2021-11-24-瑞士信贷集团-泰国银行业_从数字化转型和大流行后恢复中获益_63页_1mb

Thailand Banks Sector Summary

Core Content

The Thailand banks sector is poised for growth and re-rating due to the ongoing digital transformation and post-pandemic recovery. The report highlights that successful digital banks, such as Kakao Bank and Bank Jago, are valued at higher PBV multiples, suggesting that traditional banks in Thailand could also benefit from similar valuation re-rating if they successfully transition to a digital-first model. The report focuses on several key banks, including SCB, KBANK, TTB, and KTB, which are expected to outperform, while BBL and TISCO are downgraded due to conservative policies and valuation concerns.

Main Points

• Digital Transformation & Re-rating:

  • Thai banks are expected to benefit from a shift to the digital economy.
  • The report suggests that valuation multiples for Thai banks could increase, similar to those of successful neobanks and fintechs.
  • SCB is upgraded to OUTPERFORM, with its valuation changed to SOTP, indicating a significant upside potential.

• Post-pandemic Earnings Recovery:

  • Thai banks are expected to post solid earnings growth (+14% YoY in 2022E), driven by post-pandemic demand recovery and rising foreign tourist activity.
  • Earnings per share (EPS) for covered banks are upgraded by 12% in 2021E, 11% in 2022E, and 10% in 2023E, which are above the consensus.
  • Provision pressure is easing due to the Bank of Thailand's (BoT) debt relief and restructuring measures.

• Neobanks and Market Competition:

  • Neobanks are expected to enter the market with digital-only licenses, potentially including major e-commerce and platform players.
  • The report argues that the impact of neobanks on traditional banks is expected to be minimal compared to the growth from post-pandemic recovery.
  • The disruption risk is considered manageable due to:
    • Existing partnerships with major platform players.
    • A highly penetrated market limiting the number of new entrants.
    • High NPL risk slowing the aggressive expansion of new players.

Key Banks and Valuation

Key Risks

• Resurgence of the pandemic: Could lead to lockdowns and affect credit cost and growth outlook.
• Higher-than-expected management overlay: May impact operational efficiency.
• Irrational pricing competition: Could pressure profitability and valuation.
• Cost overruns: On new business ventures may affect financial performance.
• Impairment risk: If new investments fail to take off, it could affect returns.

Valuation Metrics

Conclusion

The Thailand banks sector is expected to benefit from the post-pandemic recovery and digital transformation. While the emergence of neobanks may introduce some market volatility, the overall earnings recovery and growth prospects are seen as strong enough to support share price appreciation. The report highlights SCB and KBANK as key beneficiaries of this transformation, with SCB's valuation upgraded to SOTP and KBANK seen as a potential candidate for similar treatment. The report also notes that traditional banks have the potential to unlock value through strategic shifts and new business models, despite current valuation challenges.