KBANK Continues a Rally in Response to Better-than-Expected 4Q Result-Free Float Revision

The share of KBANK soared ฿3.50/share or 2.8% to ฿128.50/share with a trading value of 3,652 million baht following a spike nearly 8% yesterday to close at ฿125.00/share with a trading value of 8,297 million baht in response to the the revision on free-float calculated method. Analysts believe sectors with high free float will be benefited and gain more weights on SET Index. Moreover, the beat expectation of KBANK’s 4Q20 result has boosted other stocks in the banking sector.

 

KGI Securities upgraded Kasikornbank Public Company Limited (KBANK) to “Outperform” from Neutral and also raised a target price to ฿161.00/share from ฿130.00/share as the 4Q20 earnings report of 13.2 billion baht is far better than KGI estimate and the market consensus due to near zero credit cost (vs. 200bps in 3Q20). Full-year earnings were 29.5 billion baht (-24% YoY), driven by gain on investment and provisioning expense. 

 

Guidance from management indicates asset quality seems manageable and credit cost should not be too excessive. KGI cut its forecasts on credit cost and operating expense, and raised earnings by 42%/11% in 2021/2022, reaching a new 2021 target price of ฿161.00/share

 

Meanwhile, DBS Vickers Securities has given a “BUY” recommendation on KBANK with a target price at ฿181.00/share based on 1.0x P/BV as the 4Q20 earnings is better than expected, reporting a net profit of 13.3 billion baht (+50% YoY, +98% QoQ) due to low ECL.   

 

In addition, all borrowers in the debt moratorium program, representing 94% of loans, are able to resume their entire payment. DBSVS maintained KBANK as the banking sector’s Top Pick.