In today’s briefing:
- Top Five Thai Banks in Our Chart Screener; Kasikorn Bank (KBANK TB) Is Top
- OSP: Expect 4Q21 Earnings to Recover QoQ
- TTW: Expect Profit from Equity Income to Support 2022 Earnings Growth
Top Five Thai Banks in Our Chart Screener; Kasikorn Bank (KBANK TB) Is Top
- These five value oriented Thai banks all have healthy credit quality, NPL coverage and sound capital adequacy ratios; in addition, encouraging cost of risk trends support the outlook for earnings
- Of these, we believe Kasikorn Bank screens well, with its attractive pre-provision and post-provision profitability versus peers, whilst trading on relatively undemanding multiples; we also highlight Bangkok Bank positively
- Of the other Thai banks, we think that TMBThanchart could be a potential “turn around” stock, especially if management can improve credit quality, driving down its cost of risk further
OSP: Expect 4Q21 Earnings to Recover QoQ
- We maintain BUY rating with target price at Bt36.50, based on 30xPE’22E, the three years average trading range.
- We expect OSP to post 4Q21 net profit of Bt801m (-6%YoY, +38%QoQ), a recovery from 3Q21, the lowest level since listed. QoQ improvement will be supported by recovering beverage sales
- We foresee 2022E earnings to hit record high at Bt3.6bn(+14%YoY)driven by 1) a solid revenue growth at +4.7%YoY from recovering sales in beverage sales in Thailand and new products launch
TTW: Expect Profit from Equity Income to Support 2022 Earnings Growth
- We expect 4Q21E net profit at Bt736m (+7%YoY, -21%QoQ), dropping QoQ due to lower equity income contribution from power plant business.
- Meanwhile, 4Q21 earnings from tap water business will reach 19 quarter low at Bt624m due to lower demand from both industrial customers and PWA.
- Revise down 2021-23 earnings slightly to reflect weaker demand for tap water.
Before it’s here, it’s on Smartkarma
