Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Krung Thai is our value pick among Thai banks, having solid post-provision profitability, close to double digit ROE with a healthy balance sheet, along with undemanding PBV and PE ratios</li>
<li>We maintain Kasikorn on the buy list, as its cost of risk was well contained in 1Q24, a key positive catalyst for its improving post-provision returns</li>
<li>Bank of Thailand is currently accepting applications for digital banking licenses until 19 September 2024; incumbent banks and domestic big corporates are likely to form the core of applicants</li>
</ul>


Krung Thai is our value pick among Thai banks, having solid post-provision profitability, close to double digit ROE with a healthy balance sheet, along with undemanding PBV and PE ratios
We maintain Kasikorn on the buy list, as its cost of risk was well contained in 1Q24, a key positive catalyst for its improving post-provision returns
Bank of Thailand is currently accepting applications for digital banking licenses until 19 September 2024; incumbent banks and domestic big corporates are likely to form the core of applicants


Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts

<ul>
<li>Krung Thai has solid post-provision profitability, close to double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios</li>
<li>We add Kasikorn to the buy list, as its cost of risk sharply improved in 4Q23, suggesting that it peaked in 3Q23; this should improve post-provision returns going forward</li>
<li>We remove Ayudhya from the buy list, as its worsening cost of risk trends are eroding post-provision returns; it is also relatively weak in terms of capital adequacy</li>
</ul>


Krung Thai has solid post-provision profitability, close to double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
We add Kasikorn to the buy list, as its cost of risk sharply improved in 4Q23, suggesting that it peaked in 3Q23; this should improve post-provision returns going forward
We remove Ayudhya from the buy list, as its worsening cost of risk trends are eroding post-provision returns; it is also relatively weak in terms of capital adequacy


Thai Banks 4Q23 Screener; Stick with Krung Thai, Switch Out of Ayudhya into Kasikorn

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>The SET fluctuated in a narrow range and closed up for a third day, but it was weaker than other Asian bourses, which surged sharply, with tech stocks taking the lead.</li><li>Furthermore, volume decreased, large cap stocks showed mixed movement, and foreign investors turned to sell, which indicated that the index would face selling pressure.</li><li>The index approached the 1/2 Fibonacci resistance at 1,369 points before retreating, revealing the upward adjustment to be hindered by selling pressure. </li></ul>

The SET fluctuated in a narrow range and closed up for a third day, but it was weaker than other Asian bourses, which surged sharply, with tech stocks taking the lead.Furthermore, volume decreased, large cap stocks showed mixed movement, and foreign investors turned to sell, which indicated that the index would face selling pressure.The index approached the 1/2 Fibonacci resistance at 1,369 points before retreating, revealing the upward adjustment to be hindered by selling pressure. 

<ul><li>Although the baht depreciated, the SET rose for a second consecutive day, bolstered by two days of foreign investor buying and robust 1Q24 earnings.</li><li>This fueled increased buying momentum, particularly in energy, commerce, food, tourism, petrol and finance stocks.</li><li>Consequently, the index hit 1,362.53 points before retreating from profit taking.</li></ul>

Although the baht depreciated, the SET rose for a second consecutive day, bolstered by two days of foreign investor buying and robust 1Q24 earnings.This fueled increased buying momentum, particularly in energy, commerce, food, tourism, petrol and finance stocks.Consequently, the index hit 1,362.53 points before retreating from profit taking.

<ul>
<li>Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios</li>
<li>We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations</li>
<li>Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement</li>
</ul>


Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations
Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement


Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

Thailand

Krung Thai Bank Public Company Limited is a state-owned commercial bank offering various banking and financial services including commercial, consumer, credit card, and mortgage loans, as well as provident fund management, foreign exchange, and international trade financing services.  The Bank is majority owned by the Financial Institutions Development Fund.

Krung Thai Bank Pub (KTB TB)

Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts

Krung Thai is our preferred pick for its value for healthy return, solid capital ratio with Kasikornbank continuing to deliver on improving...

Victor Galliano

Thai Banks 4Q23 Screener; Stick with Krung Thai, Switch Out of Ayudhya into Kasikorn

Krung Thai has strong profitability, a healthy balance sheet and attractive valuations. Kasikorn's cost of risk has improved, hints at potentially...

Victor Galliano

Technical Analysis - APRIL 25, 2024

The SET fluctuated in a narrow range and closed up for a third day, but it was weaker than other Asian bourses, which surged sharply, with tech...

Krungthai XSpring

Technical Analysis - APRIL 24, 2024

Although the baht depreciated, the SET rose for a second consecutive day, bolstered by two days of foreign investor buying and robust 1Q24 earnings.

Krungthai XSpring

Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

Of the Thai banks, Krung Thai and Ayudhya have strong profitability and healthy balance sheets, with attractive PBV and PE ratios, while...

Victor Galliano

Thai Banks 1Q24 Screener; We Stick with Krung Thai for Best Value, Kasikorn for Positive Catalysts

​Krung Thai is our preferred pick for its value for healthy return, solid capital ratio with Kasikornbank continuing to deliver on improving...

Victor Galliano

Thai Banks 4Q23 Screener; Stick with Krung Thai, Switch Out of Ayudhya into Kasikorn

​Krung Thai has strong profitability, a healthy balance sheet and attractive valuations. Kasikorn's cost of risk has improved, hints at potentially...

Victor Galliano

Technical Analysis - APRIL 25, 2024

The SET fluctuated in a narrow range and closed up for a third day, but it was weaker than other Asian bourses, which surged sharply, with tech...

Krungthai XSpring

Technical Analysis - APRIL 24, 2024

Although the baht depreciated, the SET rose for a second consecutive day, bolstered by two days of foreign investor buying and robust 1Q24 earnings.

Krungthai XSpring

Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya

​Of the Thai banks, Krung Thai and Ayudhya have strong profitability and healthy balance sheets, with attractive PBV and PE ratios, while...

Victor Galliano

Krung Thai is our preferred pick for its value for healthy return, solid capital ratio with Kasikornbank continuing to deliver on improving...

Krung Thai has strong profitability, a healthy balance sheet and attractive valuations. Kasikorn's cost of risk has improved, hints at potentially...

Of the Thai banks, Krung Thai and Ayudhya have strong profitability and healthy balance sheets, with attractive PBV and PE ratios, while...