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>We maintain a Neutral rating with a new fair value (12M FV) of Bt52.00 (from Bt47.00 previously), based on the earnings yield method with a required return of 12%.</li><li>The valuation metrics indicate that the short-term stock price is fully valued, largely reflecting the profit recovery, while the tactical risk remains neutral.</li><li>The recovery in asset quality and the low base in 2024E are expected to support net profit growth to achieve a CAGR of 17% in 2025-26E.</li></ul>

We maintain a Neutral rating with a new fair value (12M FV) of Bt52.00 (from Bt47.00 previously), based on the earnings yield method with a required return of 12%.The valuation metrics indicate that the short-term stock price is fully valued, largely reflecting the profit recovery, while the tactical risk remains neutral.The recovery in asset quality and the low base in 2024E are expected to support net profit growth to achieve a CAGR of 17% in 2025-26E.

Kiatnakin Phatra Bank - Upward Earnings Revision; Lower-Than-Expected Provisions

<ul><li>We maintain a Neutral rating with a 12M FV of Bt47.00, based on the earnings yield method with a required return of 15.7%.</li><li>The valuation metrics indicate that the stock is fully valued at the current price.</li><li>Additionally, the tactical risk is neutral, and long- term growth is expected to be moderate.</li></ul>

We maintain a Neutral rating with a 12M FV of Bt47.00, based on the earnings yield method with a required return of 15.7%.The valuation metrics indicate that the stock is fully valued at the current price.Additionally, the tactical risk is neutral, and long- term growth is expected to be moderate.

Kiatnakin Phatra Bank - Lower Provision Led to Upbeat Earnings by 41%

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.

<ul>
<li>Where there are many other areas of interest in Asia, globally, the figures just out for Bangkok Bank are incredible to us, not in a positive way.</li>
<li>The bank has seen its NPLs rise from THB71bn to THB85bn to THB92bn from 4Q23 to 2Q24 to 3Q24, putting YTD growth at 29%</li>
<li>The bank has more than 1/4 of its loans in manufacturing &amp; commercial where loan balances are down 4.0% YTD and down 4.3% QoQ</li>
</ul>


Where there are many other areas of interest in Asia, globally, the figures just out for Bangkok Bank are incredible to us, not in a positive way.
The bank has seen its NPLs rise from THB71bn to THB85bn to THB92bn from 4Q23 to 2Q24 to 3Q24, putting YTD growth at 29%
The bank has more than 1/4 of its loans in manufacturing &amp; commercial where loan balances are down 4.0% YTD and down 4.3% QoQ


Bangkok Bank - BBL Sees 29% Higher NPLs YTD and Core Manufacturing & Commercial Loans -4% YTD

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

<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

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)

Kiatnakin Phatra Bank - Upward Earnings Revision; Lower-Than-Expected Provisions

We maintain a Neutral rating with a new fair value (12M FV) of Bt52.00 (from Bt47.00 previously), based on the earnings yield method with a...

Krungthai XSpring

Kiatnakin Phatra Bank - Lower Provision Led to Upbeat Earnings by 41%

We maintain a Neutral rating with a 12M FV of Bt47.00, based on the earnings yield method with a required return of 15.7%.

Krungthai XSpring

Bangkok Bank - BBL Sees 29% Higher NPLs YTD and Core Manufacturing & Commercial Loans -4% YTD

BBL is seeing dwindling loan balances in its core segment - manufacturing and commercial loans are -4% YTD. And what's worse: its NPLs are surging,...

Daniel Tabbush

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

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