Equity Analysis /

Ngern Tid Lor: Growth profile supported by digital transformation

  • Strong 2021-22 loan growth profile

  • Swift insurance premium sales growth

  • Low credit cost and cost/income ratio outlook

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
24 November 2021

We attended TIDLOR’s analyst meeting last week. The information we garnered supports our bullish view of the finco’s business and earnings growth prospects. Our profit forecasts are Bt3.2bn for 2021, up 32% YoY, and Bt3.8bn for 2022, up 18% YoY, led by loan growth, rising insurance premium sales, and a lower cost/income ratio. Also, TIDLOR’s planned collateralized lending biz could mean upside to our 2022 earnings projection. BUY!

Strong 2021-22 loan growth profile

Our loan growth assumptions are 15% YoY for 2021 and 13% YoY for 2022, supported by sales-point expansion (management expects to add more than 200 new sales points during this year for a total of 1,276), Bank of Ayudhya (BAY) branches, a telesales operation, and agents dedicated to HP-for-used trucks.

We expect the Ngern Tidlor card to lead loan growth—at end-Sep 2021 Ngern Tidlor accounts comprised 33.2% to TIDLOR’s client borrowing accounts (up from 14.2% at YE20) and loan drawdowns via ATM using Ngern Tidlor cards rose 103% YTD in 9M21. Note that management plans to launch a new collateralized lending business (but TIDLOR has no plans to start an HP-for-home appliances biz at this stage).