Results Review 9 Nov 2016

Please see disclaimer on last page 1

Muangthai Leasing PCL (MTLS)

Healthy loan expansion

► 3Q16 net profit surged 33.5% QoQ and 82.2% YoY to

Bt401mn. This beat both our estimate and the

Bloomberg consensus.

► Despite solid loan expansion, NPLs remained at a low

0.95%.

► We maintain our BUY recommendation with a 2017

target price of Bt28.00.

3Q16 net profit jumped both QoQ and YoY

MTLS reported a 3Q16 net profit of Bt401mn, up 33.5% QoQ and

82.2% YoY. This beat both our estimate and the Bloomberg

consensus by 16% and 21%, respectively. Our projection

overestimated the level of provision expense. The outstanding 3Q16

performance was attributed to its solid loan growth in tandem with

continuous branch expansion, especially in the Northeastern region.

In 3Q16, its number of branches surged to 1,515, from 1,236

branches in 2Q16. Meanwhile, lending increased 18.9% QoQ and

62.4% YTD. In terms of OPEX, the 3Q16 cost-to-income ratio

stayed at 48.6%, down from 49.3% in 2Q16 and 53.4% in 3Q15.

This suggests that the company was able to generate income at a

faster pace than its costs from branch expansion. Overall, 9M16

earnings made up 78% of our FY16 earnings estimate.

Healthy loan expansion

Although MTLS’ 3Q16 NPL ratio slightly increased to 0.95% from

0.94% in 2Q16, this is still low given its aggressive loan expansion

and the current economic environment. We believe one of the

reasons for this low NPL level is the company’s locally-penetrated

strategy allowing its staff to develop closer relationships and easily

track customers, hence better NPL management. MTLS aims to

continue its expansion strategy aiming to reach more of the

population still without access to the traditional banking system.

Specifically, it targets 1,600 branches in 2016 which we believe is

definitely achievable.

Maintain BUY recommendation

Given the promising growth prospects and strong asset quality, we

maintain our BUY recommendation with a 2017 target price of

Bt28.00. Our target price is based on a prospective PBV of 8.0x

(Gordon Growth Model) and long-term ROE forecast of 20%.

BUY

2017 TP: Bt28.00 Closing price: Bt19.40

Upside/downside 44.3%

Sector Finance & Securities

Paid-up shares (shares mn) 2,120

Market capitalization (Bt mn) 41,128

Free float (%) 20.07

12-mth daily avg. turnover (Bt mn) 147.56

12-mth trading range (Bt) 22.10/14.00

Major shareholders (%)

Mr. Chuchat Petaumpai 37.4

Mrs. Daonapa Petaumpai 34.0

Financial highlights

Source: SETSMART, AWS

Thailand Research Department

Mr. Warut Siwasariyanon,

License, No. 17923

Tel: 02 680 5041

Ms. Veeraya Rattanaworatip,

Assistant Analyst

2014 2015 2016E 2017E

Revenue (Btmn) 1,590 2,331 4,032 5,842

Net profit (Btmn) 544 825 1,252 1,707

EPS (Bt) 0.33 0.39 0.59 0.81

EPS growth (%) 49.6 16.6 51.7 36.4

P/E (x) 58.1 49.9 32.9 24.1

BVPS (Bt) 2.4 2.7 3.1 3.6

P/BV (x) 8.1 7.3 6.3 5.4

DPS (Bt) 0.13 0.20 0.30 0.41

Div. yield (%) 0.7 1.0 1.5 2.1

ROE (%) 15.5 15.3 20.6 24.3

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Results Review 9 Nov 2016

2

Figure 1: MTLS’ 3Q16 results review

Unit: Btmn 3Q15 2Q16 3Q16 %QoQ %YoY 9M15 9M16 %YoY

Net-interest income 532 826 994 20.4% 86.8% 1,378 2,523 83.1%

Non-interest income 84 106 119 12.4% 41.8% 246 321 30.5%

Net operating income 616 931 1,113 19.5% 80.6% 1,624 2,844 75.1%

Non-interest expense 329 459 541 17.8% 64.4% 897 1,392 55.2%

Pre-provision profit 287 472 573 21.2% 99.2% 727 1,452 99.8%

Provision expense (reversal) 13 106 77 -27.4% 514.4% -4 240 6525.4%

Pre-tax profit 275 367 496 35.2% 80.3% 731 1,212 65.9%

Net Profit 220 300 401 33.5% 82.2% 585 981 67.8%

EPS (Bt)* 0.10 0.14 0.19 33.5% 82.2% 0.28 0.46 67.8%

Source: Company data, AWS estimates

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Results Review 9 Nov 2016

3

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Results Review 9 Nov 2016

4

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CG Report

5

Score Range Number of Logo Description

90 – 100

80 – 89

70 – 79

60 – 69

50 – 59

Below 50

No logo given

Excellent

Very Good

Good

Satisfactory

Pass

N/A

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2015.

Corporate Governance Report disclaimer

The disclosure of the survey result of the Thai Institute of Directors

Association (“IOD”) regarding corporate governance is made pursuant

to the policy of the Office of the Securities and Exchange Commission.

The survey of the IOD is based on the information of a company listed

on the Stock Exchange of Thailand and the Market for Alternative

Investment disclosed to the public and able to be accessed by a

general public investor. The result, therefore, is from the perspective of

a third party. It is not an evaluation of operation and is not based on

inside information.

The survey result is as of the date appearing in the Corporate

Governance Report of Thai Listed Companies. As a result, the survey

result may be changed after that date, Asia wealth Securities Company

Limited does not conform nor certify the accuracy of such survey result.

Please see disclaimer on last page

CG Report

6

ขอมล Anti-Corruption Progress Indicator ของบรษทจดทะเบยน

ระดบ 1ACD AEONTS AFC AIRA AJ ALUCON AMC AQUA ARIP AUCT BAT-3K BIG BJCBLISS BMCL BOL BRR BSBM CBG CCET CCN CGD CMR CPH CSC CSPCTW DCON DRACO DSGT DTCI E EMC ESSO FOCUS FSMART GIFT GLANDGRAND GUNKUL HFT HTECH IHL ILINK ITD JSP KDH KTIS KTP LEE LSTMAJOR MATCH MAX M-CHAI MDX MIDA ML MPIC NC NEP NNCL NWR OHTLPICO PK PL PPM PRAKIT PRECHA PRIN PSTC PYLON RAM RICH RS SANKOSAUCE SAWAD SAWANG SCN SEAFCO SF SHANG SIRI SMART SMM SOLAR SPACK SPGSPPT SPVI STA STAR SVH SVOA SWC TAPAC TC TCCC TCJ TCOAT THTKS TNH TNPC TPA TPAC TPOLY TRC TRUBB TSE TTA TTI TTL TTTMTWP TWZ U UMS UPA UPOIC UTP UVAN VARO VI VIBHA VIH VTEWG

ระดบ 22S ABICO AF AKP AMARIN AMATA AOT APCO AYUD BEAUTY BFIT BH BKDBLAND BTNC CCP CI CSR CSS EFORL EPCO FE FNS FVC GEL GLOBALHEMRAJ IEC IFS INET JUTHA KASET KCAR KKC KSL L&E LALIN LTX MMALEE MBK MBKET MEGA MK MPG MTLS NCH NCL NPP OCC OCEAN PBPCA PRINC QH ROCK RPC S&J SGP SIAM SIS SKR SMG SMIT SORKONSUSCO TAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPP TRT TRU TRUETSC TSI TTW TVD TVO UKEM UNIQ UWC VNG WIIK WIN XO

ระดบ 3AABC ACAP ADVANC AEC AGE AH AIE AMANAH ANAN AP APCS APURE ASASIA ASIAN ASIMAR BIGC BROOK BTS BWG CEN CENTEL CFRESH CHARAN CHO CHOTICM CNT COL CPALL CPF CPI CPL DELTA DEMCO DIMET DNA DTAC EAECF EE EVER FPI GBX GC GFPT GLOW HMPRO HOTPOT ICC ICHI IFECINOX INSURE IRC JAS JTS JUBILE KC KTC KYE LHK LPN LRH MAKROMC MCOT MFC MFEC MINT MJD MONO MOONG NBC NDR NINE NMG NSINTV OGC PACE PCSGH PDI PG PHOL PLAT PPS PR PRANDA PREB PSQLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOIL SE-ED SENA SINGERSITHAI SMK SMPC SPALI SPC SPCG SPI SRICHA SSI STANLY SUPER SVI SYMCSYNEX SYNTEC TASCO TCMC TFI THAI THRE THREL TICON TKT TLUXE TNL TPCORPTMILL TMT TSTE TSTH TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHAZMICO

ระดบ 3BAAV AHC AI AIT AKR ARROW ASK BA BDMS BEC BECL BJCHI BUICGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASON EPG F&DFANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMY HYDRO IRCP IT JCTKCM KWC LH LIT LOXLEY MACO MANRIN MATI MODERN MSC NOBLE NOK NPKNUSA OISHI OTO PAF PAP PATO PF PJW PLANB PLE POLAR PRG PTLQ-CON QTC RCI S11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIMSLP SMT SPA SPORT SSC SST STEC STPI SUC SUTHA T TAE TBSPTCC TFD TGCI TGPRO THANA THIP TIW TK TMW TNDT TOPP TPC TPCHTPIPL TSR TT TYCN UAC UBIS UEC UMI UP UPF UT UV VPOWAVE WINNER YUASA

ระดบ 4ASP BAFS BANPU BAY BBL BKI BLA CIMBT CNS CSL DCC DRT DTCEASTW ECL EGCO ERW FSS GCAP HANA HTC INTUCH IRPC IVL KBANK KCEKGI KKP KTB LANNA LHBANK MTI NKI PSL PTG PTTEP SABINA SCB SNCSNP SSF SSSC TCAP THCOM TISCO TIMB TMD TNITY TOG

ระดบ 5BCP CPN GYT PE PM PPP PT PTT PTTGC SAT SCC THANI TOP

ไมเปดเผยหรอไมมนโยบายA ACC AJD AQ BCH BGT BROCK BSM BTC CHUO CPR CRANE EICFER JMART JMT KAMART KBS KIAT LDC MBAX MCS METCO NEW NEWS NYTPAE PDG PERM PMTA POST RCL RICHY ROH S SIMAT TCB TR TSFTVT WORKหมายเหตระดบ 1 : มนโยบายระดบ 2 : ประกาศเจตนารมณระดบ 3 : มมาตรการปองกน ซงทง 2 กรณ ถอเปนผลการประเมนในระดบเดยวกน

3A : บรษทมการประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค3B : บรษทมค ามน และนโยบายของบรษท แตมไดประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค

ระดบ 4 : ไดรบการรบรองระดบ 5 : ขยายผลสผท เกยวของ

Contact/Disclaimer

This Report has been prepared by Asia Wealth Securities Company Limited (”AWS”). The information in here has been obtained from sources believed to be reliable and accurate, but AWS makes no representation as to the accuracy and completeness of such information. AWS does not accept any liability for any loss or damage of any king arising out of the use of such information or opinions in this report. Before making your own independent decision to invest or enter into transaction, investors should study this report carefully and should review information relating. All rights reserved. This report may not be reproduced, distributed or published by any person in any manner for any purpose without permission of AWS. Investment in securities has risks. Investors are advised to consider carefully before making investment decisions.

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