Target price : Bt11.20
Recommendation : BUY
Closing Price (24 Feb 09) : Bt7.85
4Q08 profit in line with forecast
- Credit card issuer KTC posted a 4Q08 net profit of Bt100.12m, down 2.4% QoQ but up 36.5% YoY. The result matched our forecast of Bt101.71m.
- For the whole of 2008, KTC made a profit of Bt520.40m, flat YoY. We also expect KTC to pay a 2008 dividend similar to the Bt1/share it paid out to shareholders last year, equivalent to an attractive yield of 12.7%.
- Though the operating outlook remains vulnerable to economic slowdown, attractive dividend yield and strong share price upside potential still make the stock attractive. We maintain our ACCUMULATE rating on KTC with a 2009 price target of Bt11.20/share.
4Q08 profit in line with forecast
Credit card issuer KTC posted a 4Q08 net profit of Bt100.12m. The profit figure was 2.4% below the Bt102.60m profit it made in the prior quarter but 36.4% above the Bt73.35m profit it earned in the same year-ago quarter. The result matched our forecast of Bt101.71m. Total revenue grew both YoY and QoQ but at a modest rate, reflecting that KTC felt the pinch of the slowing economic conditions, which dampened spending and consumption. Expenses also remained high, driven by provisions, interest expenses and the launch of marketing campaigns.
2008 profit flat YoY
For the whole of 2008, KTC generated a profit of Bt520.40m, flat YoY. Total revenue rose 12.4% on the back of credit card business. KTC Cash grew at a slower pace. At end-2008, KTC had a total of 2.19m customer accounts, up 13%. Net interest margin (NIM) expanded to 13.7% from a year-ago level of 13.4%. Funding costs eased back to 4.6% from 4.9% in line with a continued downward interest rate trend. Expenses rose at a faster rate than revenues as (i) administrative expenses jumped 9.4% on the back of loan portfolio growth and the launch of marketing campaigns to cheer up sales, (ii) loan-loss provisions surged 29.5% as a result of changes in provisioning policy, and (iii) interest expenses edged up 6.4% due to a 17.2% rise in borrowing and bond issue, sending interest-bearing D/E ratio higher to 7x from a year-ago level of 6.2x
We also expect KTC to pay a 2008 dividend similar to the Bt1/share it paid out to shareholders last year, equivalent to an attractive yield of 12.7%.
ACCUMULATE rating based on attractive dividend yield and strong share price upside potential
In our view, the operating outlook remains vulnerable to the slowing economic environment, which will lead to a sustained slowdown in consumer spending. KTC has tightened its client screening criteria to ward off the risk of a surge in NPLs and shifts its focus to attract wealthier client base, as this segment is less sensitive to cyclical economic downturn than lower-income earners. Instead of the aggressive push into broad-based client segments, KTC will turn to niche marketing strategy and maintain the quality of its loan portfolio.
We keep our 2009 profit outlook for KTC at Bt475.20m. The profit decline reflects gains from the Visa's IPO deal a year earlier. Though the operating outlook remains at risk, attractive dividend yield and strong share price upside potential still make the stock attractive. We maintain our ACCUMULATE rating on KTC. Our 2009 price target of Bt11.20/share is equivalent to an average of 0.5x P/BV and 5.9x P/E (ROE of 8.5%).
By Phillip Securities (Thailand) Plc. on Feb 25, 2009
Top USA Cities
Colorado Springs Colorado ,St. Louis Missouri ,Chicago Illinois ,Akron Ohio,Santa Ana California ,Tulsa Oklahoma,Phoenix Arizona ,Birmingham Alabama,Scottsdale Arizona,Pittsburgh Pennsylvania,Houston Texas ,Nashville-Davidson Tennessee,Honolulu Hawaii,Stockton California,Plano Texas,Brookhaven New York ,Buffalo New York ,Dallas Texas ,Philadelphia Pennsylvania ,Jersey City New Jersey,Chesapeake Virginia,Virginia Beach Virginia ,Riverside California,Norfolk Virginia,Austin Texas,Raleigh North Carolina ,Toledo Ohio,Orlando Florida,Tampa Florida,North Hempstead New York,Reno Nevada,Islip New York ,Detroit Michigan,Memphis Tennessee,Oyster Bay New York,Boston Massachusetts,Fort Worth Texas ,Seattle Washington,Washington District of Columbia,Cincinnati Ohio,Columbus Ohio,Fresno California,San Antonio Texas,Lincoln Nebraska,Fort Wayne Indiana ,Cleveland Ohio,Chula Vista California ,Anchorage Alaska,Glendale Arizona,Baton Rouge Louisiana ,Sacramento California,Madison Wisconsin,New York New york,Jacksonville Florida,Las Vegas Nevada ,Modesto California,Chandler Arizona,Albuquerque New Mexico ,Minneapolis Minnesota,Durham North Carolina ,Atlanta Georgia,Anaheim California,San Jose California ,Mesa Arizona,Denver Colorado,Baltimore Maryland,Lexington-Fayette Kentucky,Lubbock Texas,Rochester New York ,Newark New Jersey ,Arlington Texas ,Los Angeles California,Kansas City Missouri ,Omaha Nebraska,Aurora Colorado,Long Beach California ,Charlotte North Carolina ,Milwaukee Wisconsin,Corpus Christi Texas ,Portland Oregon ,El Paso Texas ,Indianapolis Indiana,St. Petersburg Florida ,Oakland California,St. Paul Minnesota ,Wichita Kansas ,Greensboro North Carolina ,Bakersfield California,Miami Florida,Babylon New York ,Hialeah Florida,Hempstead New York ,Tucson Arizona,Oklahoma City Oklahoma ,New Orleans Louisiana ,Henderson Nevada,San Francisco California ,Laredo Texas,San Diego ,Garland Texas
ไม่มีความคิดเห็น:
แสดงความคิดเห็น