We have upped our 2022 profit forecast by 4% to Bt7.2bn to factor in a stronger loan growth assumption (heavy credit card spending, personal loan expansion, and the launch of a new product—title loans). Our YE22 target price upsizes from Bt57 to Bt67, pegged to justified PER of 24x. Hence, our call shifts up from SELL to BUY.
Fact 1: Strong credit card spending and personal loan expansion
Our model now assumes that in 2022 credit card spending will rise by 10% YoY (in line with management’s target) and personal loans by 5% YoY (below KTC’s target of 7% YoY), led by economic recovery—we don’t expect any further lockdowns (although COVID-19 infections are rising, hospitalization and mortality rates are low) and govt stimulus is boosting consumption and domestic tourism (such as Shop Dee Mee Kuen and Rao Tiew Duay Kan phase 4, etc). Moreover, the historical record indicates that consumer loan demand tends to expand during periods of elevated inflation.