First Read: Kasikornbank "Q226A: profit beat from non-NII, manageable NPL..."

研报英文原文证据摘录

First Read: Kasikornbank "Q226A: profit beat from non-NII, manageable NPL..."

Forecast returns

Forecast price appreciation -8.4%

Forecast dividend yield 5.0%

Forecast stock return -3.4%

Market return assumption 7.2%

Forecast excess return -10.5%

Company Description

Kasikornbank conducts commercial banking, securities and other related businesses,

primarily providing financial services via an extensive branch network nationwide. The bank

has 886 branches and 10,973 self-service channels to help customers conduct transactions

on their own, as well as 16 establishments in eight countries, with operations and services

centralised at the head office. The bank was established in 1945 by the Lamsam family, whose

shareholding was diluted after the 1997 Asian financial crisis. Bantoon Lamsam had served as

CEO and chairman for decades until he stepped down in 2020.

Valuation Method and Risk Statement

We derive our price target from a P/BV multiple.

Upside risks include: 1) high-growth consumer loans and other fintech subsidiaries could

create mid-term profit and ROE upside; 2) increasing fiscal stimulus to improve asset quality

more than expected; and 3) an insurance underwriting margin recovery on rising bond/

interest rates.

Downside risks include: 1) SME/retail-exposed portfolios' vulnerability to structural household

debt issues and cost-push inflation; and 2) the inability to control NPLs arising from high-yield

loan strategy and an end to the BoT's lenient option for COVID debt restructuring

programme.

Industry upside/downside risks include: 1) new regulations to welcome fintech entrants

through licensing by the BoT (ie, virtual banking licences, P2P) and the Securities and

Exchange Commission (ie, crowd funding), which would threaten the customer/loan/deposit