SET100 earning outlook

1
Banking (Neutral) con

• Key catalysts
• The BOT forecasts FY08 GDP growth at 4.30-4.80.
  
• Rising consumer confidence drives consumption and
  loan demand. Mass transit projects will boost
  loan demand in late FY08.
• Operating efficiency has increased, so price
  leadership going forward is likely.
• There has been a substantial drop in loan loss
  provisions after all banks met IAS39 requirements
  at YE07.
• CDO exposure is minimal.
• Risks
• Regulatory risk/delays to government setting up.
• Recession in US hits exports.

Figure 1 Consumer Confidence Index
Figure 3 CPI Core CPI
Figure 4 GDP loan growth (excluding AMCs)
Figure 2 Capacity utilization ()
Sources Company, ISIT, Reuters, Bloomberg,
Bualuang Research
2
Banking (Neutral)

• Key catalysts
• Aggregate 3Q07 NPLs totaled 8 of loans with an
  average 63 loan loss coverage ratio.
• NIM is expected to drop as competition heats up
  due to banks hustling to sustain loan growth.
• Strong CARs for most Thai banks.
• Risks
• Regulatory risk/delays to government setting up.
• Recession in US hits exports.

Figure 5 NPL movement since FY01-3Q07
Figure 6 Interest spread of large sized banks
Figure 8 Net loan growth in Nov-07
Figure 7 Capital adequacy ratio () as of 3Q07
Sources Company, ISIT, Reuters, Bloomberg,
Bualuang Research
3
Kasikorn Bank Plc (BUY)

• Stock rating BUY
• Target Price Bt97.00
• Key catalysts
• Expect 10.5 loan growth.
• Emphasis on demand for micro- and SME-credit.
• Highest interest spread.
• Low NPLs at 6.3 with 71 loan loss coverage
  ratio.
• Fully complied with IAS39. Strong CAR of 15
• Risks
• Competition.
• Hiking OPEX from cost overruns in
  K-Transformation.
• Future NPL trends.

Figure 1 Loan breakdown ()
Figure 3 Highest interest spread ()
Figure 4 Financial statement (Btm)
Figure 2 CAR, FY03-3Q07 ()
Sources Company, ISIT, Reuters, Bloomberg,
Bualuang Research
4
TISCO Bank Plc

• Stock rating BUY
• Target Price Bt37.00
• Key catalysts
• Expect 19 loan growth with improving new car
  sales after election.
• An HP leader with a 15 market share.
• Sustainable interest spread at 3.5 in FY07-08
• Low NPLs at 3.9 with 77 loan loss coverage
  ratio.
• Adequate CAR at 14.3. High dividend yield.
• Risks
• Stiff competition.
• Aggressive spending on branch network.
• High cost of deposits versus competition, which
  is mostly big banks.

Figure 1 Loan breakdown ()
Figure 3 New automobile sales (unit)
Figure 4 Financial statement (Btm)
Figure 2 CAR, FY03-3Q07 ()
Sources Company, ISIT, Reuters, Bloomberg,
Bualuang Research
5
Krungthai Card Plc

• Stock Rating BUY
• Target Price Bt32.00
• Key catalysts
• Pure consumer play with high loan growth (expect
  19 in FY07 and 17 in FY08)
• Strong support from KTB, the largest stat-owned
  bank
• Stable interest spread at 19 in FY07-08
• Good control of NPLs 3.5 with 73 loan loss
  coverage ratio.
• High capital base to total assets ratio15
  (with low D/E ratio of 5.7X)
• Risks
• Stiff competition.
• Aggressive spending on branch network.
• High cost of deposits versus competition, mostly
  big banks.

Figure 1 Loan breakdown ()
Figure 3 Composition of balance sheet (Btm)
Figure 4 Financial statement (Btm)
Figure 2 Funding MIX, FY03-3Q07 ()
Sources Company, ISIT, Reuters, Bloomberg,
Bualuang Research
6
Disclaimer
This document was produced based on sources
believed to be reliable, but their accuracy,
completeness and correctness can not be
guaranteed. The statements or expressions of
opinion herein were arrived at after due and
careful consideration for use as information for
investment. Expressions of opinion contained
herein are subject to change without notice. This
document is not, and should not be construed as,
an offer or the solicitation of an offer to buy
or sell securities. The use of any information
shall be at the sole discretion and risk of the
user. BUALUANG SECURITIES PUBLIC COMPANY LIMITED
(BLS) is a subsidiary of BANGKOK BANK PUBLIC
COMPANY LIMITED (BBL). Because of that fact, BLS
can not provide any recommendations or produce
any research reports on BBL. SET regulations
limit the scope for Thai-registered stockbrokers
to issue research on parent company.