Bank

28,488 bookings in 6 days

Bank - Car Hiire Purchase

Aggressive car bookings of 28,488 units in first 6 days, very likely to break target

From Motor Expo 2012 during the first 6 days (29 November - 4 December

2012), the number of car bookings has reached 28,488 units or 5% growth

from the same period of Motor Expo 2011. The total car bookings (until the

last day on 10 December 2012) are projected to stand at a high level of

60,000 units, breaking the target of 50,000 units. For the first 5 brands with

highest car bookings, there are Honda (6,491 car bookings, or 22.8% of total

bookings), Toyota (6,122 car bookings, or 21.5% of total bookings), Nissan

(2,766 car bookings, or 9.7% of total bookings), Isuzu (2,513 car bookings,

or 8.8% of total bookings) and Mazda (1,863 car bookings, 8.5% of total

bookings). The impressive number of car bookings is due to car makers'

release of new models. The highlight is on Honda with the opening of Brio

Amaze (4-door eco car) that has boosted car bookings of Honda to stand

higher than all other peers. Combined with the tax deduction policy for first

car purchase (B100,000 at maximum/car), auto hire-purchase entrepreneurs

of commercial banks under our coverage (TCAP, SCB, BAY, TISCO, and KK)

would benefit considerably. Accordingly, these commercial banks' 4Q12 net

loans are projected to be the peak of the year, likely to be boosted until 1H13

with the support from the growth of domestic car sales that would accelerate

due to Motor Expo 2012. Previously, we've reported about the accumulative

domestic car sales during 10M12 that have hit the new record high at 1.14

million units or 59.9% growth from the same period of prior year, considered

88% of FY2012 car sales expected by the market at 1.3 million units.

Advantages for auto hire-purchase sector during 4Q12-1H13…

TCAP benefits most

The abovementioned event would be beneficial for auto hire-purchase entrepreneurs of the commercial banks under our coverage which are TCAP,SCB, BAY, TISCO and KK. The growth of net loans of these banks is projected to speed up even more during 4Q12, especially for TCAP that would benefit the most from the event as it captures 30% market share of the new car hire-purchase market. This reflects from TCAP's growth of auto hire-purchase loans during the past 2 quarters which is higher than the sector's average by 4% QoQ in each quarter. In 4Q12, we believe that TCAP's aggressive growth of loans would reach the peak of the year with the support from stronger capital base after selling of TLife which has urged the company to return to aggressive growth. Moreover, there's an issue about share repurchase of not over 10% of TCAP's current total paid-up shares, reflecting the company's solid capital base which would substantially help raise confidence toward the growth of net profit after selling of life insurance business.

"Overweight", still choosing TCAP as top pick of mid-cap banks

We maintain "Overweight" for the commercial bank sector, still choosing TCAP as a top pick of the mid-cap banks which is already free from concerns toward capital raising. Furthermore, 2013 PBV and PER are low at only 0.9x and 7.7x respectively. In addition, there is also 33% upside from the current share price

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Article source: http://www.thethailandlinks.com/2012/12/06/bank/