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Kasikornbank Pcl (SET:KBANK) is the fourth largest commercial bank in Thailand as measured by total assets, loans, and deposits with about 15% market share in Thailand. KBANK provides a broad range of commercial banking business, securities business, and other related businesses. The company said on January 21, 2016, that its fourth-quarter 2015 revenues were 36.35 billion baht, missing the 37.07 billion baht consensus estimate of 7 analysts, according to the Financial Times.
The company posted fourth-quarter 2015 net profits of 5.48 billion baht, a decrease of 4.49 billion baht, or 45.05% over the same quarter of 2014, citing an extraordinary expense. The fourth-quarter 2015 EPS came in at 2.29 baht, beating the 2.15 baht consensus estimate of 6 analysts. For the full year 2015, the net profit was 39.47 billion baht, a decrease of 14.47% over the previous year, while its non-performing loans (NPL) increased to 2.7% of total lending from 2.24% at the end of 2014. The next earnings announcement from KBANK, for the first-quarter 2016, is expected on April 21.
Earlier this week, KBANK said the bank was interested in providing loan guarantees to both True Corporation (SET:TRUE) and Jasmine International (SET:JAS), according to the Nation. In December, True Corporation and Jasmine International won the bidding war for the two 4G 900 MHZ spectrum licenses and would pay 76.3 and 75.67 billion baht, respectively. Jasmine International said at the time they had lined up 75 billion baht from a consortium of banks, one of which might be Bangkok Bank (SET:BBL).
It could be a race to the bottom though, as shares of True Corporation and Jasmine International are already traded near their 52-week lows. Investors have dumped shares in the mobile telecom sector on concerns that the companies may have overpaid for the licenses and that an escalation of a price war in the Thai mobile phone market could soon erupt. Advance Info Service (SET:ADVANC) said in a statement released after losing the auction in December that they withdrew from the auction because the price for a license had stretched beyond fair value.
From our technical viewpoint, shares of KBANK was trading at the top of the uptrend channel in a broadening top chart pattern. The stock began a pullback after hitting an all-time high of 252 baht a share in late November 2014. KBANK bounced off the 52-week low of 144 baht per share earlier this month, along with the SET Financials sector, and is now consolidating at around 160 baht a share. The stock’s next move could be a breakout of the trendline resistance of the descending wedge and head back to test the 225 baht a share level.
There could be a steep pullback if KBANK is unable to break out. The next technical supports are at 144 baht per share, or the base of the broadening top chart pattern, and at around 120 baht per share, or the lower trendline support of the channel.
According to the Financial Times, the consensus amongst 26 polled investment analysts covering Kasikornbank gave the company an Outperform rating, with the median 12-month price target of 187.50 baht a share.
Disclosure: No position and no recommendation. |
