4Q24: Miss on opex; okay dividend yield
Worse than expected on opex (mainly loss on repossessed assets), 4Q24 results reflected easing credit cost and NPL inflow, a contraction in loans, stable NIM and a sharp rise in cost to income ratio (from loss on repossessed assets). We cut our 2025F earnings by 16% and now expect 5% growth in 2025F from lower credit cost and less loss on repossessed assets. THANI announced a DPS on 2024 of Bt0.07 (54% payout ratio), equivalent to 5.8% dividend yield. We upgrade to Neutral after a 44% fall in share price over the past twelve months. However, we cut TP to Bt1.3 (based on 0.6x PBV for 2025F) from Bt1.7.
4Q24: Missed on opex. THANI reported 4Q24 earnings of Bt123mn (+54% QoQ, -24% YoY), 45% below our forecast due to higher opex than expected (loss on repossessed assets).
4Q24 highlights:
1) Asset quality: NPLs decreased 8% QoQ. If write-offs are added back, NPLs fell 2% QoQ vs a rise of 23% QoQ in 3Q24, indicating lower NPL inflow. NPL ratio fell 49 bps QoQ to 3.31%. Credit cost fell 99 bps QoQ to 2.22%. LLR coverage rose to 111% in 4Q24 from 93% in 3Q24. We expect credit cost to slip 4 bps to 2.15% in 2025.
2) Loan growth: -4% QoQ, -12% YoY. We expect loans to be flattish in 2025.
3) NIM: -1 bps QoQ (-10 bps YoY). Yield on loans rose 4 bps QoQ and cost of funds slipped 2 bps QoQ.
4) Non-NII: +4% QoQ (+11% YoY).
5) Cost to income ratio: +8.77 ppt QoQ (+17.38 bps YoY) to 39.72% due to a rise in opex (+26% QoQ, +64% YoY), largely losses on repossessed assets.
Cut earnings forecast. We cut our 2025 earnings forecast by 16% to factor in our upward revision of loss on repossessed assets. We now expect earnings to grow 5% in 2025, on lower credit cost and less loss on repossessed assets. We expect an ease in NPL inflow as result of a recovery in the construction sector after the government accelerated budget disbursement.
Okay dividend yield. THANI announced DPS on 2024 of Bt0.07 (54% payout ratio), equivalent to 5.8% dividend yield.
Upgrade to Neutral but cut TP. We upgrade to Neutral after a 44% fall in share price over the past twelve months. However, we cut TP to Bt1.3 (based on 0.6x PBV for 2025F) from Bt1.7.
Key risks: 1) Asset quality risk from an uneven economic recovery and the global economic slowdown, 2) higher losses on defaults from a fall in used truck prices, 3) downside risk on loan growth from falling truck sales and
4) ESG risk from market conduct.
