Date of Report
October 22, 2024
Broker Name
UOB Kay Hian
Company Overview
Kasikorn Bank (KBANK) is the fourth largest commercial bank in Thailand, holding a 14% share of the credit market. The bank emphasizes SME lending, which comprises 34% of its loan portfolio.
Stock Data
- Share Price: Bt151.50
- Target Price: Bt190.00
- Market Cap: Bt358,953.1 million (US$10,839.6 million)
- Shares Issued: 2,369.3 million
- 3-Month Average Daily Turnover: US$57.4 million
- GICS Sector: Financials
- Bloomberg Ticker: KBANK TB
Price Performance
- 52-Week High/Low: Bt159.00 / Bt118.50
- Performance Over Time:
- 1 Month: -3.5%
- 3 Months: +18.4%
- 6 Months: +22.2%
- 1 Year: +17.4%
- Year-to-Date: +12.2%
Financial Results
- 3Q24 Earnings: Bt12 billion (up 6% YoY, down 5% QoQ)
- Pre-Provision Operating Profit (PPOP): Flat YoY, down 5% QoQ
- NPL Ratio: 3.20% in 9M24, within the target of less than 3.25%
- Loan Growth: -2.28% in 9M24, compared to the target of 3-5%
- Credit Cost: Reported at 190 basis points in 9M24, within the target range of 175-195 basis points.
Financial Targets vs. Actual
- NIM: Remained at 3.66% (Target: 3.66%)
- Loan Growth Target: 3-5% (Actual: -2.28% YTD)
- Net Fee Income Growth Target: Mid to High-Single Digit (Actual: 4.98%)
- Cost to Income Ratio Target: Low to Mid-40s (Actual: 42.95%)
- NPL Ratio Target: < 3.25% (Actual: 3.20%)
Key Financials
- Net Interest Income (2023): Bt183,608 million
- Net Interest Income (2024F): Bt190,182 million
- Net Profit (2024F): Bt49,408 million
- EPS (2024F): Bt20.9
- PE Ratio (2024F): 7.3
- Dividend Yield (2024F): 5.4%
Outlook and Recommendations
- The bank maintains its 2024 financial targets, except for loan growth, which is being reassessed.
- Management anticipates another policy rate cut next year.
- KBANK is focused on cleaning its balance sheet and improving asset quality.
- The bank expects credit costs to normalize to 140-160 basis points in 2025.
- Analyst recommendation: Maintain BUY with an unchanged target price of Bt190.00, based on the Gordon Growth Model (cost of equity: 11%, long-term growth: 2%).
Environmental, Social, Governance (ESG)
- CG Report: 5
- SET ESG Rating: AAA
- Environmental Commitment: Targeting net zero emissions in operations by 2030.
- Social Responsibility: Focus on financial inclusion and customer data security.
- Governance: Adherence to strong corporate governance practices.
Key Risks
- Potential for policy rate cuts impacting net profit and net interest margin.
- Continuous focus on asset quality and strict lending policies to navigate economic uncertainties.
