Equity Analysis /
Thailand

Siam Commercial Bank PCL/The: Unleashing the power within

  • How did we arrive at our SCBX target price?

  • New businesses will add to earnings; some may scale up fast

  • 2022 outlook for SCB’s core banking operation

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
27 April 2022

New businesses—quality earnings and platform-based ventures, such as the pending Bitkub deal—will add substantially to SCBX’s long-term earnings growth, we believe. But we now assume that the Bitkub deal will be sealed in Jul (not Jan 2022). Hence, our 2022 NPAT forecast downsizes 1.3% to Bt40.4bn and our YE22 target price slips from Bt146 to Bt141 (an implied PBV of 1.01x)—core banking operation value Bt110; value of new ventures Bt31.

How did we arrive at our SCBX target price?

We used a sum-of-the parts valuation to determine our YE22 target price of Bt141 (a PBV of 1.01x)—78% bank (a YE22 PBV of 0.9x indicated value/share of Bt110) and 22% non-core businesses (a mean 2022 PER of 25x indicated value/share of Bt31). Of our SCB group 2022 earnings forecast, we expect 89% to come from the bank and 11% from new businesses.