Next week (18-22 Jan ’20) will enter the 4Q20 financial group announcement period starting with TISCO on 18 Jan ’64 and followed by KKP from 18-19m. Dec. 64 Before the queue of large banks on 20-21 Jan. 64, the research department expects the group net profit (8 banks) for the fourth quarter of 2020 to be 26,36.3 billion baht, down 9.4%. From the previous month and a contraction of 36.3% from the same period last year. On a conservative credit cost assumption, the credit cost of the Group rose to 1.94% from 1.87% in the prior period.
Overall, the research department estimates the net profit in 2020 is 1.3 billion baht, slowing 34% from 1.97 billion baht in 2019, before starting to climb to 1.4 billion baht in 2021 and increase to 1.53 billion baht in In 2022, the credit cost trend will gradually decline. Most banks have already set aside provisions in 2020 to support asset quality problems. Especially the debtor groups who have taken aid measures that have been restructured.
Recommended as the market The Group trades on average share price to book value (P / BV) of approximately 0.7 times, almost 2 SD lower than the 12-year historical average, while the trend of net profit to equity (ROE) of the Group is gradually gradual. Recovering as expected of the group profit That began to recover since 2021, support PBV trading higher. In addition, the direction of foreign capital continues to flow in. It is a positive factor for the shares in the group. Especially banks that still have a gap for NVDR to enter such as SCB (FV @ B102), KBANK (FV @ B126).
As for basic options, I still like banks with strong statements of financial position like TISCO (FV @ B95), although prices continue to rise to full FV, but expect a dividend yield of around 4% in 2020 and 7% in 2021. % Total Expected Return is approximately 11% followed by BBL (FV @ B154) from a large portfolio of credit structures.
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