Equity Analysis /

Ngern Tid Lor: YoY & QoQ earnings growth lined up for 2Q22, despite heavier LLPs

  • 2Q22 profit to mark a rise of 22.8% YoY (and 1.6% QoQ)

  • 3Q22 NPAT to expand YoY and QoQ

  • Bottom-line of Bt3.96bn forecast for 2022, up 24.8% YoY

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
5 August 2022

TIDLOR looks set to expand business and profits through 2022, despite heavier LLPs. The drivers are sales point expansion and the IT platform (Ngern Tidlor Card, use of AI to acquire new clients, and the insurance brokerage biz). Our earnings projections are Bt955m for 2Q22, up by 23% YoY and 1.6% QoQ, and Bt3.96bn for 2022, up 25% YoY, led by loan growth, rising insurance premium sales, and a lower cost/income ratio.

2Q22 profit to mark a rise of 22.8% YoY (and 1.6% QoQ)

We estimate 2Q22 earnings of Bt955m, up by 22.8% YoY (and 1.6% QoQ), even though the effective interest rate for four-wheeled title loans (cars and pick-ups) was cut by 3% (TIDLOR launched a promotional rate, effective March 31 through May 2022). The drivers of the modeled bottom-line expansion were lending (supported by ongoing sales-point expansion, up 198 sales points YTD), a fatter NIM, non-NII growth, and a lower cost/income ratio (we assume 56.6% for 2Q22, down from 58.0% in 2Q21), led by higher operating income.