1、,32.70,2.6,Company report,FIGCommercial BanksEquity Thailand,abcGlobal Research,NeutralTarget price (THB)Share price (THB)Forecast dividend yield (%),35.70,Bank of Ayudhya (BAY TB)N: 4Q12: inline, uncertainty from potential new shareholder,Potential return (%) 11.6%Note: Potential return equals the
2、percentagedifference between the current share price andthe target price, plus the forecast dividend yield, Inline, commendable set of results Share overhang from potential new shareholder,DecHSBC EPSHSBC PE,2012 a 2013 E2.41 2.9413.6 11.1,2014 e3.339.8, Raise 2013/14e EPS by 3-4%, new TP THB35.70 (
3、THB32.70),maintain N,PerformanceAbsolute (%)Relative (%),1M7.32.6,3M8.2-0.9,12M59.418.5,Inline, commendable set of results. BAY reported full-year net profit of THB14.6bn (+58%,21 January 2013Xiushi Cai*AnalystThe Hong Kong and Shanghai BankingCorporation Limited, Singapore Branch+65 .sgKar Weng Loo
4、*AnalystThe Hong Kong and Shanghai BankingCorporation Limited, Singapore Branch+65 .sgTodd Dunivant*Head of Banks Research, Asia PacificThe Hongkong and Shanghai BankingCorporation Limited+852 2996 .hkView HSBC Global Research at:http:/*Employed by a non-US affiliate ofHSBC Securities (USA) Inc, and
5、 is notregistered/qualified pursuant to FINRAregulationsIssuer of report: The Hongkong andShanghai BankingCorporation Limited,Singapore BranchMICA (P) 038/04/2012MICA (P) 063/04/2012MICA (P) 206/01/2012Disclaimer &DisclosuresThis report must be readwith the disclosures andthe analyst certifications
6、inthe Disclosure appendix,and with the Disclaimer,which forms part of it,YoY), which was inline with ours and Bloomberg consensus. Overall, this is a commendableset of results, in our view. This is the first time the bank has exceeded its loan growth targetsubstantially since GE came on board, while
7、 asset quality improved significantly from 4.1% atend-2011 to 2.6% currently, inline with the big banks.Share overhang from potential new shareholder, maintain N. Operationally, we expectthe bank to improve its ROE from 14% to 15% this year, driven by stronger fee incomegrowth and lower provisioning
8、. However, with the uncertainty of a possible new majorshareholder still lingering, we expect a share overhang in the near term. Hence, we maintainour Neutral rating.Fees did better-than-expected. A positive surprise came from fee income, exceeding ourexpectations mildly by 5%. Fees grew 18% YoY for
9、 the full-year and 4% QoQ for the quarter.Key drivers for the quarter were from loan-related, collection fees, wealth and fundmanagement fees. Hence, we have raised our fee income growth assumption from 13% to 15%in 2013e, as we expect the bank to continue to be aggressive in this area.Opex surprise
10、d on the downside. A slight negative surprise (+4%) came from operatingexpenses, dragged down by higher-than-expected staff costs (from the HSBC retail bankacquisition and annual remuneration), and refurbishment costs. In view of the higher-than-expected costs occurred in 2012, we have raised our co
11、st-to-income ratio by 1ppt over the next2 years, in the range of 49-50%.Raise 2013/14e EPS by 3-4%, new TP THB35.70. Even though management aims tomaintain its NIM at 4.3-4.4% this year, we are still cautious of funding cost pressure and hencehave lowered our NIM assumptions by 8-14bp over the next
12、two years. We have also loweredour provisioning by 3-7%, we believe that the significant NPL ratio improvement wouldrequire lower provisioning on a sustainable basis. In view of the above changes, we haveraised our 2013/14e EPS by 3-4%, and have raised our TP to THB35.70 (from THB32.70) aswe raise o
13、ur sustainable ROE assumption from 13% to 14% on a more favourable ROEoutlook. In this report, we also introduce our 2015e earnings estimates.Index THAILAND SET INDEX Free float (%) 27Index level 1,421 Market cap (USDm) 6,713RIC BAY.BK Market cap (THBm) 200,447Bloomberg BAY TBSource: HSBCSource: HSB
14、C,25,25,Bank of Ayudhya (BAY TB)Commercial Banks21 January 2013Financials & valuationP&L summary (THBm),Ratios (%),abc,Year toInterest incomeInterest expenseNet interest incomeNet fees & commissionsOther incomeOperating incomeOperating expensePre-prov op profit (PPOP)Provision chargesAssociates & am
15、ortizationNon-op itemsProfit before taxTaxationMinorities + preferencesReported profit,12/12a64,640-24,68739,95312,7358,32361,011-30,79830,213-11,385177019,005-4,337-4314,625,12/13e73,201-29,85743,34414,6458,94466,933-33,26233,671-12,000195021,866-3,936-4317,887,12/14e80,349-34,02746,32216,8429,5817
16、2,746-35,92336,823-12,300214024,737-4,453-4320,241,12/15e87,382-37,87549,50719,36810,49779,372-38,79740,575-13,300236027,511-4,952-4322,516,Year toGross yieldCost of fundsNet interest marginNon-int inc/operating incCustomer loans (gross)/depositsCost/operating income ratioCost/average assetsNet prov
17、ision/ avg net loansGross NPLs/loansCoverageEffective tax rateCore ROACore ROEGrowth (YoY, %),12/12a6.92.94.334.5121.450.33.01.52.6155.822.81.4513.5,12/13e7.13.24.235.2124.549.53.01.42.4156.318.01.6014.9,12/14e7.33.44.236.3126.849.43.01.32.3161.118.01.6815.1,12/15e7.33.54.137.6129.248.93.01.32.2165.
18、618.01.7315.2,Core profitBalance sheet summary (THBm)Ordinary equityCustomer loans (Net)Investment in securitiesCustomer depositsDebt issuedInterest earning assetsInterest bearing liabilitiesTotal assetsCapital (%),14,625 17,887 20,241 22,516113,486 126,576 140,639 155,899801,236 889,150 960,756 1,0
19、38,2730 0 0 0687,159 742,132 786,660 833,860154,629 173,184 193,966 217,242931,140 1,024,698 1,106,831 1,193,052848,692 936,844 1,010,701 1,083,3751,071,965 1,161,152 1,252,617 1,351,611,Earning assetsTotal assetsGross loansDepositsNet interest incomeNon interest incomeOperating incomeTotal costProv
20、ision chargesPre-provision profitHSBC PBTHSBC net profitHSBS EPS,11.513.115.722.66.618.310.412.1-6.88.721.757.957.8,10.08.310.78.08.512.09.78.05.411.415.122.322.3,8.07.98.06.06.912.08.78.02.59.413.113.213.2,7.87.98.06.06.913.09.18.08.110.211.211.211.2,RWA (THBmn)Core equity Tier 1,747,25810.9,809,42
21、910.9,873,18810.4,942,1960.0,DPSBVPS,-7.410.5,33.311.5,27.411.1,16.810.9,Tier 1CAR,10.916.9,10.916.6,10.415.9,10.015.2,ROAA Deconstruction,Per share data (THB),Net Interest IncomeNon-Interest Income,3.962.09,3.882.11,3.842.19,3.802.29,EPSDiluted EPS (HSBC)DPSNTABVRatios (%)PE (HSBC)Pre-provision mul
22、tipleP/NTAPBV,2.412.410.6318.6518.6513.66.61.81.8,2.942.940.8420.8020.8011.15.91.61.6,3.333.331.0723.1223.129.85.41.41.4,3.713.711.2525.6325.638.84.91.31.3,Operating IncomeOperating ExpensesPPOPProvisionsNon-op itemsOp Inc before TaxTaxationMinoritiesReported profitLeverageReported ROE,6.04-3.052.99
23、-1.130.021.86-0.430.001.459.313.5,5.99-2.983.02-1.070.021.94-0.350.001.609.314.9,6.03-2.983.05-1.020.022.03-0.370.001.689.015.1,6.10-2.983.12-1.020.022.09-0.380.001.738.815.2,Dividend yield (%)Price relative,1.9,2.6,3.3,3.8,Issuer informationShare price (THB),32.75,No of shares (m),6,074,403530,4035
24、30,HSBC TP (THB)RatingFree float (%)6M ADV (USDm),35.70Overweight27%12.8,Market cap (THBm)Market cap (USD m)Bloomberg (Equity)Reuters (Equity),198,9286,503BAY TBBAY.BK,Source: Company, HSBC estimates,Priced as of market close 17 January, 2013,2015,2015,2011Bank of Ayudhya,2012Rel to THAILAND SET IND
25、EX,2013,2014,Source: HSBC,2,Bank of Ayudhya (BAY TB)Commercial Banks21 January 20134Q results summary,abc,BAY reported full-year net profit of THB14.6bn(+58% YoY), which was inline with ours andBloomberg consensus. Overall, this was acommendable set of results, in our view. This isthe first time the
26、 bank has exceeded its loangrowth target substantially since GE came onboard, while asset quality improved significantlyfrom 4.1% at end-2011 to 2.6% currently, inlinewith the big banks.4Q12 PBT was down 2% QoQ (YoY comparison, Non-interest income rose 12% QoQ, largelydriven by loan recovery income
27、and gains onsale of foreclosed properties. Fees did well,growing 18% YoY for the full-year and 4%QoQ for the quarter. Key fee income drivers forthe quarter were from loan-related, collectionfees, wealth and fund management fees. Opex rose 9% QoQ, dragged down by higherstaff costs and marketing andpr
28、omotional expense.,not meaningful largely due to a low base effectfrom the floods in 2011), where a stronger non-interest income was offset by higher opex. Loan growth momentum was extremelystrong, expanding 6% QoQ in 4Q vs 3Qs 3%.This was largely driven by auto financing,which rose 9% QoQ alone. Fo
29、r the full year,auto HP and SME loans were the key loangrowth drivers at 30% and 13%, respectively.3,Bank of Ayudhya (BAY TB)Commercial Banks21 January 2013Bank of Ayudhya 4Q12 results summary,abc,FYE Dec (THBm),4Q12,3Q12 % QoQ ch,4Q11 % YoY ch,12M12,12M11 % YoY ch,Net interest incomeNon-interest in
30、come, incl gainsOperating expensesPre-provision profitProvision chargesPre-tax profitTaxes & minoritiesNet profitEPS (THB)ROA (%)ROE (%)NIM (%)Gross loans (THBbn)Deposits (THBbn)Gross loan/dep ratioNon-II/Income (%), incl gainsCost-income (%), incl gainsGross NPL (THBbn)Gross NPL ratio (%)Loan loss
31、cover (%)Loan loss rate (%)CAR (%)Avg asset yieldAvg funding costSpread,10,3005,8028,4197,6832,8984,7851,0303,7550.621.413.54.26832687121.134.852.3212.6145.71.416.96.902.904.01,10,2205,1957,7277,6882,7854,9031,1613,7420.621.413.84.32786672116.932.550.1222.9140.21.415.86.992.914.08,0.811.78.9-0.14.1-
32、2.4-11.20.40.00.0-0.3-0.075.92.24.22.32.2-5.2-0.35.50.01.2-0.08-0.01-0.07,9,1474,2726,3687,0523,7403,3112,8334780.080.21.94.24721561128.730.747.5304.1105.92.116.36.932.953.98,12.635.832.29.0-22.544.5-63.6685.8672.61.211.60.0215.422.6-7.64.14.8-27.9-1.539.8-0.70.6-0.02-0.050.03,39,95321,23630,79830,3
33、9011,38519,0064,38014,6252.411.4513.554.29832.26687.16121.1233.4350.3321.292.56145.731.4716.946.942.914.03,37,46517,84027,47727,82812,21415,6146,3509,2641.531.029.204.49721.37560.54128.6931.0849.6829.544.09105.901.7816.296.762.494.27,6.619.012.19.2-6.821.7-31.057.957.80.44.4-0.215.422.6-7.62.30.7-27
34、.9-1.539.8-0.30.60.20.4-0.2,Source: Company data, HSBC estimatesBank of Ayudhya Change in earnings estimates_ 2013e _ _ 2014e _,FY Dec (THBm)Interest incomeInterest expenseNet int incNon-int incOperating incOperating costsPPoPProvision chargesExceptionalsPre-tax profitTaxNet profitCore earningsLoan
35、growth (%)NIM (%)Fee income (%)Non-II (%)Cost-to-income ratio (%)Credit costs (%)Eff tax rate (%),Previous72,146(28,999)43,14722,17565,321(31,752)33,569(12,400)-21,169(3,850)17,31917,3198.0%4.31%13.0%10.0%48.6%1.49%18.0%,Current73,201(29,857)43,34423,78467,128(33,262)33,866(12,000)-21,866(3,979)17,8
36、8717,88711.0%4.23%15.0%12.0%49.5%1.37%18.0%,% chg1%3%0%7%3%5%1%-3%NM3%3%3%3%3%-8 bps2%2%94 bps12 bps0%,Previous80,094(33,394)46,70024,61471,314(34,292)37,022(13,200)-23,822(4,327)19,49419,4948.0%4.33%15.0%11.0%48.1%1.47%18.0%,Current80,349(34,027)46,32226,63872,960(35,923)37,038(12,300)-24,738(4,496
37、)20,24120,2418.0%4.19%15.0%12.0%49.2%1.28%18.0%,% chg0%2%-1%8%2%5%0%-7%NM4%4%4%4%0%14 bps0%1%115 bps-19 bps0%,Source: Company, HSBC estimates4,Bank of Ayudhya (BAY TB)Commercial Banks21 January 2013Change in GGM assumptions,Previous,Current,abc,Risk-free rateRisk premiumBetaCost of equitySustainable
38、 RoELT growthFV PBV (x)2013E BV (THB/sh)FV (THB/sh)Source: HSBCThai Banks coverage valuation summary,4.5%6%1.111%13.2%7%1.620.732.7,4.5%6%1.111%14.5%7%1.720.835.7,Bank,Rec Current Priceprice target,Potlreturn,_ PBV (x) _ _ RoE (%) _,_ PE (x)_,Div yield (%)_ Mkt cap Avg trdg(USDbn) value,(USDm),12E,1
39、3E,12E,13E,12E,13E,12E,13E,BBL*KBANK *KTBSCBBAY*TCAP,OWOWOWOWNUW,194.50 243.00191.5 258.0020.70 20.40172.00 199.5032.70 35.7037.50 36.50,24.936.92.718.611.60.5,1.22.11.62.71.61.1,1.11.81.42.31.41.0,13.222.116.120.514.913.6,13.121.216.821.915.113.7,9.810.311.514.211.18.8,9.19.09.011.59.87.9,3.52.23.0
40、2.32.63.2,3.92.54.12.63.33.2,12.515.47.819.66.71.7,31.730.522.228.915.711.9,Sector avg,1.9,1.7,16.5,17.4,12.3,10.4,2.7,3.1,Source: Company data, HSBC estimates, Priced as of market close 17 January, 20138The estimates of BBL, KBANK, BAY are of 13E/14E5,Bank of Ayudhya (BAY TB)Commercial Banks21 Janu
41、ary 2013Valuation and risksBank of Ayudhya (BAY TB, Neutral): Wevalue BAY at THB35.7 (Previously 32.7) using aGordon Growth Model (GGM). Our assumptionsinclude a 14.5% sustainable ROE, 10.9% cost ofequity and 7.0% terminal growth rate. Our targetprice implies a 2013e PB of 1.7x.Under HSBCs research
42、model, for Thai stockswithout a volatility indicator, the Neutral band is 5percentage points above and below the hurdle rateof 10%. This translates into a Neutral band of 5%to 15% around the current share price. Our targetprice implies a potential return of 11.6%(including the dividend yield), which is within theNeutral band, and we therefore upgrade the stockto Neutral. Potential return equals the percentagedifference between the current share price and thetarget price, including the forecast dividend yieldwhen indicated.6,
