.8
22
-26
-1.5SD
5.4
20
-31
-2.0SD
5.0
19
-36
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
+1.5 S.D.
50.0
+1.0 S.D.
45.0
+0.5 S.D.
35.0 30.0 25.0 20.0
Avg. -0.5 S.D. -1.0 S.D. -1.5 S.D. -2 S.D.
Nov-14 Dec-14 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Jan-17 Feb-17
40.0
Source: Bloomberg, KT ZMICO Research
Implied market price
Upside/ Downside vs. market price
(Bt)
(%)
51
73
52.8
47
60
+1.0SD
48.3
43
46
+0.5SD Average -0.5SD -1.0SD -1.5SD -2.0SD
43.8 39.3 34.8 30.3 25.9 21.4
39 35 31 27 23 19
32 19 5 -8 -22 -35
2017E
PER (x)
+2.0SD
57.2
+1.5SD
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, TFD. KT ZMICO is a co underwriter of RPH.
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
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
