TISCO Financial Group AWS
TISCO Financial Group Outperform (17E TP Bt62.00)
Earnings Review
Close Bt62.75
Banking January 12, 2017
Beat forecast/Below forecast/In line
4Q16 net profit quite in line Price Performance (%)
Sound dividend yield the near‐term price appeal We maintain our Outperform rating for TISCO. We see that TISCO’s acquisition of SCBT’s retail business will help strengthen its retail banking platform and profitability in the longer term. Moreover, the sound dividend yield of ~4% remains TISCO’s near‐term main price appeal. 4Q16 net profit quite in line with both our forecast and the street TISCO’s 4Q16 net profit (NP) of Bt1.29bn was quite in line with our forecast (Bt1.24bn) and the street estimate (Bt1.28bn). Meanwhile, core profit was 11% ahead of our estimate due largely to its better‐than‐ expected operating cost control and the higher contribution from equity income. 4Q16 net profit stood at Bt1.29bn (+4% YoY, +3% QoQ) Loans still contracted 6% YoY and 0.7% QoQ for 4Q16. NIM remained solid and was quite stable QoQ. The provision was lower QoQ to 171 bps from 193bps in 3Q16 when it set a high provision following the booking of extra income in 3Q16. However, this level remained higher than its new mormalized level of ~130bps (+/‐) as it still set an extra provision for conservativeness in 4Q16.
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
6.195
6.995
KT ZMICO vs. consensus Share data
0.9%
‐3.8%
Reuters / Bloomberg
TISCO.BK/TISCO TB
Paid‐up Shares (m)
800.64
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
50.00/1,412.00
Foreign limit / actual (%)
49.00/48.03
52 week High / Low (Bt)
65.75/40.00
Avg. daily T/O (shares 000)
2,249.00
NVDR (%)
14.58
Estimated free float (%)
74.06
Beta
0.71
URL
www.tisco.co.th
CGR
FY16 net profit up 18% YoY The FY16 net profit stood at Bt5bn (+18% YoY), thanks mainly to higher NIM (+57 bps) on the benefit of the low interest rate environment along with a lower provision (from 211bps ot 172 bps) from lower losses on repossessed cars and improving asset quality. NPL and reserve position improved significantly from SSI case Its NPLs for 4Q16 declined sharply QoQ to 2.54% from 3.04%, mainly from lending to SSI Thailand (Bt821mn) finally being reclassified from NPLs to good loans (under special mention loans) in 4Q16 as expected. This improved its reserve‐to‐NPL ratio for 4Q16 QoQ to 140% from 107% in 3Q16 and its reserve to the BoT’s required LLR to 172% from 153% in 3Q16. NPLs excluding the SSI case still declined to ~2.9% mainly from the continued decline of NPLs in auto hire purchase loans. Financials and Valuation
Anti‐corruption
Level 4 (Certified)
FY Ended 31 Dec
2014
2015
2016
2017E
2018E
Net profit (Btm)
4,250
4,250
5,005
5,391
6,237
EPS (Bt)
5.31
5.31
6.25
6.73
7.79
EPS growth (%)
0.0%
0.0%
17.8%
7.7%
15.7%
Dividend (Bt) Book value (Bt)
2.00
2.20
2.30
2.50
2.60
32.14
35.09
38.96
43.68
49.07 2018E
Prapharas Nonthapiboon
FY Ended 31 Dec
2014
2015
2016
2017E
Analyst, no 17836
PER (X)
11.82
0.00
10.04
9.32
8.05
PBV (X)
1.95
1.79
1.61
1.44
1.28
3.19 17.4%
3.51 15.8%
3.67 16.9%
3.98 16.3%
4.15 16.8%
[email protected] 66 (0) 2695‐5872
Dividend yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 4Q16 and 2016 earnings results
Statement of Comprehensive Income Fiscal Year‐Ended December Net Interes t Income
% YoY
% QoQ
2015
2016
% YoY
2,665
4Q15
2,767
2,770
4%
0%
10,130
10,920
8%
Non Interes t Income
1,566
1,627
1,591
2%
‐2%
6,359
6,140
‐3%
Opera ti ng Income
4,231
4,394
4,361
3%
‐1%
16,489
17,060
3%
Opera ti ng Expens es
1,792
1,717
1,793
0%
4%
5,923
6,844
16%
Opera ti ng Profi t
2,133
2,358
2,259
6%
‐4%
9,404
8,983
‐4%
Provi s i on (Revers a l )
896
1,101
964
8%
‐12%
5,277
3,972
‐25%
Ta xes
301
317
306
2%
‐3%
1,032
1,221
18%
Net Profi t PPOP EPS (Bt)
1,244 2,134 1.55
1,250 2,349 1.56
1,293 2,254 1.61
4% 6% 4%
3% ‐4% 3%
4,250 9,399 5.31
5,005 8,965 6.25
18% ‐5% 18%
Key Statistics & Ratios
4Q15
Gros s NPLs (Btmn)
7,701
Gros s NPLs /Loa ns
3.23% 80.1% 126.0% 13.9% 17.9%
Loa n to Depos i t Ra ti o Loa n to Depos i ts a nd Borrowi ngs
Loa n Los s Res erve/NPLs LLR/BoT requi red res erve Ti er I/Ri s k As s et Ca pi ta l Adequa cy Ra ti o
3Q16
4Q16
3Q16 6,886
4Q16
2015
2016
5,710
7,701
5,710
3.04%
2.54%
3.23%
2.54%
107.0% 152.5% 15.2%
139.8% 172.6% 14.9%
80.1% 126.0% 13.9%
139.8% 172.6% 14.9%
19.9%
19.8%
17.9%
19.8%
150.7%
147.4%
145.1%
150.7%
145.1%
102.4%
104.0%
99.8%
102.4%
99.8%
Cos t to Income
42.3%
39.1%
41.1%
35.9%
40.1%
Non Interes t Income/Tota l Income
35.1%
36.1%
35.4%
38.6%
36.0%
Ta x ra te
19.5%
20.1%
19.1%
19.5%
19.6%
Net Interes t Ma rgi n
3.59%
4.06%
4.04%
3.41%
3.98%
Provi s i on to a vera ge l oa ns Loa n growth YoY Loa n growth QoQ
1.51% ‐9.3% 0.4%
1.93% ‐4.6% ‐1.9%
1.71% ‐5.6% ‐0.7%
2.11% ‐9.3%
1.72% ‐5.6%
Source: Bloomberg and KTZMICO Research
Figure 2: TISCO's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.4 2.0 1.6
+2 S.D. +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.
1.2 0.8
Source: Bloomberg, KT ZMICO Research
Jan-17
Jul-16
Jul-15
Jan-16
Jul-14
Jan-15
Jan-14
Jul-13
Jan-13
Jul-12
Jul-11
Jan-12
Jul-10
Jan-11
Jan-10
Jul-09
Jan-09
0.4
2017E
PBV (x)
Implied market Upside/ Downside price (Bt) to current price (%)
+2.0SD
2.0
88
40
+1.5SD
1.9
81
29
+1.0SD
1.7
74
19
+0.5SD
1.6
68
8
Average
1.4
61
-3
-0.5SD
1.2
55
-13
-1.0SD
1.1
48
-24
-1.5SD
0.9
41
-34
-2.0SD
0.8
35
-45
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: TISCO's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2017E
PER (x)
+2.0SD
10.5
71
13
+1.5SD
9.9
66
6
+1.0SD
9.2
62
-1
+0.5SD
8.5
57
-8
Average
7.9
53
-16
4
-0.5SD
7.2
49
-23
3
-1.0SD
6.5
44
-30
-1.5SD
5.9
40
-37
-2.0SD
5.2
35
-44
12
-0.5 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-17
Jul-15
Jan-16
Jan-15
Jul-14
Jul-13
Jul-09
Jan-10
Jan-09
5
Jan-14
6
Jul-12
-1 S.D. -1.5 S.D. -2 S.D.
Jan-13
7
Jan-12
8
Jul-11
9
+1.5 S.D. +1 S.D. +0.5 S.D. Avg.
Jan-11
10
Jul-10
11
+2 S.D.
Implied market Upside/ Downside price (Bt) to current price (%)
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. Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Satisfactory (scores: 60 – 69) Very Good (scores: 80 – 89) Pass (scores: 50 – 59)
Good (scores: 70 – 79)
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
Earnings Review
Close Bt62.75
Banking January 12, 2017
Beat forecast/Below forecast/In line
4Q16 net profit quite in line Price Performance (%)
Sound dividend yield the near‐term price appeal We maintain our Outperform rating for TISCO. We see that TISCO’s acquisition of SCBT’s retail business will help strengthen its retail banking platform and profitability in the longer term. Moreover, the sound dividend yield of ~4% remains TISCO’s near‐term main price appeal. 4Q16 net profit quite in line with both our forecast and the street TISCO’s 4Q16 net profit (NP) of Bt1.29bn was quite in line with our forecast (Bt1.24bn) and the street estimate (Bt1.28bn). Meanwhile, core profit was 11% ahead of our estimate due largely to its better‐than‐ expected operating cost control and the higher contribution from equity income. 4Q16 net profit stood at Bt1.29bn (+4% YoY, +3% QoQ) Loans still contracted 6% YoY and 0.7% QoQ for 4Q16. NIM remained solid and was quite stable QoQ. The provision was lower QoQ to 171 bps from 193bps in 3Q16 when it set a high provision following the booking of extra income in 3Q16. However, this level remained higher than its new mormalized level of ~130bps (+/‐) as it still set an extra provision for conservativeness in 4Q16.
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
6.195
6.995
KT ZMICO vs. consensus Share data
0.9%
‐3.8%
Reuters / Bloomberg
TISCO.BK/TISCO TB
Paid‐up Shares (m)
800.64
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
50.00/1,412.00
Foreign limit / actual (%)
49.00/48.03
52 week High / Low (Bt)
65.75/40.00
Avg. daily T/O (shares 000)
2,249.00
NVDR (%)
14.58
Estimated free float (%)
74.06
Beta
0.71
URL
www.tisco.co.th
CGR
FY16 net profit up 18% YoY The FY16 net profit stood at Bt5bn (+18% YoY), thanks mainly to higher NIM (+57 bps) on the benefit of the low interest rate environment along with a lower provision (from 211bps ot 172 bps) from lower losses on repossessed cars and improving asset quality. NPL and reserve position improved significantly from SSI case Its NPLs for 4Q16 declined sharply QoQ to 2.54% from 3.04%, mainly from lending to SSI Thailand (Bt821mn) finally being reclassified from NPLs to good loans (under special mention loans) in 4Q16 as expected. This improved its reserve‐to‐NPL ratio for 4Q16 QoQ to 140% from 107% in 3Q16 and its reserve to the BoT’s required LLR to 172% from 153% in 3Q16. NPLs excluding the SSI case still declined to ~2.9% mainly from the continued decline of NPLs in auto hire purchase loans. Financials and Valuation
Anti‐corruption
Level 4 (Certified)
FY Ended 31 Dec
2014
2015
2016
2017E
2018E
Net profit (Btm)
4,250
4,250
5,005
5,391
6,237
EPS (Bt)
5.31
5.31
6.25
6.73
7.79
EPS growth (%)
0.0%
0.0%
17.8%
7.7%
15.7%
Dividend (Bt) Book value (Bt)
2.00
2.20
2.30
2.50
2.60
32.14
35.09
38.96
43.68
49.07 2018E
Prapharas Nonthapiboon
FY Ended 31 Dec
2014
2015
2016
2017E
Analyst, no 17836
PER (X)
11.82
0.00
10.04
9.32
8.05
PBV (X)
1.95
1.79
1.61
1.44
1.28
3.19 17.4%
3.51 15.8%
3.67 16.9%
3.98 16.3%
4.15 16.8%
[email protected] 66 (0) 2695‐5872
Dividend yield (%) ROE (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 4Q16 and 2016 earnings results
Statement of Comprehensive Income Fiscal Year‐Ended December Net Interes t Income
% YoY
% QoQ
2015
2016
% YoY
2,665
4Q15
2,767
2,770
4%
0%
10,130
10,920
8%
Non Interes t Income
1,566
1,627
1,591
2%
‐2%
6,359
6,140
‐3%
Opera ti ng Income
4,231
4,394
4,361
3%
‐1%
16,489
17,060
3%
Opera ti ng Expens es
1,792
1,717
1,793
0%
4%
5,923
6,844
16%
Opera ti ng Profi t
2,133
2,358
2,259
6%
‐4%
9,404
8,983
‐4%
Provi s i on (Revers a l )
896
1,101
964
8%
‐12%
5,277
3,972
‐25%
Ta xes
301
317
306
2%
‐3%
1,032
1,221
18%
Net Profi t PPOP EPS (Bt)
1,244 2,134 1.55
1,250 2,349 1.56
1,293 2,254 1.61
4% 6% 4%
3% ‐4% 3%
4,250 9,399 5.31
5,005 8,965 6.25
18% ‐5% 18%
Key Statistics & Ratios
4Q15
Gros s NPLs (Btmn)
7,701
Gros s NPLs /Loa ns
3.23% 80.1% 126.0% 13.9% 17.9%
Loa n to Depos i t Ra ti o Loa n to Depos i ts a nd Borrowi ngs
Loa n Los s Res erve/NPLs LLR/BoT requi red res erve Ti er I/Ri s k As s et Ca pi ta l Adequa cy Ra ti o
3Q16
4Q16
3Q16 6,886
4Q16
2015
2016
5,710
7,701
5,710
3.04%
2.54%
3.23%
2.54%
107.0% 152.5% 15.2%
139.8% 172.6% 14.9%
80.1% 126.0% 13.9%
139.8% 172.6% 14.9%
19.9%
19.8%
17.9%
19.8%
150.7%
147.4%
145.1%
150.7%
145.1%
102.4%
104.0%
99.8%
102.4%
99.8%
Cos t to Income
42.3%
39.1%
41.1%
35.9%
40.1%
Non Interes t Income/Tota l Income
35.1%
36.1%
35.4%
38.6%
36.0%
Ta x ra te
19.5%
20.1%
19.1%
19.5%
19.6%
Net Interes t Ma rgi n
3.59%
4.06%
4.04%
3.41%
3.98%
Provi s i on to a vera ge l oa ns Loa n growth YoY Loa n growth QoQ
1.51% ‐9.3% 0.4%
1.93% ‐4.6% ‐1.9%
1.71% ‐5.6% ‐0.7%
2.11% ‐9.3%
1.72% ‐5.6%
Source: Bloomberg and KTZMICO Research
Figure 2: TISCO's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X) 2.4 2.0 1.6
+2 S.D. +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.
1.2 0.8
Source: Bloomberg, KT ZMICO Research
Jan-17
Jul-16
Jul-15
Jan-16
Jul-14
Jan-15
Jan-14
Jul-13
Jan-13
Jul-12
Jul-11
Jan-12
Jul-10
Jan-11
Jan-10
Jul-09
Jan-09
0.4
2017E
PBV (x)
Implied market Upside/ Downside price (Bt) to current price (%)
+2.0SD
2.0
88
40
+1.5SD
1.9
81
29
+1.0SD
1.7
74
19
+0.5SD
1.6
68
8
Average
1.4
61
-3
-0.5SD
1.2
55
-13
-1.0SD
1.1
48
-24
-1.5SD
0.9
41
-34
-2.0SD
0.8
35
-45
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: TISCO's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2017E
PER (x)
+2.0SD
10.5
71
13
+1.5SD
9.9
66
6
+1.0SD
9.2
62
-1
+0.5SD
8.5
57
-8
Average
7.9
53
-16
4
-0.5SD
7.2
49
-23
3
-1.0SD
6.5
44
-30
-1.5SD
5.9
40
-37
-2.0SD
5.2
35
-44
12
-0.5 S.D.
Source: Bloomberg, KT ZMICO Research
Jul-16
Jan-17
Jul-15
Jan-16
Jan-15
Jul-14
Jul-13
Jul-09
Jan-10
Jan-09
5
Jan-14
6
Jul-12
-1 S.D. -1.5 S.D. -2 S.D.
Jan-13
7
Jan-12
8
Jul-11
9
+1.5 S.D. +1 S.D. +0.5 S.D. Avg.
Jan-11
10
Jul-10
11
+2 S.D.
Implied market Upside/ Downside price (Bt) to current price (%)
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. Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Satisfactory (scores: 60 – 69) Very Good (scores: 80 – 89) Pass (scores: 50 – 59)
Good (scores: 70 – 79)
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
