Our BUY call is premised on loan growth (driven by the corporate and retail portfolios), lighter LLPs, ongoing non-NII expansion (led by stronger brokerage, wealth, and retail biz fee income), and a high dividend yield of 4.7% for this year. Because we have raised our 2022 profit forecast, our YE22 target price increases from Bt78 to Bt80, pegged to a PBV of 1.22x (KKP’s long-term mean is 1.1x). There would be scope for upside to our earnings projection if KKP were to set lighter LLPs and/or achieve stronger loan growth than we currently assume.
Result was far above our expectation
KKP posted 1Q22 earnings of Bt2.1bn, up by 41% YoY and 2% QoQ. The result beat our projection by 30% (and the Bloomberg consensus by 20%), due to substantially higher non-NII than expected (we had assumed non-NII of Bt1.8bn; the bank reported Bt2.2bn). The 1Q22 profit comprises 29.7% of our old full-year forecast of Bt6.9bn.