Our 1Q22 profit estimate is Bt92m, up by 23% YoY and 5% QoQ, and we have upped our 2022 earnings projection by 2.9% to Bt417m (up 34% YoY), as we have cut our interest expenses assumption by 10% (due to a Bt2bn capital increase planned for 2Q22). The profit drivers are loan growth and a lower cost/income ratio. Our new YE22 target price is Bt10, pegged to a fully-diluted PEG ratio of 1.1x. BUY!
1Q22 profit to mark a rise of 23% YoY and 5% QoQ
We expect NCAP to report 1Q22 earnings of Bt92m, up 23% YoY, led by strong loan growth (we assume lending expansion of 44% YoY), a lower cost/income ratio (we anticipate a decline from 41.7% in 1Q21 to 40.8%, due to higher operating income), higher non-NII (higher loan-related fee income), and a lower mean credit cost peg (we expect it to mark a slight decline from 7.6% in 1Q21 to 7.3% in 1Q22). The finco has been building market share in HP-for-motorbikes space by cultiv-ating partnerships with dealers and piggy-backing dealers that open branches in new locations. In QoQ terms, NCAP’s 1Q22 profit looks set to rise 5% QoQ, due to lighter OPEX and loan growth.