汇丰银行-泰国-银行业-第三次的魅力-20171010-hsbc-thailandbanksthirdtime’sthecharm

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1、10October2017ThailandBanksEQUITIESFIGThirdtime’sthecharm?ThailandStockshavelagged;webelievethemarkethasnotpricedinXiushiCai*creditcostrecoveryAnalystTheHongkongandShanghaiBankingCorporationLimited,SingaporeBranchSectoristradingata10x2018ePE;downsiderisksfairlylimitedxiushica

2、i@hsbc.com.sg+6566580617Wecut2017-19enetprofitby11-15%andsetnewTPsbasedKarWengLoo*Analyston2018eBV;ourpreferredpicksremainKTBandBBLTheHongkongandShanghaiBankingCorporationLimited,SingaporeBranchkarwengloo@hsbc.com.sgStockshavelagged,uponly8%YTD.YTD,theSETBANKIndexhasbeenupa+65665

3、80621weak8%andunderperformedthebroaderindex(+10%).AmongASEANbanks,MukulYadav*AssociateThaibankshavebeentheworstperformers(+8%YTDvsAPXJ+18%).WehadBangaloreearlieranticipatedNPLstopeakin2Q17,butwebelievethelikelihoodofthathappeningislowandnowpushourexpectationsto2018e.*Employedbyano

4、n-USaffiliateofHSBCSecurities(USA)Inc,andisnotregistered/qualifiedpursuanttoFINRAregulationsWebelievethisisthefinalleg.Thegoodnewsisthat:1)specialmentionloangrowthisdecelerating,andthestressedloansratiohasstabilisedin2Q17;2)thenewNPLformationratiohasdeclinedfortwoconsecutivequarte

5、rs;and3)2012-14vintageloanshavemostlyturnedsour.Thesetrendscouldsignalthatthepeakisnear.Downsideislimitedwiththesectortradingata10x2018ePE.Wecontinuetobeconstructiveonthesector,as1)thedownsideriskslookfairlylimited,giventheongoingstabilityintheeconomy;2)themarkethasnotpricedinacre

6、ditcostrecovery;and3)valuationsarenotexpensiveata10x2018ePE(slightlybelowmeanat11x).Cutnetprofitby11-15%in2017-19e,mostlytoreflecthighercreditcostsassociatedwiththeassetqualitydeteriorationin2017e(from130bpto142bp)andNIMpressurearisingfromthecutinlendingratesinMay2017(by5-7bp).Wea

7、lsolowerourrevenuegrowth(loanandfeeincomegrowth)onthebackofadelayinNPLspeaking.Inthisreport,wealsorollforwardourvaluationto2018eandsetnewtargetpricesbasedon2018eBVPS.MiFIDII–ResearchOurpreferredpicksareKTBandBBL.OurpreferredstocksareKTB(whichstandsIsyouraccessagreed?tobenefitmoret

8、hanpeersfrompeakingNPLs,corporate