 2Q23 results (-60% QoQ, -28% YoY) showed QoQ lower brokerage income (due to a fall in daily market turnover) with lower investment income. Assuming an 85% payout ratio, we expect a dividend yield of 3.2% on 1H23 and 5.3% for 2023. We maintain Underperform with an unchanged TP of Bt10 (12x 2024F EPS). 2Q23: Weak as expected. Net profit fell 60% QoQ (-28% YoY) to Bt66mn in 2Q23, in line with our estimates. Brokerage income plunged 32% QoQ (-33% YoY) on a 25% QoQ plunge in daily market turnover (excluding proprietary trading) to Bt46.3bn with a 52 bps QoQ rise in brokerage market share and 2 bps QoQ slip in commission rate. Other fee income fell 15% QoQ (-29% YoY). Investment income fell 60% QoQ (+430% YoY). Expect decent dividend yield. Assuming an 85% payout ratio (the same as 2022), we expect MST to pay an interim DPS of Bt0.34 on 1H23 operations, translating to a dividend yield of 3.2%. For full-year 2023F, we expect a DPS of Bt0.57, translating to a yield of 5.3% Cut 2023F earnings forecast. We cut 2023F earnings by 25% due to a drop in daily market turnover from Bt60bn to Bt52bn (vs. Bt54bn YTD), a fall of 26% from Bt70.7bn in 2022. The lower brokerage income leads us to forecast a 39% fall in 2023F earnings (vs. -17% in 2022). For 2024F, we expect earnings to rise 21% as we expect a 15% growth in daily market turnover to Bt60bn. Maintain Underperform. We maintain our Underperform rating with an unchanged TP of Bt10 (12x 2024F EPS). Key risks: 1) a volatile capital market, 2) potential enactment of the Financial Transaction Tax at 0.055% for the first year and then 0.11% onward and 3) rising competition. |
