Thanachart Capital PCL (TCAP): 3QFY17 profit hits record Bt1.8bn. October 19, 2017

3QFY17 profit beat forecast with new record of Bt1.8bn: TCAP slightly beat forecast with record profit of Bt1.8bn in 3QFY17 on bigger‐than expected gain on investments. In this period, the quarterly profit swelled 19% y‐y and 6.8% q‐q on higher investment gain and insurance income.

3QFY17 loans up, NPLs on steady decline: For the quarter, TCAP reported its loan book grew 0.7% q‐q, taking YTD loan growth to1.7% from end‐FY16. Much of the loan growth largely came from SME and retail loans, notably hire‐purchase loans, which grew sharply on the back of improved auto sales. On the other hand, NPLs remained on the decline, down from 2.26% in the previous quarter to 2.11% in this period.

FY17 profit intact, rating cut to ‘NEUTRAL’ with Bt50.00/share target price: We leave our FY17‐FY18 profit forecasts for TCAP unchanged. Even though we like TCAP in terms of its strong fundamental improvement, we reduce our rating on the stock to ‘NEUTRAL’ from ‘ACCUMULATE’ as current share prices have already exceeded our FY18 target price of Bt50/share.

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