Equity Analysis /

TQM Corp PCL: Sustainable growth profile

  • New business—Easy Lending Co Ltd

  • Strong insurance premium expansion

  • Strong earnings growth outlooks for 2021 and 2022

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
26 November 2021

We attended TQM’s analyst meeting last week. The information we garnered supports our bullish view of the insurance broker’s prospects for business and earnings growth in 2021 and 2022. The drivers are existing products, new products, and a new lending biz. Our earnings forecasts are Bt905m for 2021, up 29% YoY, and Bt1.1bn fore 2022, up 23% YoY. BUY!

New business—Easy Lending Co Ltd

The lending biz started operating in 4Q21. TQM targets Bt300m in loans for the quarter (an estimated saving of Bt20m on covering the credit card interest costs of clients in 2021; see next paragraph) and Bt1.5bn in 2022 (an estimated saving of Bt100m). The firm lent Bt100m in the first two months of the lending operation. We assume low credit risk, due to a fairly tight loan approval standard. Only about 100k of TQM’s clients (around 3%) pay insurance premiums with credit cards. We see scope for Easy Lending to become a future profit growth driver. Should it prove successful, we would expect the scope and scale of lending services to expand.