KTC Jumps 6% as the Analyst Sees Limited Impact from Covid-19, Recomm “BUY” at Bt90
KTBST expected KTC's performance to grow strongly from 2022 onward as card spending still expand amid limited impact from Covid-19 resurgence.
The share price of KTC rose ฿4.25/share or 6.01% to ฿75.00/share as of 15:30 local time in Thailand on May 21, 2021, as the analyst expected the company to have a limited impact from Covid-19 resurgence, while the business is expecting to grow outstandingly from 2022 onward.
KTBST Securities (KTBST) has given a “BUY” recommendation on Krungthai Card Public Company Limited (KTC) with a target price at 90.00/share, based on 2022E PBV at 7.4x (+3SD above 3-year average PBV).
Following the analyst meeting on May 19, 2021, the operation is moving forward in line with estimation due to 1) a limited downside risk from Covid-19 resurgence as card spending still growing compared to the same period of last year, especially the high-growth of online card spending that now contributed 20% to KTC’s revenue from previously 10%, 2) KTB Leasing (KTBL) and Phee Berm loans still has low revenue base, resulting in no significant impact to the operating results in 2021.
KTBST maintained 2021E earnings at 6.38 billion baht, representing an increase of 20% YoY, from a 8% expansion in loan and a lower credit cost to 606bps, coupled with management overlay at 1,000 million baht in 1Q21 (+17% YoY) due to more retail loans after the acquisition of KTBL.
The share price of KTC outperformed SET by 6% and 46% in the 3-month and 6-month period, respectively. KTBST recommended “BUY” on the potential of earnings to grow outstandingly starting from 2022 from its new business, digital platform and secured loan that has lower risks. KTBST estimated KTC’s 2020-2022 CAGR at 18%.