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www.kimeng.co.th
KELIVE
R E S E A R C H
January 13, 2004
Siam City bank Plc. (SCIB) NEW : BUY
PREVIOUS : -
BANKING Very impressive performance for first bank to announce 2003
results
Siam City Bank (SCIB) was the first bank to announce its full-year 2003 results yesterday
and the bank didn't disappoint. SCIB's bottom line exceeded market expectations, rising
309% yoy to Bt3.6bn. This was due to an extra interest payment from a major debtor (TPI),
Price Bt24.10 a small additional provision in 4Q03 and lower cost of funds.
Target Bt28.60 However, SCIB's book value per share declined from Bt16.72 at the end of September to
Bt15.44 in December. This was due to a mark down in its capital account of its surplus on
investment portfolio. We believe other banks will also need to make a similar mark down
from the decrease in market value in the bond market in the quarter.
We have turned more positive on SCIB shares this year due to the following factors:
1) SCIB is targeting aggressive loan growth in 2004. Excluding AMC notes, total loans
are projected to increase 30% or by Bt50-60bn.
2) SCIB's strategy is to further develop into a universal bank, in line with the financial
sector master plan.
3) There is the possibility of an early dividend payment in March 2004. Assuming a 40-
50% dividend payout ratio, we estimate dividends of Bt0.72 per share, representing a
dividend yield of 2.98% at the current share price.
4) SCIB still has relatively low NPLs and sufficient loan loss reserve.
5) Our projected 2004 net interest margin (NIM) has been increased to 2.27% due to
lower cost of funds, aggressive loan growth and increasing asset yields from converting
its AMC notes into actual loans.
6) We are forecasting SCIB to record earnings growth this year of 34% to Bt4.8bn.
Analyst: Mek Meksarikul
Tel : 0-2658-6300 Ext Given on the expected higher profitability and attractive share price, we reiterate our BUY
1560
E-mail:
recommendation on SCIB. We believe SCIB shares should trade around 1.7x projected
mek.m@kimeng.co.th 2004 book value, or approximately Bt28.60 per share.
Kim Eng Securities
SCIB January 13, 2004
Figure : SCIB earnings summary
FYE: Dec 2001 2002 2003 2004F 2005F
PPP (Btmn) 40,934 4,924 7,612 9,492 9,813
Net profit (Btmn) 38,075 882 3,606 4,833 5,115
PPP/share 19.86 2.33 3.60 4.49 4.64
EPS (Bt) 14.98 0.54 1.71 2.29 2.42
BVPS (Bt) 9.03 16.53 15.44 16.82 18.27
DPS - 0.20 0.72 1.04 1.10
P/PPP (x) 1.21 10.34 6.69 5.36 5.19
PER (x) 1.61 44.63 14.12 10.54 9.95
PBV (x) 2.67 1.46 1.56 1.43 1.32
Dividend yield - 0.83% 2.98% 4.31% 4.57%
ROE 476.4% 3.3% 10.7% 14.2% 13.8%
ROA 13.7% 0.2% 0.8% 1.0% 1.0%
Source: SCIB (historic), KELIVE (forecast)
Figure : SCIB Income Statement
2,001 2,002 2,003 2004F 2005F
Total interest & dividend income 11,060 16,501 17,077 19,425 20,173
Interest expense 9,074 10,674 8,356 8,617 9,010
Net interest & dividend income 1,985 5,827 8,722 10,808 11,164
Non-interest income 45,267 4,216 5,724 4,886 5,027
Non-interest expenses 6,318 5,119 6,834 6,203 6,377
Pre-provisioning profit (PPP) 40,934 4,924 7,612 9,492 9,813
Provisions -2,843 -4,041 -3,822 -4,000 -4,000
Net profit 38,075 882 3,606 4,833 5,115
EPS 14.98 0.54 1.71 2.29 2.42
Source: SCIB (historic), KELIVE (forecast)
Figure : SCIB balance sheet
2,001 2,002 2,003 2004F 2005F
Investment - net 51,005 92,665 102,545 106,571 113,292
Loans - net 207,977 327,684 313,760 309,924 311,123
Total assets 297,791 486,169 469,406 484,833 496,281
Deposit 262,151 422,549 406,862 422,323 448,507
Total liabilities 279,176 451,235 436,774 448,879 476,363
Paid-up capital 10,564 21,128 21,128 21,128 21,128
Shareholders' equity 18,614 34,934 32,632 35,532 38,601
Source: SCIB (historic), KELIVE (forecast)
Figure : SCIB ratio analysis and forecast assumptions
2,001 2,002 2003F 2004F 2005F
Net Profit Growth -622.68% -97.68% 308.97% 34.01% 5.84%
EPS Growth -523.94% -96.40% 216.09% 34.01% 5.84%
Net Interest Margin 0.72% 1.49% 1.83% 2.27% 2.28%
Loans to Deposits 79.93% 77.34% 79.22% 75.18% 71.85%
Loan Growth -4.93% 55.96% -1.36% -1.50% 1.50%
Deposit growth 12.56% 61.19% -3.71% 3.80% 6.20%
Non-Interest income growth 4634.27% -90.69% 35.77% -14.64% 2.88%
Operating expense growth -13.92% -18.98% 33.50% -9.24% 2.82%
Provision growth 3030.58% 42.15% -5.41% 4.66% 0.00%
Loans/funding 76.49% 75.16% 91.90% 91.90% 91.90%
PPP/share (Bt) 19.86 2.33 3.60 4.49 4.64
BVPS (Bt) 9.03 16.53 15.44 16.82 18.27
ROE % 476.43% 3.29% 10.68% 14.18% 13.80%
ROA % 13.71% 0.22% 0.75% 1.01% 1.02%
Source: SCIB (historic), KELIVE (forecast)
Kim Eng Securities
2
www.kimeng.co.th
KELIVE
R E S E A R C H
Singapore London New York Hong Kong
Kim Eng Securities Kim Eng Securities Kim Eng Securities USA Inc Kim Eng Securities
(Private) Limited (London) Limited (Member of the NASD) (Hong Kong) Limited
(Member of the SES) (Member of the FSA) 406, East 50th Street (Exchange Participant)
9 Temasek Boulevard 6th Floor, 20 St. Dunstan’s Hill New York, NY 10022 Room 1901, Bank of America
#39-00 Suntec Tower 2 London EC3R 8HY, UK U.S.A. Tower 12 Harcourt Road
Singapore 038989 Telephone: 20 7621 9298 Telephone: 212 688 8886 Central, Hong Kong
Telephone: 65 6336 9090 Dealers’ telephone: 20 7626 2828 Facsimile: 212 688 3500 Telephone: 852 2810 7755
Telex: KESECS RS 25871 Facsimile: 20 7283 6674 Telex: KIMEN HX 68698
& RS 21857 Facsimile: 852 2877 0104
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Malaysia Indonesia Philippines Thailand
Kim Eng Research Sdn Bhd PT Kim Eng Securities ATR-Kim Eng Securities, Inc. Kim Eng Securities (Thailand)
(Formerly known as 9th Floor, Deutsche Bank Bldg (Member of the PSE) Limited
Mutual Scope Sdn Bhd) JI. Imam Bonjol 80 17th Floor Tower One & (Member of the SET)
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Suite 16.02, 16th Floor Indonesia Ayala Triangle, Ayala Avenue 540 Ploenchit Road
Kompleks Antarabangsa Telephone: 62 21 3983 1360 Makati City, Philippines Bangkok 10330
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Taiwan
Yuanta Core Pacific Securities
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Taiwan
Telephone: 63 2 849 8888
Facsimile: 63 2 848 5738
This research report is prepared for general circulation. It does not have regard to the specific investment objectives, financial situation, or particular needs of
any specific person who may receive this report. The information contained herein is provided on the basis of information received or provided to us, but its
completeness and accuracy are not guaranteed. Opinions expressed in this report are subject to change without notice, and no part of this publication is to be
construed as an offer, or solicitation of an offer, to buy or sell any securities or financial instruments whether referred to therein or otherwise. We do not accept
any liability whatsoever whether direct or indirect that may arise from the use of information contained in this report, or a reliance on our opinion expressed in
this report. Kim Eng Securities (Thailand) Public Company Limited, its associates, directors, connected parties and/or employees may from time to time have
interests and/or underwriting commitments in the securities mentioned in this report.
Kim Eng Securities
