TMB Bank
TMB Bank Earnings Review
Underperform (17E TP Bt2.40) Close Bt2.44
Banking
Beat forecast/Below forecast/In line
April 18, 2017
1Q17 results in line Results date: April 17, 2017
Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.204
0.246
KT ZMICO vs. consensus Share data
‐2.0%
‐2.4%
Reuters / Bloomberg
TMB.BK/TMB TB
Paid‐up Shares (m)
43,839.86
Par (Bt)
0.95
Market cap (Bt bn / US$ m) Foreign limit / actual (%) 52 week High / Low (Bt) Avg. daily T/O (shares 000)
107.00/3,123.00 50.36/37.38 2.54/1.83 163,074.00
NVDR (%)
10.51
Estimated free float (%)
43.92
Beta
0.94
URL
www.tmbbank.com
CGR
Anti‐corruption
Level 4 (Certified)
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
Asset quality control still the bank’s challenging task We maintain our Underperform rating and the 17E target price for TMB. We still expect TMB to have a challenging task in handling the asset quality issue given that system NPL risks are continuing to come mainly from the SME segment despite the bank’s prudent risk management and provisioning. 1Q17 net profit in line with our forecast and the street estimate TMB posted 1Q17 net profit (NP) of Bt2.1bn (flat YoY, ‐2% QoQ), quite in line with our forecast (Bt2.18bn) and the street estimate (Bt2.15bn). 1Q17 net profit stood at Bt2.1bn (flat YoY, ‐2% QoQ) TMB’s 1Q17 operating results were mostly quite in line with the bank’s targets, except for net fee income and loan growth, with the deviation due to these being the most challenging targets. Net loans for 1Q17 grew 2.2% YoY and 0.9% QoQ (vs. the bank’s performing loan growth target of 8‐10% for 2017). Net fee income for 1Q17 was up 10% YoY, but down 8% QoQ on seasonality (vs. its target of +10‐20% for 2017). NIM weakened QoQ by around 10 bps, mainly on a lower loan yield. The bank continued to set a high provision at 150 bps in 1Q17 (vs. its guidance of 140‐150bps for 2017). Note that its performing loan growth (+0.9% QoQ) for 1Q17 was driven mainly by retail lending (+4.2% QoQ), with the primary boost from housing loans followed by corporate loans (+0.3% QoQ). Meanwhile, SME loans contracted 0.9% QoQ, mainly due to seasonality. NPLs stable QoQ following the bank’s loan write‐offs As per the bank’s latest indication that it will remain aggressive in controlling its NPLs through either more aggressive bad loan write‐offs or NPL sales, its NPL ratio for 1Q17 remained stable QoQ at 2.53% vs. its indication of 2.3‐2.5% for 2017. The reserve‐to‐NPL ratio for 1Q17 was stable QoQ at 144%, while the reserve to the BoT’s required reserve was slightly higher QoQ to 158% from 155%. Note that the bank did loan write‐offs of Bt2.2bn in 1Q17. Including these loan write‐offs, the NPL ratio would stand at 2.85% in 1Q17. Financials and Valuation FY Ended 31 Dec PPOP (Btm) Net profit (Btmn) EPS (Bt) EPS growth (%) BV (Bt) Dividend (Bt)
2015 14,665 9,333 0.21 ‐2% 1.75 0.060
2016 16,706 8,226 0.19 ‐12% 1.91 0.060
2017E 17,905 8,879 0.20 8% 2.06 0.061
2018E 19,630 10,480 0.24 18% 2.24 0.072
2019E 21,613 12,287 0.28 17% 2.45 0.079
FY Ended 31 Dec PER (x) PBV (x) Dividend yield (%) ROE (%)
2015 11.44 1.40 2.46 12.8%
2016 12.99 1.28 2.46 10.3%
2017E 12.04 1.19 2.49 10.2%
2018E 10.20 1.09 2.94 11.1%
2019E 8.70 1.00 3.22 12.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 1Q17 earnings results Statement of Comprehensive Income (Btmn) Fiscal Year‐Ended December Net Interest Income Non Interest Income Operating Income Operating Expenses Operating Profit before tax Provision for loan loss (Reversal) Taxes Net Profit PPOP‐after tax EPS (Bt) Key Statistics & Ratios Gross NPLs (Btmn)
1Q16 5,929 2,479 8,408 3,911 4,445 1,877 524 2,092 3,922 0.05
4Q16 6,391 2,944 9,335 4,515 4,844 2,234 441 2,138 4,403 0.05
1Q17 6,160 2,738 8,898 4,104 4,799 2,241 447 2,096 4,352 0.05
% YoY % QoQ 2016 4% ‐4% 24,761 10% ‐7% 10,462 6% ‐5% 35,223 5% ‐9% 16,589 8% ‐1% 17,860 19% 0% 8,649 ‐15% 1% 1,740 0% ‐2% 8,226 11% ‐1% 16,706 0% ‐2% 0.19
2017E 25,750 11,424 37,174 17,107 19,227 9,207 1,955 8,879 17,905 0.20
1Q16
4Q16
1Q17
2016
2017E
21,452
17,605
17,588
17,605
3.11%
2.53%
2.53%
2.53%
2.48%
Loan Loss Reserve/NPLs
139.5%
142.5%
143.8%
142.5%
148.3%
Loan Loss Reserve/Required Reserve
Gross NPLs/Loans
18,240
163.9%
155.4%
158.4%
155.4%
N.A.
Tier I/Risk Assets
11.5%
12.8%
12.8%
12.8%
13.3%
Capital Adequacy Ratio Loan to Deposit Ratio
16.9%
18.1%
18.2%
18.1%
18.3%
91.9%
99.1%
101.9%
99.1%
100.5%
Loan to Deposit & ST borrowing
87.8%
92.9%
95.5%
92.9%
94.8%
Cost to Income
47.4%
49.2%
47.8%
47.1%
46.0%
Non Interest Income/Total Income
29.5%
31.5%
30.8%
29.7%
30.7%
Net Interest Margin
2.98%
3.33%
3.21%
3.17%
3.26%
Tax rate
20.0%
17.1%
17.5%
17.4%
18.0%
Provision/Loans
1.28%
1.51%
1.50%
1.46%
1.45%
Provision/Average loans Loan growth YoY
1.33% 8.7%
1.52% 2.2%
1.51% 2.2%
1.47% 2.2%
1.50% 7.0%
0.9%
0.3%
0.9%
Loan growth QoQ
% YoY % 1Q to 17E 4% 24% 9% 24% 6% 24% 3% 24% 8% 25% 6% 24% 12% 23% 8% 24% 7% 24% 8% 24%
Source: KTZMICO Research
Figure 2: TMB’s financial guidance for 2017 vs. our forecasts
2015
2016**
2016
2017+
2017
Loa n growth Depos i t growth Net Interes t Margi n (NIM) Net fee i ncome growth
Actual 9.5% 12.8% 3.00% 36.4%
TMB's Guidance 6‐8%* 0‐2% 3.0‐3.2% (from ~3%) 5‐10%
Actual 2.2% ‐7.1% 3.17% 2.2%
TMB's Guidance 8‐10%* 8‐10% 3.2‐3.3% 10‐20%
KTZ's forecasts 7% 5% 3.26% 10%
Cos t to Income Ra ti o
50.3%
46‐49%
48.2%
45‐47%
47%
ROE
12.8%
10‐12%
10.3%
10‐12%
10.2%
3.0%
2.53%
1.45%
Performance Targets
NPL ra ti o Provi s i on (% of l oa ns )
0.94%
Approx. 3.0% 1.4‐1.5% (from 1.2‐1.3%)
1.46%
2.3‐2.5% 1.4‐1.5%
Loa n Los s Covera ge
142%
140‐145%
143%
140‐150%
Source: KT ZMICO Research * Performing loan growth ** Revised in Sept‐16 + Based on TMB’s 2017 GDP growth forecast of 3.2‐3.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
2.5% 148%
Figure 3: TMB's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2017E
2.5
PBV (x) Implied market
+2 S.D. 2.0 1.5 1.0
+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.
Source: Bloomberg, KT ZMICO Research
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
0.0
Jan-09
0.5
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
2.1
4.38
80
+1.5SD
1.9
4.00
64
+1.0SD
1.8
3.61
48
+0.5SD
1.6
3.23
32
Average
1.4
2.85
17
-0.5SD
1.2
2.47
1
-1.0SD
1.0
2.08
-15
-1.5SD
0.8
1.70
-30
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, POMPUI, TFD, CI, TTL, NMG.
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)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
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
Underperform (17E TP Bt2.40) Close Bt2.44
Banking
Beat forecast/Below forecast/In line
April 18, 2017
1Q17 results in line Results date: April 17, 2017
Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.204
0.246
KT ZMICO vs. consensus Share data
‐2.0%
‐2.4%
Reuters / Bloomberg
TMB.BK/TMB TB
Paid‐up Shares (m)
43,839.86
Par (Bt)
0.95
Market cap (Bt bn / US$ m) Foreign limit / actual (%) 52 week High / Low (Bt) Avg. daily T/O (shares 000)
107.00/3,123.00 50.36/37.38 2.54/1.83 163,074.00
NVDR (%)
10.51
Estimated free float (%)
43.92
Beta
0.94
URL
www.tmbbank.com
CGR
Anti‐corruption
Level 4 (Certified)
Prapharas Nonthapiboon Analyst, no 17836 [email protected] 66 (0) 2695‐5872
Asset quality control still the bank’s challenging task We maintain our Underperform rating and the 17E target price for TMB. We still expect TMB to have a challenging task in handling the asset quality issue given that system NPL risks are continuing to come mainly from the SME segment despite the bank’s prudent risk management and provisioning. 1Q17 net profit in line with our forecast and the street estimate TMB posted 1Q17 net profit (NP) of Bt2.1bn (flat YoY, ‐2% QoQ), quite in line with our forecast (Bt2.18bn) and the street estimate (Bt2.15bn). 1Q17 net profit stood at Bt2.1bn (flat YoY, ‐2% QoQ) TMB’s 1Q17 operating results were mostly quite in line with the bank’s targets, except for net fee income and loan growth, with the deviation due to these being the most challenging targets. Net loans for 1Q17 grew 2.2% YoY and 0.9% QoQ (vs. the bank’s performing loan growth target of 8‐10% for 2017). Net fee income for 1Q17 was up 10% YoY, but down 8% QoQ on seasonality (vs. its target of +10‐20% for 2017). NIM weakened QoQ by around 10 bps, mainly on a lower loan yield. The bank continued to set a high provision at 150 bps in 1Q17 (vs. its guidance of 140‐150bps for 2017). Note that its performing loan growth (+0.9% QoQ) for 1Q17 was driven mainly by retail lending (+4.2% QoQ), with the primary boost from housing loans followed by corporate loans (+0.3% QoQ). Meanwhile, SME loans contracted 0.9% QoQ, mainly due to seasonality. NPLs stable QoQ following the bank’s loan write‐offs As per the bank’s latest indication that it will remain aggressive in controlling its NPLs through either more aggressive bad loan write‐offs or NPL sales, its NPL ratio for 1Q17 remained stable QoQ at 2.53% vs. its indication of 2.3‐2.5% for 2017. The reserve‐to‐NPL ratio for 1Q17 was stable QoQ at 144%, while the reserve to the BoT’s required reserve was slightly higher QoQ to 158% from 155%. Note that the bank did loan write‐offs of Bt2.2bn in 1Q17. Including these loan write‐offs, the NPL ratio would stand at 2.85% in 1Q17. Financials and Valuation FY Ended 31 Dec PPOP (Btm) Net profit (Btmn) EPS (Bt) EPS growth (%) BV (Bt) Dividend (Bt)
2015 14,665 9,333 0.21 ‐2% 1.75 0.060
2016 16,706 8,226 0.19 ‐12% 1.91 0.060
2017E 17,905 8,879 0.20 8% 2.06 0.061
2018E 19,630 10,480 0.24 18% 2.24 0.072
2019E 21,613 12,287 0.28 17% 2.45 0.079
FY Ended 31 Dec PER (x) PBV (x) Dividend yield (%) ROE (%)
2015 11.44 1.40 2.46 12.8%
2016 12.99 1.28 2.46 10.3%
2017E 12.04 1.19 2.49 10.2%
2018E 10.20 1.09 2.94 11.1%
2019E 8.70 1.00 3.22 12.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: 1Q17 earnings results Statement of Comprehensive Income (Btmn) Fiscal Year‐Ended December Net Interest Income Non Interest Income Operating Income Operating Expenses Operating Profit before tax Provision for loan loss (Reversal) Taxes Net Profit PPOP‐after tax EPS (Bt) Key Statistics & Ratios Gross NPLs (Btmn)
1Q16 5,929 2,479 8,408 3,911 4,445 1,877 524 2,092 3,922 0.05
4Q16 6,391 2,944 9,335 4,515 4,844 2,234 441 2,138 4,403 0.05
1Q17 6,160 2,738 8,898 4,104 4,799 2,241 447 2,096 4,352 0.05
% YoY % QoQ 2016 4% ‐4% 24,761 10% ‐7% 10,462 6% ‐5% 35,223 5% ‐9% 16,589 8% ‐1% 17,860 19% 0% 8,649 ‐15% 1% 1,740 0% ‐2% 8,226 11% ‐1% 16,706 0% ‐2% 0.19
2017E 25,750 11,424 37,174 17,107 19,227 9,207 1,955 8,879 17,905 0.20
1Q16
4Q16
1Q17
2016
2017E
21,452
17,605
17,588
17,605
3.11%
2.53%
2.53%
2.53%
2.48%
Loan Loss Reserve/NPLs
139.5%
142.5%
143.8%
142.5%
148.3%
Loan Loss Reserve/Required Reserve
Gross NPLs/Loans
18,240
163.9%
155.4%
158.4%
155.4%
N.A.
Tier I/Risk Assets
11.5%
12.8%
12.8%
12.8%
13.3%
Capital Adequacy Ratio Loan to Deposit Ratio
16.9%
18.1%
18.2%
18.1%
18.3%
91.9%
99.1%
101.9%
99.1%
100.5%
Loan to Deposit & ST borrowing
87.8%
92.9%
95.5%
92.9%
94.8%
Cost to Income
47.4%
49.2%
47.8%
47.1%
46.0%
Non Interest Income/Total Income
29.5%
31.5%
30.8%
29.7%
30.7%
Net Interest Margin
2.98%
3.33%
3.21%
3.17%
3.26%
Tax rate
20.0%
17.1%
17.5%
17.4%
18.0%
Provision/Loans
1.28%
1.51%
1.50%
1.46%
1.45%
Provision/Average loans Loan growth YoY
1.33% 8.7%
1.52% 2.2%
1.51% 2.2%
1.47% 2.2%
1.50% 7.0%
0.9%
0.3%
0.9%
Loan growth QoQ
% YoY % 1Q to 17E 4% 24% 9% 24% 6% 24% 3% 24% 8% 25% 6% 24% 12% 23% 8% 24% 7% 24% 8% 24%
Source: KTZMICO Research
Figure 2: TMB’s financial guidance for 2017 vs. our forecasts
2015
2016**
2016
2017+
2017
Loa n growth Depos i t growth Net Interes t Margi n (NIM) Net fee i ncome growth
Actual 9.5% 12.8% 3.00% 36.4%
TMB's Guidance 6‐8%* 0‐2% 3.0‐3.2% (from ~3%) 5‐10%
Actual 2.2% ‐7.1% 3.17% 2.2%
TMB's Guidance 8‐10%* 8‐10% 3.2‐3.3% 10‐20%
KTZ's forecasts 7% 5% 3.26% 10%
Cos t to Income Ra ti o
50.3%
46‐49%
48.2%
45‐47%
47%
ROE
12.8%
10‐12%
10.3%
10‐12%
10.2%
3.0%
2.53%
1.45%
Performance Targets
NPL ra ti o Provi s i on (% of l oa ns )
0.94%
Approx. 3.0% 1.4‐1.5% (from 1.2‐1.3%)
1.46%
2.3‐2.5% 1.4‐1.5%
Loa n Los s Covera ge
142%
140‐145%
143%
140‐150%
Source: KT ZMICO Research * Performing loan growth ** Revised in Sept‐16 + Based on TMB’s 2017 GDP growth forecast of 3.2‐3.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
2.5% 148%
Figure 3: TMB's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2017E
2.5
PBV (x) Implied market
+2 S.D. 2.0 1.5 1.0
+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.
Source: Bloomberg, KT ZMICO Research
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
0.0
Jan-09
0.5
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
2.1
4.38
80
+1.5SD
1.9
4.00
64
+1.0SD
1.8
3.61
48
+0.5SD
1.6
3.23
32
Average
1.4
2.85
17
-0.5SD
1.2
2.47
1
-1.0SD
1.0
2.08
-15
-1.5SD
0.8
1.70
-30
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, POMPUI, TFD, CI, TTL, NMG.
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)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
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
