KBANK Jumps 4%, Analyst Recomm “BUY” at ฿148 on Stronger Results from Lower Provisions

The share price of Kasikornbank Public Company Limited (KBANK) rose ฿4.50/share or  3.67% to close at ฿127.00/share on January 29, 2020, with a trading value of 5,536 million baht.

 

UOB Kay Hian Securities (Thailand) expected KBANK to outperform its peers as the profit in 2021 likely to grow as high as 12%, above the average of banking earnings growth at 6%, along with a lower loan-loss reserves this year.

 

Given strong loan-loss reserves and better-than-expected loan quality prospects, the bank significantly decreased provisions, which were the main factors behind its strong performance in 4Q20. UOB increased its projections for 2021-22 to reflect lower credit costs outlook. Earnings are expected to rebound 9% yoy in 2021 and 11% yoy in 2022.

 

The strongest point of KBANK is an ability to produce a profit and resilience skill, which could boost the business even amid the economic slowdown.

With its strong balance sheet, positive earnings growth outlook, capital gain upside, and attractiveness to foreign investors, UOB upgraded a recommendation from HOLD to “BUY” and revised up a target price to ฿148.00/share (from ฿125.00/share).