First Read Bangkok Commercial Asset Management: Weak recovery in Q226E, cut PT to Bt5.7

研报英文原文证据摘录

First Read Bangkok Commercial Asset Management: Weak recovery in Q226E, cut PT to Bt5.7

Forecast returns

Forecast price appreciation -16.8%

Forecast dividend yield 6.5%

Forecast stock return -10.2%

Market return assumption 7.2%

Forecast excess return -17.4%

Company Description

Bangkok Commercial Asset Management (BAM) was founded on 14 Aug 1998 under the

MoF's Financial Institutional Development plan to acquire and manage non-performing

assets from Bangkok Bank of Commerce and other FIs under the Financial Institution Asset

Management Corporation Decree. A merger in 2005 enhanced business scale and efficiency,

leading BAM to become a public company in 2015. Its core business is credit for the purchase

of receivables and foreclosed properties. BAM utilises capital and borrowed funds to acquire

assets during economic downcycles and turns them to high-margin income in upcycles.

Valuation Method and Risk Statement

We use P/BV methodology to derive our price target for BAM, reflecting 2024-26E

sustainable profitability due to: its highly volatile short-term profit growth profile pre/post

COVID, interest rate hikes, and its adoption of IFRS9 standards. Our valuation implies 0.5x 12-

months forward P/BV based on 5.0% medium-term ROE and 7.4% COE.

Key upside risks include: 1) a stronger-than-expected economic recovery after new

government formation, which could help NPL/NPA gains and ROE to recover in 2024; 2) an

interest rate downcycle, which could support debt servicing ability and a decline in credit cost.

Key downside risks include: 1) slower than expected revenue contribution from JVAMC; 2)

prolonged sluggish demand on residential property sector and stubbornly high household

debt could lower NPA margin over time.