Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

<ul><li>There is a boom in Bangkok, yet again.</li><li>This tends to be positive for banks.</li><li>It creates loan demand, both by developers and also companies making and selling products for construction.It also supports mortgage lending and collateral values behind loans.</li><li>A benign credit cycle, high provisions and reasonable margins is reason enough to be positive on Thai banks. Additionally is the current construction boom.</li><li><strong>But the warning and focus of this note is that not all banks are created equal. And it may be surprising, that some of Thailand&rsquo;s newest banks are showing trends completely at odds with mainstream banks. </strong></li><li><strong>It pays to differentiate, even in a boom</strong></li></ul>

There is a boom in Bangkok, yet again.This tends to be positive for banks.It creates loan demand, both by developers and also companies making and selling products for construction.It also supports mortgage lending and collateral values behind loans.A benign credit cycle, high provisions and reasonable margins is reason enough to be positive on Thai banks. Additionally is the current construction boom.But the warning and focus of this note is that not all banks are created equal. And it may be surprising, that some of Thailand&rsquo;s newest banks are showing trends completely at odds with mainstream banks. It pays to differentiate, even in a boom

Thailand: Despite Boom, Small Banks are Dull. Big Banks are Irresistible.

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>Our rating has been upgraded to Buy (from Outperform) with a new 12-month fair value (FV) of Bt9.65 (from Bt7.83), based on the earnings yield method using a required return of 8.6% (previously 9.6%), following upward earnings revisions and an adjustment to the beta range under new macroeconomic assumptions: Rf at 1.47% and MRP at 5.26% (from 1.48% and 6.83%).</li><li>The current share price is about 18% below the new fair value and is trading at just 0.5x PBV.</li><li>After the capital increase, D/E is expected to fall to 4.4x in 2025E from 6.0x in 2024. </li></ul>

Our rating has been upgraded to Buy (from Outperform) with a new 12-month fair value (FV) of Bt9.65 (from Bt7.83), based on the earnings yield method using a required return of 8.6% (previously 9.6%), following upward earnings revisions and an adjustment to the beta range under new macroeconomic assumptions: Rf at 1.47% and MRP at 5.26% (from 1.48% and 6.83%).The current share price is about 18% below the new fair value and is trading at just 0.5x PBV.After the capital increase, D/E is expected to fall to 4.4x in 2025E from 6.0x in 2024. 

Asia Sermkij Leasing - In-Line Earnings; Repossessed Vehicles Remain Elevated

<ul><li>We maintain our Outperform rating and the 12-month fair value (FV) of Bt7.38, based on a required return of 9.6%.</li><li>In terms of long-term growth, profit is expected to grow stronger than the industry average, with an estimated CAGR of 49% during 2025-27E, driven by a low base, effective management of repossessed assets, and NPL control measures that support asset quality recovery.</li><li>In the short term (tactical view), our outlook remains neutral.</li></ul>

We maintain our Outperform rating and the 12-month fair value (FV) of Bt7.38, based on a required return of 9.6%.In terms of long-term growth, profit is expected to grow stronger than the industry average, with an estimated CAGR of 49% during 2025-27E, driven by a low base, effective management of repossessed assets, and NPL control measures that support asset quality recovery.In the short term (tactical view), our outlook remains neutral.

Asia Sermkij Leasing - Expect Better YoY Performance in 2Q25E but Weaker QoQ

<ul><li>We maintain an Outperform rating with a 12-month fair value (12M FV) of Bt7.38 , based on a required return of 9.6%.</li><li>Earnings rebounded strongly QoQ thanks to lower provisioning, supported by a recovery in used truck prices and a substantial allowance for impairments made for repossessed vehicles in 4Q24.</li><li>ASK reported a 1Q25 net profit of Bt146mn (-16.3% YoY, +767.4% QoQ), broadly in line with our expectations.</li></ul>

We maintain an Outperform rating with a 12-month fair value (12M FV) of Bt7.38 , based on a required return of 9.6%.Earnings rebounded strongly QoQ thanks to lower provisioning, supported by a recovery in used truck prices and a substantial allowance for impairments made for repossessed vehicles in 4Q24.ASK reported a 1Q25 net profit of Bt146mn (-16.3% YoY, +767.4% QoQ), broadly in line with our expectations.

Asia Sermkij Leasing - Provisions Declined Due to Recovery in Used Truck Prices

<ul><li>We maintain an Outperform rating with a new 12-month fair value (12M FV) of Bt7.38 (previously Bt7.80), based on a revised required return of 9.6% (previously 7.6%), reflecting updated macro assumptions in the house view: risk-free rate (Rf) at 2.07% and market risk premium (MRP) at 5.58% (previously 2.27% and 4.43%, respectively).</li><li>Long-term growth remains strong, with profit expected to recover by 41% during 2025-27E, fueled by a decline in provisioning and a low earnings base in 2024, while the tactical risk remains neutral.</li><li>ASK's 1Q25E net profit is estimated at Bt144mn (-17% YoY, +760% QoQ), with the company scheduled to announce its results on May 9, 2025.</li></ul>

We maintain an Outperform rating with a new 12-month fair value (12M FV) of Bt7.38 (previously Bt7.80), based on a revised required return of 9.6% (previously 7.6%), reflecting updated macro assumptions in the house view: risk-free rate (Rf) at 2.07% and market risk premium (MRP) at 5.58% (previously 2.27% and 4.43%, respectively).Long-term growth remains strong, with profit expected to recover by 41% during 2025-27E, fueled by a decline in provisioning and a low earnings base in 2024, while the tactical risk remains neutral.ASK's 1Q25E net profit is estimated at Bt144mn (-17% YoY, +760% QoQ), with the company scheduled to announce its results on May 9, 2025.

1Q25E Provisions Likely to Fall QoQ, Boosting Profit

Thailand

Asia Sermkij Leasing Public Company Limited provides auto hire purchase services for new and used automobiles, including passenger and commercial cars, in Thailand. The company also offers auto and machine leasing, personal loans, factoring services, insurance brokerage, and auto registration and tax renewal services. It was founded in 1984 and is headquartered in Bangkok, Thailand.

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Asia Sermkij Leasing (ASK TB)

Thailand: Despite Boom, Small Banks are Dull. Big Banks are Irresistible.

There is a boom in Bangkok, yet again. This tends to be positive for banks. It creates loan demand, both by developers and also companies making...

Daniel Tabbush

Asia Sermkij Leasing - In-Line Earnings; Repossessed Vehicles Remain Elevated

Our rating has been upgraded to Buy (from Outperform) with a new 12-month fair value (FV) of Bt9.65 (from Bt7.83), based on the earnings yield...

Krungthai XSpring

Asia Sermkij Leasing - Expect Better YoY Performance in 2Q25E but Weaker QoQ

In terms of long-term growth, profit is expected to grow stronger than the industry average, with an estimated CAGR of 49% during 2025-27E, driven...

Krungthai XSpring

Asia Sermkij Leasing - Provisions Declined Due to Recovery in Used Truck Prices

Earnings rebounded strongly QoQ thanks to lower provisioning, supported by a recovery in used truck prices and a substantial allowance for...

Krungthai XSpring

1Q25E Provisions Likely to Fall QoQ, Boosting Profit

We maintain an Outperform rating with a new 12-month fair value (12M FV) of Bt7.38 (previously Bt7.80), based on a revised required return of 9.6%...

Krungthai XSpring

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