SCB X Overview

Date: October 21, 2024
Broker: CGS International Securities

Financial Performance

• 3Q24 Net Profit: THB 10.9 billion
  • Year-on-Year Growth: +13.2%
  • Quarter-on-Quarter Growth: +9.3%
  • Comparison to Consensus Forecast: 6.6% above Bloomberg consensus, 8.8% higher than internal estimates.
• 9M24 Net Profit: THB 32.2 billion
  • Year-on-Year Change: -0.9%
  • Contribution to FY24 Forecast: 76.3%

Operating Metrics

• Pre-Provision Operating Profit Growth: -0.7% YoY, flat QoQ in 3Q24.
• Loan Growth:
  • YoY: -0.6%
  • QoQ: -0.2%
  • Compared to End-2023: +0.3%
• NPL Ratio: 3.9% (unchanged QoQ).
• NPL Coverage Ratio: 164%, up from 162% in 2Q24.
• Net Interest Margin (NIM): Flat at 4.08% in 3Q24.

Income Breakdown

• Non-Interest Income Growth: -18.2% YoY, -9.5% QoQ in 3Q24.
• Net Fee Income Growth: -4.9% YoY but +2.8% QoQ.

Dividend and Valuation

• Dividend Yield: Expected to be between 9.1% and 9.7% p.a. for FY24F-26F.
• Target Price: THB 111 (based on 0.76x P/BV).
• Current Price: THB 110.0
• Market Capitalization: US$ 11,176 million (THB 370,382 million).

Analyst Rating

• Recommendation: Hold
• Consensus Ratings:
  • Buy: 13
  • Hold: 12
  • Sell: 3

Risks and Opportunities

Downside Risks:

• Potential spike in NPLs for housing and unsecured loans.
• Sluggish fee income growth.

Upside Risks:

• Stronger-than-expected loan growth in 2H24F, particularly in large corporate segments.
• Effective cost-saving initiatives that could lower the cost-to-income ratio.

ESG and Sustainability

• ESG Combined Score: A- (LSEG ESG Scores, 2023).
• Sustainability Goals: Targeting net zero emissions for operations by 2030 and for lending/investment by 2050.
• Financial Support for Climate Projects: Aiming to provide THB 100 billion by 2025 to support businesses mitigating climate change.

This comprehensive overview encapsulates the key details for SCB X as provided in the report.