Equity Analysis /

Thailand: Finance - Keep calm and buy!

  • 3Q22 earnings projected to rise 45% YoY and 7% QoQ

  • Fourth-quarter is seasonal peak for cash collection

  • AMC’s fair values under base-case scenario

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
9 November 2022

We have BUY calls on both BAM and JMT, as we expect both companies to mark YoY profit growth for 3Q22, 4Q22, and 2023. The recent stock price falls of BAM and JMT open a window to take positions cheaply.

3Q22 earnings projected to rise 45% YoY and 7% QoQ

Our models for the two asset management companies (AMC) under coverage, BAM and JMT, point to an aggregate 3Q22 profit of Bt1.4bn, up 51% YoY, driven by higher interest income (enabled by debt stock expansion) and more assertive cash collection. BAM’s cash collection should have risen, as its distressed collateralized SME debtors will have benefited from the economic recovery. JMT’s cash collection should also have increased, as many of its distressed debtors (mostly credit card debts and personal loans) work in tourism-related fields, so their incomes should have broadly improved during recent months. Moreover, we expect BAM to mark gains on NPA sales and set lighter LLPs.