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Thanachart Capital PCL (SET:TCAP), 18.88% stake owned by Thai NVDR Co., Ltd. and 10.77% stake owned by MBK PLC (SET:MBK), as of October 11, 2016, is the parent company of Thanachart Financial Conglomerate. The company has two core business groups, which are financial business group, consisting of commercial banking business, asset management business, securities business, insurance business, hire purchase business, and leasing business, and supporting business group, consisting of brokerage business, service business, and training business, which Thanachart Bank PCL (SET:TBANK) is the main operating business.
According to the Financial Times, the company’s subsidiaries comprise Thanachart Bank PLC, which is 49% owned by Scotiabank, NFS Asset Management Co., Ltd., Siam City Life Assurance PLC, Max Asset Management Co., Ltd. and NASSET Property Fund 6.
Thanachart Capital said on October 17 that its third-quarter 2016 revenues were up 3.68% year-on-year to 10.26 billion baht, beat the 9.97 billion baht consensus estimate of two analysts following the company, according to the Financial Times. TCAP posted third-quarter 2016 earnings of 1.29 baht per share, up 11.21% year-on-year, but missed the 1.31 baht per share expectations of three analysts covering the company.
The company said the non-performing loans (NPLs) of Thanachart Group declined 16.85% or 3.805 billion from the end of last year to 18.776 billion baht as of September 30, 2016. As a result, NPL ratio decreased to 2.56%, while coverage ratio improved to stand at 132.94%. To strengthen financial position and to be cautious against the economic uncertainties and new regulations, the bank set aside its allowance for impairment loss on loans and debt securities, or loan-loss provisions, of 1.47 billion baht for the quarter, compared to 1.17 billion last quarter, an increase of 25.32%.
For 2015, TCAP reported a dividend of 1.80 baht a share, an increase of 12.5% from 2014. The 20 analysts polled by Financial Times covering the company expect dividends of 1.88 baht a share for the upcoming fiscal year, representing a year-over-year increase of 4.17%.
From our technical viewpoint, shares of TCAP have been trading in the range between 28 and 42.75 baht per share since 2010. TCAP shares were rejected at 42.75 baht head resistance level and are now bumping along the 50-day SMA. The next support level is 38 baht if the stock continues to pull back. TCAP could drop further to 30-35 baht levels if the 38 baht level can’t hold.
According to the Financial Times, the consensus amongst 23 polled investment analysts covering Thanachart Capital gave the company a Hold rating, with the median 12-month price target of 43.5 baht a share, as of October 14, 2016.
Disclosure: No position and no recommendation. |
