In today’s briefing:
- SCB: Recovery Slowdown on a Rise in Economic Uncertainty
- ASIAN: Expect 1Q22 Earnings to Modestly Drop QoQ
- BBL: Growth Momentum Intact
- KTB: Attractive Valuation and Potential Credit Cost Reduction
- KBANK: Concentration on Debt Restructuring Ahead
- KKP: High Dividend and Growth Stock
SCB: Recovery Slowdown on a Rise in Economic Uncertainty
- Maintain BUY with a new target price of Bt139 (from Bt149) due to a net profit downgrade. Our valuation is derived from the Gordon Growth Model (ROE 9%, growth 2%)
- Management had more cautious views on potential impacts from higher inflation and the Russia-Ukraine war.
- Net profit in 1Q22 came in line with our expectations at Bt10.2bn (+1% YoY, +29% QoQ).
ASIAN: Expect 1Q22 Earnings to Modestly Drop QoQ
- Maintain BUY rating with a TP of B23.00 based on 16xPE’22E, which is close to +1SD of its five-years average trading.Our rating is premised on positive pet food growth outlook
- We expect 1Q22E earnings to come in at Bt250m (+16%YoY,-6%QoQ), soften QoQ on the back of weak margin outlook from surging raw material costs.
- We foresee earnings visibility to pick up in 2Q22 onwards, driven by stronger pet food revenue thanks to new capacity and margin improvement given easing cost pressures.
BBL: Growth Momentum Intact
- Maintain our BUY call with a target price of Bt162.Our BUY call reflects steady earnings growth, resilient balance sheet,and undemanding valuation. Our valuation is derived from the Gordon Growth Model
- Net profit in 1Q22 came in at Bt7.1bn, up 3% YoY(+13% QoQ)and 9% lower than expectations on lower gain from financial instruments designed at fair value through profit or loss.
- Asset quality was resilient. The NPL ratio minimally increased to 3.3% and the coverage ratio remained high at 229% against uncertainty.
KTB: Attractive Valuation and Potential Credit Cost Reduction
- Upgrade BUY with a target price of Bt15.00. Our upgrade reflects an attractive upside gain,resilient asset quality,and potential credit costs reduction. Our valuation is derived from the Gordon growth model
- Net profit in 1Q22 came in at Bt8.8bn (+57% YoY, +78% QoQ) and 37% higher than our expectation on lower-than-expected provisions.
- Asset quality improved. The NPL ratio decreased to 3.3% in 1Q22 and the loan loss coverage ratio was higher to 173.6% to withstand uncertainty ahead.
KBANK: Concentration on Debt Restructuring Ahead
- Reiterate our BUY rating with a target price of Bt174. Our BUY call reflects (1) steady growth ahead from improving economic recovery; (2) adequate reserves against new NPLs
- Management maintained 2022 financial guidance despite a GDP downgrade. It would likely concentrate on implementing comprehensive debt restructuring to improve the balance sheet.
- Net profit in 1Q22 came in line with our expectations at Bt11.2bn (+5% YoY, +13% QoQ).
KKP: High Dividend and Growth Stock
- Maintain our BUY call with a higher target price of Bt82 (from Bt79). Our BUY call reflects steady earnings growth, a resilient balance sheet, and attractive dividend payment.
- Management was optimistic about lending growth and loan quality due to the economic reopening.
- Net profit in 1Q22 came in at Bt2.05bn (+41% YoY, +1% QoQ) and 15% higher than our expectation.
Before it’s here, it’s on Smartkarma
