KTB Shares Gain 4% on Optimism over Full-2022 Earnings Outlook

The share price of Krung Thai Bank Public Company Limited (SET: KTB) rose THB0.60/share or 4.20% to THB14.90/share, with a total value of THB1,030 million.

In 1Q2022, KTB reported net profit of THB8,780 million, an increase of 57.4% YoY, as the result of an improvement in total operating income from both net interest income of 5.6% from substantial loan growth focusing on quality loans during economic uncertainties. Furthermore, KTB has set aside an expected credit losses at a high level of THB5,470 million, though decreased by 32.1% YoY. NPLs Ratio was at a steady controllable level of 3.34%, reduced from 3.50% as at December 31, 2021.

Maybank Securities (Thailand) (MST) has given a “BUY” recommendation on KTB with a target price at THB18.00/share.

MST stated that it turned more positive and saw a buying opportunity in KTB after it posted 1Q22 results. MST upgraded KTB to BUY from HOLD with a higher TP of THB18.00 (0.66x FY22E P/BV, 8% ROE) from THB13.00 after raising its FY22-23E EPS by 26-27% on lower credit cost. 

MST expected the market to re-rate the stock in the next few weeks following an analyst briefing. Its valuation gap with other large banks should narrow on strong EPS growth. MST thought that KTB’s valuation is attractive at only 0.5x FY22E PBV and 7x PER vs sector average of 0.8x FY22E PBV and 9x PER.