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“DBS Vickers recommends buying “TIDLOR”

30 May 2022
“DBS Vickers recommends buying “TIDLOR”

DBS Vickers Securities (Thailand) has put a “buy” advisory on “TIDLOR” stock with a target price of 55 baht. The move was made after Ngern Tid Lor Public Company Limited’s Q1/2022 performance showed a new profit high of 940 million baht, mainly resulting from significant positive growth in Ngern Tid Lor’s credit loan and insurance premiums, the company’s continuous branch expansion, and the successful issuance of TIDLOR cards. The company is able to maintain non-performing loans (NPL) and financial costs at low levels while also setting aside a debt reserve three times higher than NPLs. Ngern Tid Lor’s managing director announced target 2022 loan portfolio growth of 20-25% and insurance premiums of 30-35% and said the company will continue to expand and drive business through digital investments. He also anticipated that Thailand’s reopening would boost demand for credit loans.

After Ngern Tid Lor Public Company Limited revealed its new profit high in Q1, reflecting its outstanding growth, DBS Vickers Securities (Thailand) published a TIDLOR stock analysis and placed a “buy” recommendation on the stock. It set a 12-month price target of 55 baht per share, representing a 63% upside from 33.75 baht (at market close on 18 May 2022). This follows the company earning a net profit in the first quarter of 2022 of 940 million baht, up 20% from the same period last year and 18.2% from the previous quarter.

Meanwhile, Ngern Tid Lor Public Company Limited’s loan portfolio at the end of Q1/2022 grew strongly to 65.7 billion baht, up 23.2% from the same period last year and up 6.9% from the previous quarter. This includes loan releases in March 2022 that hit new highs. Total insurance premiums stood at 1,614 million baht, up 27% from the same period last year. The company also revealed the success of a car and pick-up truck title loan product offering TIDLOR Card as well as truck title loan campaign with an interest rate of 0.79% per month, including allowing customers to pay up to 10 car insurance premiums with 0% cash. Debtor quality and Credit cost are at better levels than the industry averages with a low NPL rate of 1.25% based on strong credit consideration. Debt allowance is at a high level of 317% or more than three times NPLs. Cost to Income or operating expense to revenue was reduced from 61% to 57.5% while financial costs settled at a low level of 1.7%, down 2.4% from the same period last year.

“Over 10 years, the company has been investing in digital technology and continuously aiming to expand its branches,” “Currently, the company has over 1,400 branches with more than 60,000 touchpoints. Credit loan value per branch stands at over 40 million baht, reflecting massive investments in digital technology, allowing customers to make more self-service transactions. These include the development of “Ngern Tid Lor” application which has more than 1 million transactions per quarter. In insurance brokerage business, the company ranks No. 2 in the market with over 5,000 employees with valid insurance licenses ready to provide advice to customers. We also set a new standard for all customers to pay 0% insurance premiums for up to 10 months and developed Areegator platform, a digitalized insurance aid that connects Ngern Tid Lor’s system with almost 20 insurance companies.” comments Piyasak Ukritnukun, Managing Director of Ngern Tid Lor.

For 2022, Ngern Tid Lor has set a car registration loan portfolio growth target growth of 20-25% and insurance premium growth of 30-35%. Ngern Tid Lor also aims to add at least 300 branches while focusing on efficient business management and thorough loan releasing consideration to maintain Credit Cost (cost of risk from credit releasing) at less than 1.5%, and maintain the NPL level at no more than 2%, with an emphasis on continuous digital technology investment to boost service potential and reduce Cost to Income.

The company expects to continue strong growth in Q2/2022 compared with the same period last year when the overall industry was affected by the pandemic lockdown. Ngern Tid Lor will achieve this by driving business with technology and innovation. Meanwhile, the gradual economic and tourism recovery from the country’s reopening will boost demand for loans for working capital for business expansion as well as vehicle insurance. The company is ready to help reduce the burden on those who want to access capital to expand their business amid higher living costs.

Source: Bangkok Post

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