Equity Analysis /

Bangkok Commercial Asset Management PCL: 28% QoQ profit growth expected for 4Q21

  • 4Q21 earnings should be flattish YoY but up by 27.7% QoQ

  • Bottom-line of Bt2.8bn projected for 2022, up 19.2% YoY

  • Scope for upside to 2022 earnings

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
8 February 2022

BAM will post flattish YoY earnings for 4Q21, according to our model (but up 28% QoQ, led by accelerated cash collection, debt-restructuring, sales of NPAs, and lighter LLPs and OPEX). Looking ahead, planned JVs with commercial banks could make for upside to our 2022 profit forecast. We have raised our YE22 DCF-derived target price from Bt22 to Bt23.10, as we have cut our WACC assumption from 5.5% to 5.4%. BUY!

4Q21 earnings should be flattish YoY but up by 27.7% QoQ

Our 4Q21 profit estimate is B736m, flattish YoY but up 27.7% QoQ, led by non-NII (heavier NPA sales), accelerated debt-restructuring (management’s target of 3.5k persons for 2021), more assertive cash collection (we expect NPL cash collection to miss BAM’s target, but NPA cash collection and a fully operational Legal Execution Depart-ment will support cash collection), and lighter OPEX and LLPs. Furthermore, the firm has launched promotional prices for debtors aimed at accelerating settlement of NPLs. Management targeted acquiring new debtstock with a face value of Bt9bn during 2021, but we assume less than Bt5bn, as market supply was limited last year. In 9M21, BAM acquired new debtstock with a face value of Bt2.5bn at a cost of Bt1.2bn.