FSSIA Maintains “BUY” Call on SCB as Bitkub Termination Should Positively Impact Share Price

SCB officially terminated the Bitkub deal on Thursday over an uncertain time frame for solving ongoing issues.

SCB X Public Company Limited (SET: SCB) announced a termination of a 51% shareholding acquisition in Bitkub Online Co., Ltd. worth THB 17,850 million through its subsidiary SCB Securities Co., Ltd.

The bank stated that whilst the results of the due diligence exercise did not reveal any significant abnormal issues which are irremediable, Bitkub is currently in the process of resolving various issues as per the recommendations and orders of the Securities and Exchange Commission, Thailand, which are uncertain in terms of timeframe in resolving those issues. As a result, both parties had agreed to terminate the transaction.

The share price of SCB shot up after the termination announced during the afternoon break time, jumped nearly 5% at the opening bell of the afternoon session and closed 5.74% higher on Thursday. The price continued to rise by 2.3% to THB113 per share on Monday.


FSSIA stated that SCB will not be penalized from the termination of investment in Bitkub, and the bank should have more liquidity for potential investments in the future. FSSIA stated that it thinks SCB will not pay any special dividend from the deal’s cancellation, one of the reasons for the overhang in its share price is the concern over the price of this deal. Therefore, FSSIA believed the cancellation should positively impact SCB’s share price.

FSSIA added that although there are still uncertainties regarding SCB’s transformation plan, the securities company thinks its core banking business should still perform well. Its share price has slumped significantly, with a -18% YTD return vs a -8% YTD return for SETBANK. It currently trades at 0.7x 2023E P/BV with an expected 2023 ROE of 8.5%. Thus, FSSIA reiterated its BUY call on SCB with an unchanged 2023 SoTP-based target of THB134 per share.