วันอังคารที่ 26 พฤษภาคม พ.ศ. 2552

Phillip Finance Stock Recommends Buy TISCO

Tisco Financial Group – TISCO

12-month target price : Bt13.30
Recommendation : BUY
Closing Price (12 Feb 09) : Bt9.70

Loans up 1.7% MoM and 25.5% YoY in Jan 2009
- Despite weakening economic conditions, loans grew 1.7% MoM and 25.5% YoY in Jan 2009, benefiting from sales at the Motor Expo in Dec 2008.

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- Deposits rose 3.70% MoM and 17.4% YoY. The loan to deposit ratio averaged 166.5%. Including borrowings, the L/D ratio stood at 100%.
- In our opinion, M&A should enable TISCO to see strong loan growth in 2009. We also expect TISCO to pay a dividend of between Bt0.66-Bt1.10/share from its 2008 earnings, translating into an attractive yield of 6.8-11.3%. We keep a BUY recommendation on TISCO with a price target of Bt13.30/share.

Loans and deposits up 1.7% and 3.7% MoM
TISCO posted sequential loan growth in the first month of 2009 despite weakening economic conditions. Loans grew 1.7% MoM and 25.5% YoY to Bt101.60b, benefiting from sales at the Motor Expo in Dec 2008. Deposits rose 3.7% MoM and 17.4% YoY to Bt61.03b. The average loan to deposit ratio fell slightly from end-Dec 2008 to 166.5%. Including borrowings, the L/D ratio slipped to 100% at end-Jan 2009. The excess reserve ratio was 26.3%. The NPL coverage ratio was 62.5%. Gross NPLs were 2.24% of loan portfolio or Bt2.57b.

M&A bodes well for strong loan growth in 2009
We maintain our view that growth in hire purchase loan portfolio this year will come from acquisition of a 49% stake in Tokyo Leasing and a buyout of Primus Leasing Co, primarily engaged in hire purchase and wholesales financing services for Ford, Mazda and Volvo with total assets of about Bt8.5b. We forecast a 10% growth in hire purchase lending, similar to general loans this year. Net interest margin (NIM) should stabilize on cost management. Loan-loss provisions are expected to edge up along with loan growth. We also expect a sequential growth in fee income. Effective tax rate would return back to the normal level of 30%. On this basis, we estimate TISCO's 2009 net profit to be about Bt1.60b, down 6.8% YoY. Our price target of Bt13.30/share is equivalent to a P/BV of 0.8x (ROE of 12.3%). We keep a BUY recommendation on TISCO. We also expect TISCO to pay a dividend of between Bt0.66-Bt1.10/share from its 2008 earnings based on a 30-50% payout ratio. Despite lower payout ratio, dividend yield is still attractive at 6.8-11.3%.

By Phillip Securities (Thailand) Plc. on Feb 13, 2009

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