Despite positive view to its business restructuring under SCBX and a spin-off Card X, huge loan base of Bt2.3tn could imply that group’s earnings will be mostly contributed by banking business in the next two to three years.
• Listing SCBX, a newly established holding company in place of SCB after the share swap will enhance potential growth outside the banking business.
• In the medium term, the spin-off credit card and personal loan businesses under SCBX will pave way for listing it on the SET in 2024.
• In short-term, we are optimistic about the SCBX deal, especially if it is approved at the Nov. 15 shareholder meeting, but this does not affect our earnings forecasts and target price.
• The JV with ADVANC under AISCB has no short-term benefit, but the collaboration could help expanding its customer base in the long run.
We reiterate our BUY rating with a target price at Bt124.50, 0.99xAVG PBV, 5-years trading average of Thailand banks. Our rating reflect our positive view toward its earnings recovery in 2021 and beyond.