J.P. 摩根-亚太地区-金融行业-泰国金融业：经典的“以合理价格增长”投资-2019.3.13-170页.pdf

Asia Pacific Equity Research13 March 2019 Thailand FinancialsA classic growth at a reasonable price investmentThailand BanksHarsh Wardhan Modi AC(65)6882-Bloomberg JPMA MODI J.P.Morgan Securities Singapore Private Limited/J.P.Morgan Securities(Asia Pacific)LimitedJidapa Chirawattanakarn(66-2)684-JPMorgan Securities(Thailand)LimitedGaurav Khandelwal(91-22)6157 J.P.Morgan India Private LimitedAnurag Rajat,CFA(65)6882 J.P.Morgan Securities Singapore Private Limited/J.P.Morgan Securities(Asia Pacific)LimitedSee page 168 for analyst certification and important disclosures,including non-US analyst disclosures.J.P.Morgan does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor inmaking their investment We assume coverage of Thailand financials with a positive view despite many challenges.The key reason to own the sector is a marked step up in EPSg(10%in 2019-20),while multiples are reasonable at 10.4/1.11x P/E/P/B in our view.Credit costs are coming off from cyclical peaks,further aided by FRS9.NIM appears to have bottomed,with an underappreciated CASA strength.These provide earnings visibility.The wait for capex revival has been torturous,but it stays a potential catalyst.Fee,regulation and digital risks are known,and will likely intensify we believe.We reflect these in our stock picks.We initiate on SAWAD with OW,upgrade Tisco to OW,maintain OW on KTB and BBL,while downgrading KBank to N and SCB to UW.Earnings are scarce across Asia banks,with nine out of 10 banking sectors delivering sub-10%EPSg.Thailand financials offer 10%EPSg this and next year while trading at 10.4x P/E,offering growth and relative value.Credit cost driven earnings is,by definition,cyclical.Hence,technically,these earnings do not deserve high multiples.Yet,2019/20 provisions of 116/101bps are coming off highs and will likely undershoot through-the-cycle averages.Thus,the inflection in EPS revisions for the sector is here to stay.Further,Thai banks offer 4.9%dividend yield and a hedge against risk of a sharp dollar rally.Re-rating depends on PPoP growth.Our investment case is based on EPSg,rather than on re-rating.PPoP gr is muted at 3%for 2019-20.Challenges to operating profit gr include low credit demand(limited capex progress),NIM stagnation(limited policy rate transmission),fee income decline(migration to PromptPay continues),and cost pressures(digital investments).Out of these,a pick-up in infrastructure investments and loan yield hike post elections are more likely than the rest.Further,higher trade(50%exports/GDP)can lead to cyclical revival in corporate capex.These pose upside risks to our forecasts.M&A is likely and a risk to large banks.Equity and liquidity are ample in this banking system(13%E/A and 1.4%BoP surplus),while credit gr is limited.This,along with payout reluctance at large banks has likely lowered RoI hurdle rate for a deal.This is positive for smaller banks as possible targets but increases the risk of value eroding deal from large banks.On the flip side,anincrease in payout will partly address the risk,reflecting in higher multiples.What could go wrong?Inventory build-up was high in last 6M.This couldderail AQ recovery,if it continues.Even after coming off 20bps in last 3Y,non-interest income as a percentage of assets for Thai banks is higher than Asian average.This suggests risk of further correction.The large banks have high CASA ratio.This is a cyclical positive,if rates move up.But structurally,CASA advantage is at risk of being undermined by digital advances,especially PromptPay and E-KYC.Moreover,search for yield has led to a shift toward higher-risk loans.Banks contend that use of digital channels will reduce costs,as well as control credit risk,especially in high-touch segments like retail and SME.This is yet to be tested.AxJ Banks:P/E vs.EPS CAGRSource:Bloomberg,J.P.Morgan.Note:Based on 12M fwd PE and 2018-20E EPS CAGR.Note:Thailand excludes Sawad.SGIDPHMYTHINKRCHTWHK3%5%7%9%11%13%15%3.0 8.0 13.0 18.0EPS CAGR(18-20E)2019E PE(x)2Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- Table of ContentsValuation and DuPont.3Growth at Reasonable Price.4Thailand Banks compare well on EPSg.7PPoP growth is tough;so is re-rating.12PromptPay.13M&A-good for some,not for all.14Drivers for M&A.14What can go right?.19Fiscal room creates upside risk.19External demand and private capex.23FRS9 led clean-up could support higher payout.26Policy rate transmission.28Domestic portfolio rotation.29What could go wrong?.30Slowing external demand partly offset by fiscal space.30Fee income pressure.32Potential threat to deposit franchise.33Foreign holding limits.35Industry&Macro details.37Banking system.37National Credit Bureau.43Macro Outlook.45Liquidity&Growth.46Credit/GDP.49Companies.51Kasikornbank PCL.52Siam Commercial Bank.71Bangkok Bank.91Krung Thai Bank.113Tisco Financial Group PCL.134Srisawad Corporation PCL.1513Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- Valuation and DuPontTable 1:Thailand Banks&Financial Companies:ValuationTickerPTRatingPriceMCap12M ADTPE(x)PB(x)Div Yields(%)ROE(%)ROA(%)(Bt)(Bt)US$mnUS$mn2019E2020E2019E2020E2019E2020E2019E2020E2019E2020EBBL TB225.00OW207.0012,47327.069.99.00.900.853.94.39.39.71.251.32KBANK TB215.00N192.5014,54345.8811.19.91.151.072.93.110.711.21.291.38SCB TB120.00UW130.5013,98831.7210.99.51.111.044.65.010.411.31.241.35KTB TB22.00OW18.908,33918.798.78.00.820.774.85.39.710.01.091.13TISCO TB100.00OW88.502,23710.659.39.31.801.758.59.019.819.12.522.49SAWAD TB60.00OW49.001,86413.1315.112.63.242.580.00.025.422.88.377.99TMB TBNANR2.243,10114.1110.99.60.940.883.13.39.19.61.011.07TCAP TBNANR54.751,9805.058.67.90.900.844.44.711.111.00.950.95BAY TBNANC38.258,8820.4110.49.51.081.002.93.110.710.81.261.29THANI TBNANC6.007152.0912.111.02.712.363.74.024.222.63.773.67MTC TBNANC43.502,91114.3518.915.05.644.290.91.234.732.48.828.42KTC TBNANC31.252,54320.9013.412.24.063.332.93.231.828.97.107.26AEONTS TBNANC181.501,4322.9412.410.92.482.152.73.121.121.14.264.40Big 410.29.10.990.944.04.410.010.51.221.29JPM Coverage10.89.71.501.344.14.514.214.02.632.61Sector11.510.32.061.763.53.817.417.03.303.29Source:Bloomberg,J.P.Morgan.Note:Priced as of 11 March,2019.Note:Not covered/rated company estimates based on Bloomberg consensus.Table 2:Thailand Banks:Industry DuPontThailand201420152016201720182019E2020E2021ENIM 3.01 3.09 3.29 3.30 3.26 3.34 3.32 3.31 IEA/Assets 95.1 95.8 95.8 95.3 96.7 98.0 97.9 98.4 NII/Assets 2.86 2.96 3.15 3.14 3.16 3.29 3.26 3.27 Non-II/Assets 1.69 1.91 1.80 1.77 1.70 1.57 1.56 1.58 Rev/Assets 4.55 4.87 4.95 4.91 4.86 4.86 4.82 4.84 Costs/Assets 1.89 1.98 2.05 2.07 2.16 2.19 2.21 2.21 Costs/Income 41.8 40.8 41.8 42.1 44.6 45.2 45.9 45.6 Opt Profits/Assets 2.66 2.89 2.90 2.85 2.70 2.67 2.61 2.63 Credit Costs 0.91 1.55 1.49 1.68 1.28 1.09 0.91 0.84 Loans/Assets 69.5 70.5 69.3 69.2 69.7 71.1 70.7 70.8 RoA 1.58 1.40 1.45 1.33 1.41 1.48 1.53 1.58 Assets/Equity 10.8 9.9 9.1 8.7 8.4 8.2 8.1 8.0 RoE 16.8 13.6 13.2 11.5 11.8 12.0 12.3 12.5 Source:Company data,J.P.Morgan.Note:Data based on banks under JPMe coverage ex Sawad.4Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- Growth at a Reasonable PriceWe assume coverage of Thailand financials with a positive view despite many challenges.The key reason to own the sector is a marked step up in EPSg(10%in 2019-20),while multiples are reasonable at 10.4/1.11x P/E/P/B we think.Credit costs are coming off from cyclical peaks,further aided by FRS9.NIM appears to have bottomed,with an underappreciated CASA strength.These provide earnings visibility.The wait for capex revival has been torturous,but it stays a potential catalyst.Fee,regulation and digital risks are known,and will intensify we believe.We reflect these in our stock picks.We initiate on Sawad with OW,upgrade Tisco to OW,maintain OW on KTB and BBL,while downgrading KBank to N and SCB to UW.Figure 1:Thailand Banks:EPS growth(%,y/y)Source:Company reports,J.P.Morgan.Note:Data includes JPM coverage universe(ex-SAWAD).Table 3:Thailand Banks&FIs:EPS growth(last 5Y vs next 3Y)Last 5Y CAGR(13-18)Next 3Y CAGR(18-21E)BBL0%11%KBANK-1%10%SCB-4%10%KTB-3%6%TISCO10%4%SAWAD25%24%JPM Coverage4%11%Large Banks(Big 4)-2%9%Source:Company data,J.P.Morgan.Table 4:EPS:JPM vs StreetBankPTRatingPriceJPMeStreetJPMe vs Street(Bt)(Bt)2019E2020E2021E2019E2020E2021E2019E2020E2021EBBL225.00 OW207.00 20.823.025.320.322.625.132%2%1%KBANK215.00 N192.50 17.419.421.617.219.422.041%0%-2%SCB 120.00 UW130.50 12.013.715.612.413.715.10-3%0%3%KTB 22.00 OW 18.90 2.22.42.42.12.32.603%2%-7%TISCO100.00 OW 88.50 9.59.59.99.09.710.346%-2%-4%SAWAD 60.00 OW 49.00 3.33.94.62.93.54.2311%10%9%Sector3%2%0%Source:Bloomberg,J.P.Morgan.Note:Priced as of 11thMarch,2019.-20%-10%0%10%20%30%201120122013201420152016201720182019E2020E2021E10%EPS CAGR at TH banks5Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- The valuation ranges for Thailand banks suggest meaningful margin for safety.The stocks are broadly at the lower end of P/B ranges and at the mid of P/E ranges.In this context,we are calling more for EPS growth driven stock price momentum;rather than re-rating.Value is available across Asean,but EPSg is not as clear as in TH in our viewFigure 2:Thailand:10Y PB range charts NormalizedSource:Bloomberg,J.P.Morgan.Figure 3:Thailand:10Y PE range charts-NormalizedSource:Bloomberg,J.P.Morgan.Figure 4:Thailand:10Y P/B range charts AbsoluteSource:Bloomberg,J.P.Morgan.Figure 5:Thailand:10Y P/E range charts AbsoluteSource:Bloomberg,J.P.Morgan.Figure 6:ASEAN:10Y P/B range chartsSource:Bloomberg,J.P.Morgan.Note:TH is ex-SAWADFigure 7:ASEAN:10Y P/E range chartsSource:Bloomberg,J.P.Morgan.Note:TH is ex-SAWAD.23%21%6%27%74%12%0%25%50%75%100%BBLKBANKSCBKTBTISCOSAWAD61%61%40%56%83%21%0%25%50%75%100%BBLKBANKSCBKTBTISCOSAWAD0.50.70.91.11.31.51.71.92.12.32.5BBLKBANKSCBKTBTISCOCurrent4.06.08.010.012.014.016.0BBLKBANKSCBKTBTISCOCurrent18%22%41%35%31%0%25%50%75%100%MYPHSGIDTH48%30%27%60%60%0%25%50%75%100%MYPHSGIDTH6Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- Table 5:P/E:Current vs 10Y historicalBBLKBANKSCBKTBTISCOSAWAD*Current PE9.9x11.0 x10.4x8.8x9.7x15.8x10Y Mean9.6x10.6x10.7x8.4x8.0 x20.8x10Y SD0.811.191.131.121.064.82Current vs Mean0.4 SD0.3 SD-0.3 SD0.4 SD1.6 SD-1.0 SDSource:Bloomberg,J.P.Morgan.Note:5Y data used for SAWAD.12M forward data used.Table 6:P/B:Current vs 10Y historicalBBLKBANKSCBKTBTISCOSAWAD*Current PB0.89x1.12x1.08x0.81x1.71x3.42x10Y Mean1.0 x1.6x1.7x1.1x1.4x5.7x10Y SD0.180.320.370.250.281.74Current vs Mean-0.8 SD-1.4 SD-1.7 SD-1.1 SD1.0 SD-1.3 SDSource:Bloomberg,J.P.Morgan.Note:5Y data used for SAWAD.12M forward data used.Table 7:RoE:Current vs 10Y historicalBBLKBANKSCBKTBTISCOSAWAD*Current RoE(%)9.210.710.79.418.324.310Y Mean(%)11.215.616.813.418.530.710Y SD1.573.403.022.622.323.04Current vs Mean-1.2 SD-1.5 SD-2.0 SD-1.5 SD-0.1 SD-2.1 SDSource:Bloomberg,J.P.Morgan.Note:5Y data used for SAWAD.12M forward data used.7Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- Thailand Banks compare well on EPSgEarnings is scarce across Asia banks,with nine out of 10 banking sectors delivering sub-10%EPSg.Thailand financials offer 10%EPSg this and next year while trading at 10.4x P/E,offering growth and relative value.Credit cost-driven earnings is,by definition,cyclical.Hence,technically,these earnings do not deserve high multiples.Yet,2019/20 provisions of 116/101bps are coming off highs and will likely undershoot through-the-cycle averages.Thus,the inflection in EPS revisions for the sector is here to stay.Further,Thai banks offer 4.9%dividend yield and a hedge against risk of a sharp dollar rally.Figure 8:Asia Banks P/E vs.2Y EPSgSource:Bloomberg,J.P.Morgan.We expect positive revisions at Thai banks,after 13%negative EPS revisions over the past 12M.Lower credit costs would be the key driver of positive revisions.In the last 1Y,changes in EPS forecasts were driven by decline in fees,higher operating costs and risks to NIM from one-sided rate hike by select banks.The upside to Street EPS forecasts is small,but a switch in direction of EPS revisions is important for bank stocks.Figure 9:Thailand Banks:EPS revision over last 1YSource:Bloomberg,J.P.Morgan.Note:Based on JPM coverage universe(ex-SAWAD).EPS revision for 2019E.Rebased to 100.We expect credit costs to improve 12bps y/y this year to 116bps,on top of 40bps y/y improvement last year.Credit growth has been slow at 4.3%CAGR in last 5Y,which combined with tighter credit standards provides a degree of comfort on these forecasts.Inventory build-up has been high in the economy in last 6M,likely due to slower trade.Yet,progress on trade negotiations between large economies provides a reason to be positive on this count.SGIDPHMYTHINKRCHTWHK3%5%7%9%11%13%15%3579111315172Y EPS CAGR(18-20E)2019E PE(x)80.085.090.095.0100.0105.0Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-1913%-ve EPS revision in last 12M8Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- Figure 10:Sector credit costsbpsSource:Company reports and J.P.Morgan estimates.In the midst of slow loan growth and lower non-II,banks have been in the process of optimizing asset yields.Based on exit NIMs in Dec-18,as well as BoTs 25bps policy rate hike;we forecast 8bps NIM expansion for large banks in 2019 to 3.11%.The impact of 68%CASA ratio for Big4 banks is rather under-appreciated.Figure 11:Thailand Banks NIMs(%)Source:Company reports and J.P.Morgan estimates.Figure 12:Thailand Banks-Non-II Y/Y Growth(%)Source:Company reports and J.P.Morgan estimates.Decline in fee income started in earnest last year,which was the key driver of negative revisions.Given that this was new news,it is likely that Street(including 60 80 100 120 140 160 18020082009201020112012201320142015201620172018 2019E 2020E 2021E2.90%3.00%3.10%3.20%3.30%3.40%20082009201020112012201320142015201620172018 2019E 2020E 2021E-10%0%10%20%30%40%2010201120122013201420152016201720182019E2020E2021E9Asia Pacific Equity Research13 March 2019Harsh Wardhan Modi(65)6882- us)have over-corrected the forecasts in line with most conservative guidance(which came from KBank)on fee income.We expect full-year impact of online fee waiver this year.PromptPay for business poses further risk.The currency strength is an important driver for Thailand banks,from a regional portfolio perspective.THB has been one of the best performers in Asia in almost every time frame in last 10Y.Thus,in case USD strengthens vs.EM Asia,against the grain of current expectations,TH banks should hold up much better than ID/PH banks.Figure 13:AxJ Currencies:1Y%changeSource:Bloomberg,J.P.Morgan.Note:negative is depreciation against USDFigure 14:AxJ Currencies:3Y%changeSource:Bloomber