Earnings Report /
Thailand

Next Capital: Deep miss! LLPs were heavier than assumed

  • Earnings were 29% below our expectation

  • NCAP posted a 1Q22 profit of Bt65m

  • Lending jumped by 63.9% YoY and 18.8% QoQ for the quarter

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
12 May 2022

We have a BUY call on NCAP, premised on strong lending and earnings expansion (despite deteriorating asset quality). Because we have cut our 2022 profit forecast, our YE22 target price downsizes from Bt10 to Bt8.40, pegged to a PEG ratio of 1.1x (average 2023-24 earnings growth of 30.2%).

Earnings were 29% below our expectation

NCAP posted a 1Q22 profit of Bt65m, down by 12.8% YoY and 25.8% QoQ. The result was 29% below our projection (and 27% shy of the Bloomberg consensus), due to heavier LLPs than expected (we had assumed Bt102m; NCAP set Bt157m). 1Q22 earnings comprise 16% of our old full-year forecast of Bt417m.