Analysts See Positive Upsides in KBANK, Giving a Target Price as High as ฿194!!

Analysts have issued analysis with positive views on Kasikornbank Public Company Limited (KBANK) after the report of a steady net profit of THB 38,727 million in 2019, slightly increased by 0.70% YoY.

 

KGI Securities (KGI) maintained an “Outperform” rating on KBANK with a target price at ฿194.00/share, stating that the 4Q19 earnings at THB 8.8 billion were 6% above KGI’s consensus and 4% of the market’s consensus due to huge gain on investment.

KGI expects operating expenses should continue to rise as a CAPEX cycle for the new banking model is needed. However, the positive upside will come from realizing more investment gain under TFRS9 and manageable NPLs and credit costs.

 

Maybank Kim Eng has upgraded KBANK from HOLD to BUY with a new target price at ฿160.00/share. Maybank turns positive on KBANK and expect to see potential capital management in terms of higher dividends or share buybacks due to: i) capital is more than enough post-TFRS9 implementation, ii) KBANK expects the bank to focus on improving ROE since it is now below 10%, and iii)  KBANK’s DPR is below the sector at only 20-28% in the past 8 years compared to other big banks of 35-47%.

Even though net insurance income in 2020 due to high competition and tighter regulations is expected to remain weak, fee income in KBANK’s loan-related and mutual fund business is expected to have a continuous growth the bank only saw a 1% impact to fee income and a very small impact to earnings from the new fee rate charge on prepayment, late penalty and ATM/debit card fees.

 

Phillip Securities: Buy at ฿183.00
DBS Vickers Securities: Buy at ฿180.00
Asia Plus Securities: Buy at ฿169.00
Asia Wealth Securities: Buy at ฿166.00
Finansia Syrus: Buy at ฿164.00