20180316-辉立证券-Leader_in_vehicle_title_and_nano_finance_loans_12页_355kb
报告摘要
Muangthai Leasing (MTLS) Summary
Core Content
Muangthai Leasing (MTLS) is a leading financial services company in Thailand, specializing in vehicle title loans and nano finance services. Established in 1992, it initially offered hire-purchase loans for motorcycles before shifting to motorcycle title loans in 1998. Currently, MTLS operates two core businesses: secured loans (including motorcycle, car, agricultural vehicle, and land title loans) and unsecured loans (personal loans and nano finance). It is recognized as a market leader in both vehicle title and nano finance loans.
Main Business Activities
- Secured Loans:
- Motorcycle title loans: 37.7% of total loans
- Auto title loans: 32.8% of total loans
- Agricultural vehicle title loans and land title loans
- Unsecured Loans:
- Personal loans
- Nano finance loans (representing 25.6% of the industry's total loans)
Key Financial Performance
From FY14 to FY17, MTLS experienced strong growth:
- Loan Book Growth: CAGR of up to 67.7%
- Net Profit Growth: CAGR of up to 77.1%
- Branch Expansion:
- 2,424 branches at end-FY17
- Target of 4,000 branches by FY20
- Profit Growth in FY17: 41.9% year-over-year to Bt3.5bn
- Projected Growth (FY18-FY19):
- Loans: CAGR of 32.5%
- Net profits: CAGR of 37.9%
Valuation and Financial Ratios
| Metric | FY16 | FY17 | FY18E | FY19E |
|---|---|---|---|---|
| Revenue (Btmn) | 4,129 | 6,774 | 9,368 | 12,150 |
| Net Profit (Btmn) | 1,464 | 2,501 | 3,526 | 4,752 |
| EPS (Bt) | 0.69 | 1.18 | 1.66 | 2.24 |
| P/E (X) | 58.6 | 34.3 | 24.4 | 18.1 |
| BVPS (Bt) | 3.16 | 4.22 | 5.72 | 7.71 |
| P/B (X) | 12.8 | 9.6 | 7.1 | 5.3 |
| DPS (Bt) | 0.10 | 0.18 | 0.25 | 0.34 |
| Dividend Yield (%) | 0.2 | 0.4 | 0.6 | 0.8 |
| ROE (%) | 23.72 | 31.99 | 33.48 | 33.40 |
| Debt/Equity (X) | 3.65 | 4.13 | 3.98 | 3.68 |
Risk Management
- NPL Ratio: 1.2% (exceptionally low)
- SM Ratio: 8% (also low)
- Normal Loans: 90.8% of total loans
- NPL Coverage Ratio: 265% (strong enough to meet new accounting rules)
- Loan-Loss Provisioning: Expected to be reduced in FY18 as current reserves may be too high
- Interest Spread: 20.7% in FY17, lower than nano finance interest rate of 36% and close to personal loan interest rate of 20%
Growth Strategy
MTLS aims to expand its branch network by adding 600 branches annually, targeting 4,000 branches by FY20. This expansion is expected to:
- Increase customer reach
- Boost revenue and loan portfolio
- Achieve economies of scale
- Reduce cost-to-revenue ratio
- Allow for quicker breakeven and higher loans per branch
Investment Thesis
- MTLS has a strong growth momentum, driven by its expansion and effective risk control
- The company's PEG ratio for FY18 is 0.8x, leading to a target price of Bt54.50/share
- Despite a less compelling dividend profile due to high working capital needs, MTLS is expected to increase its dividend to Bt0.25/share in FY18
- The risk-reward proposition remains attractive, reaffirming the 'BUY' rating
Peer Comparison (as of 15 March 2018)
| Company | Mkt Cap. (Btmn) | P/E (x) | P/BV (x) | Div Yield (%) |
|---|---|---|---|---|
| MTLS TB | 85,860 | 34.3 | na | 0.2 |
| SAWAD TB | 69,592 | 26.4 | 7.4 | 0.0 |
| BAY TB | 316,298 | 13.6 | 1.4 | 2.0 |
| TCAP TB | 63,790 | 9.1 | 1.0 | 3.8 |
Risk Factors
- Interest rate fluctuations
- Heavy funding dependence from bank loans
- Loan quality risks
Key Developments
- 2014: Listed on the SET, converted into a public limited company, reduced par value to Bt1/share
- 2015: Launched nano finance services and land title loans
- 2017: Continued strong quarterly profit growth and improved financial metrics
Participation in Thai CAC
MTLS is part of Thailand's Private Sector Collective Action Coalition Against Corruption (Thai CAC), under the Thai Institute of Directors, indicating its commitment to anti-corruption measures.
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