海峡谈话：时尚银行

Disclosures & Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. MCI (P) 094/06/2016 MCI (P) 085/06/2016 MCI (P) 126/02/2017 Issuer of report: The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch View HSBC Global Research at: https://www.research.hsbc.com   ASEAN banks have outperformed their local index YTD  Despite the share price run-up, banks still offer value  Banks which offer value and where we have Buy ratings are Metrobank, Krung Thai Bank, and Siam Commercial Bank ASEAN banks outperforming the index It is often said that a rise in the index has to have the banks moving alongside it, if not lead, given the sector’s size and influence on the index. In this regard, banks have generally outperformed their local index both on a year-to-date basis and from the inception of the year-end 2016 rally. On a year-to-date basis, the banks under our coverage which have outperformed their local index the most are Danamon, CIMB, Bangkok Bank, AMMB, and Krung Thai Bank (KTB). The banks have outperformed generally because they were cheap when they were near trough valuations, and they are seen as potential restructuring plays (with the exception of Bangkok Bank) that would benefit from a recovery in the economy, or simply as beta plays. Value to be had With banks generally outperforming its local index year-to-date, the question on valuations often gets raised. Despite the share price run-up, we believe most banks still offer value as reflected by their share prices still trading below their historical PE mean. We note that 13 banks under our coverage are still trading below their historical PE mean. However, in the absence of a fundamental catalyst, we believe value stocks risk becoming value traps. In this regard, we narrow our preferred picks to three Buy-rated banks which we believe still offer value: Metrobank (MBT), Krung Thai Bank, and Siam Commercial Bank (SCB). 13 March 2017 Ismael Pili* Head of ASEAN and South Asia Equity Research The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch ismael.pili@hsbc.com.sg +65 6658 0606 Kar Weng Loo* Senior Banks Analyst, SE Asia The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch karwengloo@hsbc.com.sg +65 6658 0621 Xiushi Cai* Banks Analyst, SE Asia The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch xiushicai@hsbc.com.sg +65 6658 0617 Jayant Parasramka* Associate Bangalore *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations. Strait Talk EQUITY STRATEGY ASEAN ASEAN Banks – preferred picks Company Ticker Rating Closing Price (LC) Target Price (LC) Upside to TP (%) Perf YTD (%) M Cap USDbn 3m ADT (USDm) ___ PE (x) ____ ___ PB (x) ____ ___ROE (%) ___ Div Yield (%) 2017e 2018e 2017e 2018e 2017e 2018e 2017e 2018e Metrobank MBT PM Buy 81.00 105.50 29.6 11.6 5.06 4.5 14.0 11.2 1.2 1.1 8.7 10.0 1.2 1.5 Krung Thai Bank KTB TB Buy 19.60 26.20 33.7 10.7 7.80 20.6 7.0 6.5 0.9 0.8 13.0 13.0 4.3 5.4 Siam Comm. Bank SCB TB Buy 153.00 183.50 19.9 6.3 14.85 29.9 10.0 8.7 1.4 1.3 14.2 14.8 3.9 4.6 Source: Thomson Reuters Datastream, Bloomberg, HSBC estimates. Prices as on 7 March 2017. Banks in vogue  EQUITY STRATEGY ● ASEAN 13 March 2017 2 As banks go, so goes the market ASEAN banks outperforming the index It is often said that a rise in the index has to have the banks moving alongside it, if not lead, given the sector’s size and influence on the index. Banks weight in local index Banks weight in MSCI Index Source: Bloomberg, HSBC estimates Source: MSCI, Thomson Reuters Datastream, HSBC estimates *Philippines Banks weightage includes Conglomerates Even in the Philippines where the banks’ weight appears to be lower, banks account for a big part of the conglomerates profit and/or assets. Inclusive of the conglomerates where banks are a large part of the business, the share of the MSCI Philippines index moves up to 30.0%. In short, banks have to be part of the conversation when talking about these markets. In this regard, banks have generally outperformed their local index both on a YTD basis and from the inception of the year-end 2016 rally. On a YTD basis, the banks under our coverage that have outperformed its local index the most are Danamon, CIMB, Bangkok Bank, AMMB, and KTB. The banks have outperformed generally because they were cheap when they were near trough valuations, and they are seen as potential restructuring plays (with the exception of Bangkok Bank) that would benefit from a recovery in the economy (either operationally or on its turnaround intent), or simply as beta plays (possibly the case for 4 out of the 5 markets in ASEAN). 0.05.010.015.020.025.030.0STIKLCIPCOMPJAKCompSET IndexBanks Weights in Local Index (%)051015202530354045IndonesiaMalaysiaPhilippin