วันอังคารที่ 26 พฤษภาคม พ.ศ. 2552

Phillip Trainee Stock Broker Recommends Buy KTB

Krung Thai Bank – KTB - BUY

Target price : Bt5.80
Recommendation : BUY
Closing Price (27 March 09) : Bt4.52

1Q09 profit to be up QoQ but down YoY
- Loans grew strongly in 2M09 thanks chiefly to loan demand from government agencies. Net interest margin (NIM) is however expected to come under downward pressure.

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- We estimate KTB's 1Q09 profit to be about Bt3.31b. The profit figure is down 20.2% YoY on reduced investment gains and dividends from Vayupak Fund (VAYU) but up 49.8% QoQ on a return of loan-loss provisions to normal levels.
- We maintain a 'TRADING' rating on KTB with a 2009 price target of Bt5.80/share. The stock will trade ex-dividend (XD) for 2008 dividend of Bt0.44/share on Apr 23, 2009.

1Q09 profit expected to be Bt3.31b, down 20.2% YoY but up 49.8% QoQ
Net loans at KTB, Thailand's second-largest lender by assets grew by 1% in the first two months of 2009, outperforming the industry average of a 2.5% contraction. Much of the growth came from loan demand from government agencies, especially from the Ministry of Finance. NIM is however expected to come under downward pressure as (i) yields on loans to government agencies are lower than lending to private sector, (ii) the cut in lending rates will effect immediately while the reduction in deposit rates will have a time lag of about two to three months, and (iii) 2H08 dividends from VAYU more than halved to Bt0.15/unit from the same year-ago level of Bt0.40/unit. Loan-loss provisions are expected to remain normal at Bt1.50b/quarter as a slight increase in NPLs is not a worry. Non-interest income is expected to be driven by gain on bond sale. No exceptional operating expenses, except for bonus payments are anticipated in 1Q09. Effective tax rate is forecast to be 30%.

We expect the bank's 1Q09 profit to come in at Bt3.31b. The projected profit figure is down 20.0% YoY, as investment gains and dividends from VAYU are expected to be lower than in the same year-ago quarter. On a QoQ basis, the estimated profit number implies a 49.8% growth, as loan-loss provisions are anticipated to return to normal levels from as high as Bt4.70b.

TRADING rating based on strong potential price upside and high dividend yield
We leave our 2009 profit forecast for the bank unchanged though the loan picture signals a continued growth as NIM is expected to come under downward pressure from the increased portion of low-yield loans to government agencies. In our view, the bank is still at risk that loan-loss provisions will rise above normal levels this year, as its NPL coverage ratio remains below the levels of other big-cap banks. We maintain a 'TRADING' rating on KTB with a 2009 price target of Bt5.80/share. The bank would also pay a 2008 dividend of Bt0.44/share. The stock will trade ex-dividend on Apr 23, and the dividend is scheduled to be paid on May 12, 2009.

By Phillip Securities (Thailand) Plc. on Mar 30, 2009

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