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>We are positive on Bank Ayudhya; it ranks top in terms of pre-provision and second in post-provision profitability, as well as screening well on credit quality metrics and valuations</li>
<li>We also like TMBThanchart, with its further improvement in 3Q22 cost of risk and incrementally better pre-provision returns</li>
<li>Krung Thai remains attractive on valuations and on our returns and credit quality screens, but is, in our view, less compelling than Ayudhya and TMBThanchart</li>
</ul>


We are positive on Bank Ayudhya; it ranks top in terms of pre-provision and second in post-provision profitability, as well as screening well on credit quality metrics and valuations
We also like TMBThanchart, with its further improvement in 3Q22 cost of risk and incrementally better pre-provision returns
Krung Thai remains attractive on valuations and on our returns and credit quality screens, but is, in our view, less compelling than Ayudhya and TMBThanchart


Thai Banks 3Q22 Screener; Bank Ayudhya Stands Out

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 for TTB with a target price of Bt1.60. TTB reported strong 3Q22 results with a 58% YoY rise (+8% QoQ) and 15% higher than expected.</li>
<li>Analyst meeting The bank would gain benefits from the interest rate upcycle. Its net interest margin (NIM) was likely to further expand</li>
<li>Despite potential benefits from the rate hikes,the bank was worried that some customers might have difficulties repaying debts.The bank would normalize to pay the FIDF fees of 46bp in 2023 </li>
</ul>


Maintain BUY for TTB with a target price of Bt1.60. TTB reported strong 3Q22 results with a 58% YoY rise (+8% QoQ) and 15% higher than expected.
Analyst meeting The bank would gain benefits from the interest rate upcycle. Its net interest margin (NIM) was likely to further expand
Despite potential benefits from the rate hikes,the bank was worried that some customers might have difficulties repaying debts.The bank would normalize to pay the FIDF fees of 46bp in 2023 


<ul>
<li>The six Thai banks that we cover all have relatively healthy credit quality, NPL coverage and sound capital adequacy ratios; also, positive cost of risk trends support the earnings outlook</li>
<li>Of these, Krung Thai Bank stands out, with its low cost of risk, healthy post-provision profitability versus peers and its undemanding valuation multiples along with its low PEG ratio</li>
<li>TMBThanchart is one to watch in the deep value category, especially given its attractive cost of risk trends to 2Q22</li>
</ul>


The six Thai banks that we cover all have relatively healthy credit quality, NPL coverage and sound capital adequacy ratios; also, positive cost of risk trends support the earnings outlook
Of these, Krung Thai Bank stands out, with its low cost of risk, healthy post-provision profitability versus peers and its undemanding valuation multiples along with its low PEG ratio
TMBThanchart is one to watch in the deep value category, especially given its attractive cost of risk trends to 2Q22


Thai Banks 2Q22 Screener; Krung Thai Stands Out

<ul>
<li>Maintain BUY for TTB with a target price of Bt1.60. TTB reported strong 2Q22 results with a 36% YoY rise (+8% QoQ) and 20% higher than expected.Asset quality was resilient </li>
<li>2Q22 results TTB’s net profit came in at Bt3.4bn in 2Q22, up 36% YoY (+8% QoQ), which was 20% higher than expected on lower provisions. Despite lackluster net interest income</li>
<li>Loans turned into a positive growth of 1.9% QoQ in 2Q22 (1Q22: -0.5%) given elevated demand from corporate and retail loans (auto HP and mortgage lending). Asset quality improved.</li>
</ul>


Maintain BUY for TTB with a target price of Bt1.60. TTB reported strong 2Q22 results with a 36% YoY rise (+8% QoQ) and 20% higher than expected.Asset quality was resilient 
2Q22 results TTB’s net profit came in at Bt3.4bn in 2Q22, up 36% YoY (+8% QoQ), which was 20% higher than expected on lower provisions. Despite lackluster net interest income
Loans turned into a positive growth of 1.9% QoQ in 2Q22 (1Q22: -0.5%) given elevated demand from corporate and retail loans (auto HP and mortgage lending). Asset quality improved.


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>This smaller Thai bank can more easily grow due to relatively small loan base</li>
<li>Strong core fundamentals of rising interest income and falling funding costs</li>
<li>Credit costs remain inflated, falling figures can support strong ROA growth</li>
</ul>


This smaller Thai bank can more easily grow due to relatively small loan base
Strong core fundamentals of rising interest income and falling funding costs
Credit costs remain inflated, falling figures can support strong ROA growth


Thailand

TMBThanachart Bank Public Company Limited provides a full range of banking and financial services. The Bank offers corporate and personal lending, retail and wholesale banking, international trade financing, and investment banking services to its customers throughout Thailand.  It also has branches in Hong Kong, Laos, and Cayman Island.

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TMBThanachart Bank (TTB TB)

Thai Banks 3Q22 Screener; Bank Ayudhya Stands Out

Of the Thai banks, Bank Ayudhya screens best on a blend of returns, credit quality & valuations; TMB Thanachart returns are improving and Krung...

Victor Galliano

TTB : Focus on Quality of Growth

Maintain BUY for TTB with a target price of Bt1.60. TTB reported strong 3Q22 results with a 58% YoY rise (+8% QoQ) and 15% higher than expected. To...

Pi Securities PCL, Thailand

Thai Banks 2Q22 Screener; Krung Thai Stands Out

Thai Banks 2Q22 screener highlights Krung Thai; it trades on undemanding valuations and a low PEG whilst its fundamentals show its has its low cost...

Victor Galliano

TTB : Time to Start an Engine

Maintain BUY for TTB with a target price of Bt1.60. TTB reported strong 2Q22 results with a 36% YoY rise (+8% QoQ) and 20% higher than expected....

Pi Securities PCL, Thailand

KKP - Small Enough To Grow

KKP remains well smaller than all the largest Thai banks, so can more easily grow. This is coming through in far better loan growth figures, even...

Daniel Tabbush

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