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 12M FV of Bt150.00, based on the earnings yield method and a required return of 16.6%.</li><li>The valuation metrics indicate that the stock is fully valued in the short term, while the long-term performance is expected to grow at a moderate level, alongside the tactical risk remaining neutral</li><li>KBANK reported a net profit of Bt11.9bn for 3Q24, up 6% YoY but down 5% QoQ, in line with both our and the market expectations.</li></ul>

We maintain a Neutral rating with a 12M FV of Bt150.00, based on the earnings yield method and a required return of 16.6%.The valuation metrics indicate that the stock is fully valued in the short term, while the long-term performance is expected to grow at a moderate level, alongside the tactical risk remaining neutralKBANK reported a net profit of Bt11.9bn for 3Q24, up 6% YoY but down 5% QoQ, in line with both our and the market expectations.

Kasikornbank - In-Line 3Q24 Earnings; Balance Sheet Cleanup Expected to Be Completed in 2024E

<ul><li>We maintain an Outperform rating, with a new fair value of Bt148.87 (from Bt142.37) after adjusting the macroeconomic variables according to our house view assumptions.</li><li>The valuation metrics indicate that the stock is undervalued in terms of the fundamentals (with 16.3% upside vs. the current price), which is offset by the moderate profit growth trend and the neutral tactical view.</li><li>KBANK’s 2Q24 net profit beat our forecast by 5% at Bt12.6bn, up 15.1% YoY but down 6.1% QoQ, given higher-than-expected non- interest income.</li></ul>

We maintain an Outperform rating, with a new fair value of Bt148.87 (from Bt142.37) after adjusting the macroeconomic variables according to our house view assumptions.The valuation metrics indicate that the stock is undervalued in terms of the fundamentals (with 16.3% upside vs. the current price), which is offset by the moderate profit growth trend and the neutral tactical view.KBANK’s 2Q24 net profit beat our forecast by 5% at Bt12.6bn, up 15.1% YoY but down 6.1% QoQ, given higher-than-expected non- interest income.

Kasikornbank - 2Q24 NP Beat Forecast by 5%; Stable Asset Quality

<ul><li>We maintain an Outperform rating, based on the earnings yield method, with a required rate of return of 14.4%.</li><li>The valuation metrics indicate potential upside of 13.4% to the fair price.</li><li>The normalization of credit costs will continue to support earnings growth; KBANK's EPS is expected to show a CAGR of 9.5% in 2024- 26E. </li></ul>

We maintain an Outperform rating, based on the earnings yield method, with a required rate of return of 14.4%.The valuation metrics indicate potential upside of 13.4% to the fair price.The normalization of credit costs will continue to support earnings growth; KBANK's EPS is expected to show a CAGR of 9.5% in 2024- 26E. 

Kasikornbank - 2Q24E Net Profit Growth YoY and QoQ

<ul><li>We initiate our coverage on KBANK with an Outperform rating and a 12M FV of Bt142.37, based on the earnings yield and a required return of 14.4%.</li><li>The valuation metrics suggest that the current share price implies 14.4% potential upside to the fair value.</li><li>The normalization of credit costs will boost the EPS growth for KBANK to an expected CAGR of 9.5% in 2024-2026E. Meanwhile, the tactical risk is neutral</li></ul>

We initiate our coverage on KBANK with an Outperform rating and a 12M FV of Bt142.37, based on the earnings yield and a required return of 14.4%.The valuation metrics suggest that the current share price implies 14.4% potential upside to the fair value.The normalization of credit costs will boost the EPS growth for KBANK to an expected CAGR of 9.5% in 2024-2026E. Meanwhile, the tactical risk is neutral

Kasikornbank - On the Way to Normalized Credit Costs

Thematic (Sector/Industry)

<ul><li>Although the market is likely to revise down EPS estimates following weaker-than- expected 3Q24 earnings, using the KTX implied EPS tool, we find that most sectors (accounting for over 80% of total market capitalization) have partially priced in the negative factors, which limits the downside risk.</li><li>In addition, the SET Index's correction of -0.8% (since the 3Q24 earnings announcements) has kept the market risk premium (MRP) stable at 4.213%, matching the lower bound of the trading buy range at an MRP of 4.21% (-1 S.D.).</li><li>This suggests that the SET is at a level where the risk-reward appears attractive. </li></ul>

Although the market is likely to revise down EPS estimates following weaker-than- expected 3Q24 earnings, using the KTX implied EPS tool, we find that most sectors (accounting for over 80% of total market capitalization) have partially priced in the negative factors, which limits the downside risk.In addition, the SET Index's correction of -0.8% (since the 3Q24 earnings announcements) has kept the market risk premium (MRP) stable at 4.213%, matching the lower bound of the trading buy range at an MRP of 4.21% (-1 S.D.).This suggests that the SET is at a level where the risk-reward appears attractive. 

Special Report: Investment Strategy Post-3Q24 Earnings Reports - NOVEMBER 21, 2024

Thailand

Kasikornbank Public Company Limited provides commercial banking services including personal and commercial banking, international trade, as well as investment banking services, to its customers throughout Thailand.  The Bank has foreign branches in Los Angeles, Hong Kong, Cayman Islands, and Shenzhen; and representative offices in Shanghai, Beijing, and Kunmin.

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Kasikornbank (KBANK/F TB)

Kasikornbank - In-Line 3Q24 Earnings; Balance Sheet Cleanup Expected to Be Completed in 2024E

We maintain a Neutral rating with a 12M FV of Bt150.00, based on the earnings yield method and a required return of 16.6%.

Krungthai XSpring

Kasikornbank - 2Q24 NP Beat Forecast by 5%; Stable Asset Quality

KBANK’s 2Q24 net profit beat our forecast by 5% at Bt12.6bn, up 15.1% YoY but down 6.1% QoQ, given higher-than-expected non- interest income.

Krungthai XSpring

Kasikornbank - 2Q24E Net Profit Growth YoY and QoQ

We maintain an Outperform rating, based on the earnings yield method, with a required rate of return of 14.4%. The valuation metrics indicate...

Krungthai XSpring

Kasikornbank - On the Way to Normalized Credit Costs

We initiate our coverage on KBANK with an Outperform rating and a 12M FV of Bt142.37, based on the earnings yield and a required return of 14.4%.

Krungthai XSpring

Special Report: Investment Strategy Post-3Q24 Earnings Reports - NOVEMBER 21, 2024

Listed companies reported a combined net profit (SET EPS) of Bt208bn in 3Q24, which was approximately 8.5% below the consensus estimate.

Krungthai XSpring

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