Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*KTB Better Results On Improving Credit Deltas: Krung Thai Bank (KTB.TB)[KTB] reported 4Q20 net profit of THB 3.5 bn, increasing THB 396 mn (13.0%) linked quarter. Despite the THB 3.2 bn (25.5%) linked quarter reduction in loss provisions, operating results actually exhibited a decline of THB 262 mn (9.0%); and*Credit Should Continue To Drive Performance: KTB’s hard work controlling credit risk is paying off, as net new NPLs increased just THB 707 mn for an annualized rate of growth of 2.6% - the lowest of the Thai banks under coverage. Provided there are no major “unknown unknowns” in the moratorium portfolio from here, we would envision KTB to at least cutting its loss provision in half from here.

*KTB Better Results On Improving Credit Deltas: Krung Thai Bank (KTB.TB)[KTB] reported 4Q20 net profit of THB 3.5 bn, increasing THB 396 mn (13.0%) linked quarter. Despite the THB 3.2 bn (25.5%) linked quarter reduction in loss provisions, operating results actually exhibited a decline of THB 262 mn (9.0%); and*Credit Should Continue To Drive Performance: KTB’s hard work controlling credit risk is paying off, as net new NPLs increased just THB 707 mn for an annualized rate of growth of 2.6% - the lowest of the Thai banks under coverage. Provided there are no major “unknown unknowns” in the moratorium portfolio from here, we would envision KTB to at least cutting its loss provision in half from here. 

Krung Thai Bank – Lower Credit Tail Risk

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Equity Capital Markets

KTB Securities Thailand PCL / Equity Capital Markets

KTB Securities, a small broker primarily owned by a Korean firm with the same name, is launching its IPO sometime this year, and we do have a few acquaintances here in their executive ranks. Some key points:<ul>
<li>
Valuation. We've valued the stock at Bt23/sh, using DDM. To be honest, almost 90% of the value is in their huge net cash balance of Bt1.34bn rather than the business itself.</li>
<li>
Management. The CEO and second largest shareholder, Dr. Win, has considerable experience in asset management and is still relatively young. The much older heads of institutional sales and research are veterans of the broking industry. The Koreans control the board as Chairman, but the majority of the day-to-day operations are handled by local executives.</li>
<li>
Business. Commissions have fallen from 72% to 50% of revenues in just three years, but still remains the biggest component. Fortunately, the firm is gradually generating more revenue from other businesses, such as wealth management, asset management, and underwriting.</li>
<li>
Staff retention is one of the five key risks (along with regulatory and credit risk) highlighted by the underwriter Asset Pro, but at 18-20%, this is not super high by the standards of the industry in Thailand.</li>
</ul>Lastly, we should mention that the firm is not related to the state-owned Thai bank with almost identical name, and that management has indicated that the IPO could come sometime in Q2'19.

KTB Securities, a small broker primarily owned by a Korean firm with the same name, is launching its IPO sometime this year, and we do have a few acquaintances here in their executive ranks. Some key points:

Valuation. We've valued the stock at Bt23/sh, using DDM. To be honest, almost 90% of the value is in their huge net cash balance of Bt1.34bn rather than the business itself.

Management. The CEO and second largest shareholder, Dr. Win, has considerable experience in asset management and is still relatively young. The much older heads of institutional sales and research are veterans of the broking industry. The Koreans control the board as Chairman, but the majority of the day-to-day operations are handled by local executives.

Business. Commissions have fallen from 72% to 50% of revenues in just three years, but still remains the biggest component. Fortunately, the firm is gradually generating more revenue from other businesses, such as wealth management, asset management, and underwriting.

Staff retention is one of the five key risks (along with regulatory and credit risk) highlighted by the underwriter Asset Pro, but at 18-20%, this is not super high by the standards of the industry in Thailand.
Lastly, we should mention that the firm is not related to the state-owned Thai bank with almost identical name, and that management has indicated that the IPO could come sometime in Q2'19.

IPO Radar: KTB Securities, the Only Korean Broker in Thailand

Thailand

KTB Securities (Thailand) PCL provides securities brokerage services. The Company offers securities and derivatives trading, investment banking, commodity brokerage, underwriting, mutual funds, wealth management, and advisory services to investors. KTB Securities (Thailand) serves customers worldwide.

KTB Securities Thailand PCL (2675411Z TB)

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KTB Securities Thailand PCL (2675411Z TB)

Krung Thai Bank – Lower Credit Tail Risk

KRUNG THAI BANK: KTB reported a 4Q20 net profit increase of 13.0% linked quarter. KTB’s hard work controlling credit risk is paying off, as net new...

Thomas J. Monaco

IPO Radar: KTB Securities, the Only Korean Broker in Thailand

KTB Securities, a small broker primarily owned by a Korean firm with the same name, is launching its IPO sometime this year, and we do have a few...

Athaporn Arayasantiparb, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)