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 but have revised up the fair value slightly to Bt2.36 (from Bt2.23), based on a lower required rate of return of 10.1% (down from 10.8% previously), reflecting updated macroeconomic factors and new assumptions in our house view.</li><li>The valuation metrics suggest that the share price is fully valued, while the limited tactical upside is offset by strong long-term growth prospects.</li><li>We have a neutral view after meeting with management on the Opportunity Day event on May 29, 2024.</li></ul>

We maintain a Neutral rating but have revised up the fair value slightly to Bt2.36 (from Bt2.23), based on a lower required rate of return of 10.1% (down from 10.8% previously), reflecting updated macroeconomic factors and new assumptions in our house view.The valuation metrics suggest that the share price is fully valued, while the limited tactical upside is offset by strong long-term growth prospects.We have a neutral view after meeting with management on the Opportunity Day event on May 29, 2024.

Thani - Remains Cautious in Lending; Expect Recovery in 2H24E

<ul><li>THANI's 1Q24 earnings exceeded expectations by 52% thanks to a lower-than-anticipated provision, reflecting a stronger-than- expected recovery.</li><li>THANI reported a 1Q24 net profit of Bt343mn (-23.8% YoY, +112.7% QoQ), better than our estimate by 52%, as the provision was much lower than expected, while the cost-to-income ratio was higher than expected.</li><li>Net interest income decreased 12.3% YoY and 4.3% QoQ</li></ul>

THANI's 1Q24 earnings exceeded expectations by 52% thanks to a lower-than-anticipated provision, reflecting a stronger-than- expected recovery.THANI reported a 1Q24 net profit of Bt343mn (-23.8% YoY, +112.7% QoQ), better than our estimate by 52%, as the provision was much lower than expected, while the cost-to-income ratio was higher than expected.Net interest income decreased 12.3% YoY and 4.3% QoQ

Ratchthani Leasing - Upbeat 1Q24 Earnings Due to a Much Lower Provision

<ul><li>We recommend a Neutral rating with a fair value of Bt2.23, based on the earnings yield and a required rate of return of 10.8%.</li><li>Despite the strong LT earnings outlook with expected EPS growth at 18.2% p.a. in 2025-26E, the valuation looks rather unappealing, and the share price is fully valued in the short term.</li><li>Meanwhile, the tactical upside is very limited.</li></ul>

We recommend a Neutral rating with a fair value of Bt2.23, based on the earnings yield and a required rate of return of 10.8%.Despite the strong LT earnings outlook with expected EPS growth at 18.2% p.a. in 2025-26E, the valuation looks rather unappealing, and the share price is fully valued in the short term.Meanwhile, the tactical upside is very limited.

Ratchthani Leasing - Expect 1Q24E Earnings to Recover QoQ Due to Lower Credit Costs

<ul><li>The 4Q23 and 2023 earnings were 32% and 6% lower than expected, respectively, due to higher-than-expected ECL expenses in 4Q23.</li><li>Hence, our 2024-25E earnings forecasts are tilting toward downward risk.</li><li>The potential downward revision to our earnings projections and the impact of the stock dividend may weigh on the valuation in the next 12 months, posing downside risk to our current rating.</li></ul>

The 4Q23 and 2023 earnings were 32% and 6% lower than expected, respectively, due to higher-than-expected ECL expenses in 4Q23.Hence, our 2024-25E earnings forecasts are tilting toward downward risk.The potential downward revision to our earnings projections and the impact of the stock dividend may weigh on the valuation in the next 12 months, posing downside risk to our current rating.

Thani - Downbeat 4Q23 Earnings Due to Higher-Than-Expected ECL

Thailand

Ratchthani Leasing Public Company Limited provides hire-purchase and leasing services for used automobiles to businesses and retail consumers in Thailand.

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Ratchthani Leasing (THANI TB)

Thani - Remains Cautious in Lending; Expect Recovery in 2H24E

The valuation metrics suggest that the share price is fully valued, while the limited tactical upside is offset by strong long-term growth prospects.

Krungthai XSpring

Ratchthani Leasing - Upbeat 1Q24 Earnings Due to a Much Lower Provision

THANI's 1Q24 earnings exceeded expectations by 52% thanks to a lower-than-anticipated provision, reflecting a stronger-than- expected recovery.

Krungthai XSpring

Ratchthani Leasing - Expect 1Q24E Earnings to Recover QoQ Due to Lower Credit Costs

Despite the strong LT earnings outlook with expected EPS growth at 18.2% p.a. in 2025-26E, the valuation looks rather unappealing, and the share...

Krungthai XSpring

Thani - Downbeat 4Q23 Earnings Due to Higher-Than-Expected ECL

The 4Q23 and 2023 earnings were 32% and 6% lower than expected, respectively, due to higher-than-expected ECL expenses in 4Q23.

Krungthai XSpring

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