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.

Thematic (Sector/Industry)

<ul><li>KTX has revised its outlook on the policy interest rate, anticipating a potential 25 bps cut in 4Q24E, following the sharp appreciation of the baht, while rates are expected to remain steady in 2025E.</li><li>This anticipated cut could negatively impact profit estimates for the banking sector in 2025-26E by approximately 2.1%.</li><li>When valuing bank stocks using the earnings yield method, the advantages of lower interest rates are insufficient to offset the increase in the assumed market risk premium (MRP), as most banks have a high beta. </li></ul>

KTX has revised its outlook on the policy interest rate, anticipating a potential 25 bps cut in 4Q24E, following the sharp appreciation of the baht, while rates are expected to remain steady in 2025E.This anticipated cut could negatively impact profit estimates for the banking sector in 2025-26E by approximately 2.1%.When valuing bank stocks using the earnings yield method, the advantages of lower interest rates are insufficient to offset the increase in the assumed market risk premium (MRP), as most banks have a high beta. 

Banking - Small Banks Likely to Gain from Rate Cuts - October 1, 2024

Equity Bottom-Up

<ul><li>We initiate coverage on KKP with a Neutral rating and a 12-month fair value (12M FV) of Bt47.00, based on the earnings yield method with a required return of 12%.</li><li>The valuation metrics indicate that the stock is currently fully valued in the short term, reflecting much of the expected recovery.</li><li>Meanwhile, the tactical risks are neutral. The recovery of asset quality and the low base in 2024E are expected to foster average net profit growth at a CAGR of 14% in 2025-26E.</li></ul>

We initiate coverage on KKP with a Neutral rating and a 12-month fair value (12M FV) of Bt47.00, based on the earnings yield method with a required return of 12%.The valuation metrics indicate that the stock is currently fully valued in the short term, reflecting much of the expected recovery.Meanwhile, the tactical risks are neutral. The recovery of asset quality and the low base in 2024E are expected to foster average net profit growth at a CAGR of 14% in 2025-26E.

Kiatnakin Phatra Bank - Expected Recovery Largely Priced In

<ul><li>The seven commercial banks we are monitoring reported a combined net profit of Bt53.5bn in 2Q24, up 2.7% YoY but down 11.2% QoQ.</li><li>Overall, loan growth remained stagnant as banks continued to operate cautiously.</li><li>Meanwhile, net interest margins (NIM) faced pressure, albeit to a lesser extent, from the repricing of fixed deposits. </li></ul>

The seven commercial banks we are monitoring reported a combined net profit of Bt53.5bn in 2Q24, up 2.7% YoY but down 11.2% QoQ.Overall, loan growth remained stagnant as banks continued to operate cautiously.Meanwhile, net interest margins (NIM) faced pressure, albeit to a lesser extent, from the repricing of fixed deposits. 

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

<ul>
<li>Maintain BUY with a target price of Bt86.00. KKP’s 4Q22 net profit is expected to be flat YoY and QoQ at Bt2.0bn. This will mark a strong net profit growth</li>
<li>4Q22 outlook We expect Kiatnakin Phatra (KKP) to post a net profit of Bt2.0bn in 4Q22, down 1% YoY (-4% QoQ). Despite elevated net interest income from loan expansion</li>
<li>NIM is likely to slip to 4.3% in 4Q22 due to higher funding costs. The cost-to-income ratio will be higher QoQ to 46.6% given higher operating expenses.</li>
</ul>


Maintain BUY with a target price of Bt86.00. KKP’s 4Q22 net profit is expected to be flat YoY and QoQ at Bt2.0bn. This will mark a strong net profit growth
4Q22 outlook We expect Kiatnakin Phatra (KKP) to post a net profit of Bt2.0bn in 4Q22, down 1% YoY (-4% QoQ). Despite elevated net interest income from loan expansion
NIM is likely to slip to 4.3% in 4Q22 due to higher funding costs. The cost-to-income ratio will be higher QoQ to 46.6% given higher operating expenses.


KKP : Attractive Dividend Yield Despite Slowing Growth

<ul>
<li>Maintain BUY for KKP with a target price of Bt86.00. KKP’s net profit in 3Q22 came in line with expectations at Bt2.1bn, up 41% YoY (+2% QoQ).</li>
<li>3Q22 results in line with expectations KKP reported a net profit of Bt2.1bn in 3Q22,up 41% YoY (+2% QoQ). The strong YoY rise was supported by higher net interest income, </li>
<li>Net loan growth was strong at 7.1%QoQ making a 17.7%rise for 9M22.Elevated loan growth was largely due to higher demand from corporate and retail loans (auto HP and mortgage loans).</li>
</ul>


Maintain BUY for KKP with a target price of Bt86.00. KKP’s net profit in 3Q22 came in line with expectations at Bt2.1bn, up 41% YoY (+2% QoQ).
3Q22 results in line with expectations KKP reported a net profit of Bt2.1bn in 3Q22,up 41% YoY (+2% QoQ). The strong YoY rise was supported by higher net interest income, 
Net loan growth was strong at 7.1%QoQ making a 17.7%rise for 9M22.Elevated loan growth was largely due to higher demand from corporate and retail loans (auto HP and mortgage loans).


Thailand

Kiatnakin Bank Public Company Limited provides commercial banking services including commercial, developmental, consumer, hire-purchase, and mortgage financing to its customers in Thailand. The Company also provides securities brokerage and investment advisory services.

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Kiatnakin Bank (KKP TB)

Banking - Small Banks Likely to Gain from Rate Cuts - October 1, 2024

KTX has revised its outlook on the policy interest rate, anticipating a potential 25 bps cut in 4Q24E, following the sharp appreciation of the...

Krungthai XSpring

Kiatnakin Phatra Bank - Expected Recovery Largely Priced In

We initiate coverage on KKP with a Neutral rating and a 12-month fair value (12M FV) of Bt47.00, based on the earnings yield method with a required...

Krungthai XSpring

Industry Update - Banking: Jul 23, 2024

The seven commercial banks we are monitoring reported a combined net profit of Bt53.5bn in 2Q24, up 2.7% YoY but down 11.2% QoQ.

Krungthai XSpring

KKP : Attractive Dividend Yield Despite Slowing Growth

Maintain BUY with a target price of Bt86.00. KKP’s 4Q22 net profit is expected to be flat YoY and QoQ at Bt2.0bn. This will mark a strong net...

Pi Securities PCL, Thailand

KKP : Steady Growth with High Dividend

Maintain BUY for KKP with a target price of Bt86.00. KKP’s net profit in 3Q22 came in line with expectations at Bt2.1bn, up 41% YoY (+2% QoQ)....

Pi Securities PCL, Thailand

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