Analysts Expect TISCO to Post a 2Q20 Profit of ฿1.4bn, Recomm. “BUY” with a TP at ฿97

Analysts estimated Tisco Financial Group Public Company Limited (TISCO) to report a 2Q20F core profit of 1.49 billion baht (-17%YoY) and have given a “BUY” recommendation with a target price as high as ฿97/share, with an attractive dividend yield of 7.4%. 

 

TISCO is expected to submit a 2Q20 financial statement on July, 15. Analyst saw the core profit would be pressured by debt moratorium measures and the extraordinary setup of ECL, causing a 17% drop year-on-year, but still reiterates a “BUY” rating.

 

Trinity Securities forecasted TISCO to post a core profit of 1,495 million baht in 2Q20F, remains stable when compared to a previous quarter, but to plunge by 17% from a year earlier. The key factors comprised of 1) lower net interest income, which expecting to decrease 8%YoY as NIM would drop 0.25% after reduced interest rates in order to help debtors, as well as lower interest on loan due to economic slowdown. 

 

2) A remained stable of non-interest income and a drip in fee income in a line with trends in lending, otherwise would see a profit from financial instrument revived and 3) lower credit cost by 40%YoY from the extraordinary setup of ECL.

 

Trinity Securities has revised TISCO’s 2020 – 2021 earrings forecast to 6,147 million baht (-16%YoY) and 6,832 million baht (+11%) respectively and upgraded a 2021 target price to ฿97/share (based on P/BV ratio 1.7) backed by high remaining excess reserve. 

 

Meanwhile Bualuang Securities has upgraded TISCO to a “BUY” recommendation from “hold” rating with a target price of ฿86/share (from ฿76/share) and foreseed loans income in 2Q20 to contract by 2%YoY and 3%QoQ.

 

Bualuang Securities also expected TISCO’s profit to recover in 2H20 from a lower setup of ECL and loans income revived in line with an improvement of domestic Covid-19 crisis.