DBS Vickers recommends buying “TIDLOR”
DBS Vickers recommends buying “TIDLOR” with a target price of 55 baht after the first quarter of 2022 saw new highs in loan and insurance portfolio performance
DBS Vickers Securities (Thailand) has placed a “buy” notice on “TIDLOR” stock with a target price of 55 baht. This decision was taken after the performance of Ngern Tid Lor Public Company Limited in the first quarter of 2022 showed a new strong profit of 940 million baht, mainly due to significant positive growth in credit and insurance premiums from Ngern Tid Lor, the continued expansion of the company’s branches and the successful issuance of TIDLOR cards.
The company is able to keep non-performing loans (NPLs) and finance costs low while building a debt reserve three times larger than NPLs. Managing Director of Ngern Tid Lor announced for 2022 loan portfolio growth of 20-25% and insurance premiums of 30-35% and said the company will continue to grow and boost its business through digital investments. He also predicted Thailand’s reopening would boost demand for loans.
After Ngern Tid Lor Public Company Limited revealed its new strong first quarter profit, reflecting its exceptional growth, DBS Vickers Securities (Thailand) published an analysis of TIDLOR shares and issued a “buy” recommendation on the stock . He set a 12-month price target of 55 baht per share, up 63% from 33.75 baht (at market close May 18, 2022). This follows the company posting 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 the first quarter of 2022 rose sharply to 65.7 billion baht, up 23.2% from the same period last year. last and 6.9% from the previous quarter. This includes loan releases in March 2022 which reached new highs. Total insurance premiums came to 1,614 million baht, up 27% from the same period last year. The company also revealed the success of a car and van title loan product offering a TIDLOR card as well as a truck title loan campaign with an interest rate of 0.79% per month, allowing including customers to pay up to 10 auto insurance premiums with 0% cash. Obligor quality and cost of credit are at better levels than industry averages with a low NPL rate of 1.25% based on strong credit consideration. Debt reduction is at a high of 317% or more than three times PNP. Cost to revenue or operating expense to revenue was reduced from 61% to 57.5%, while finance costs stabilized at a low 1.7%, down 2 .4% compared to the same period last year.
“For 10 years, the company has been investing in digital technology and continuously aims to expand its branches”, “Currently, the company has more than 1,400 branches with more than 60,000 touch points. The value of loans per branch is increasing stands at more than 40 million baht, reflecting massive investments in digital technology, allowing customers to conduct more self-service transactions, including the development of the “Ngern Tid Lor” application which counts more than 1 million transactions per quarter In insurance brokerage, the company ranks second in the market with more than 5,000 employees holding valid insurance licenses and ready to advise clients We also set a new standard for all customers to pay 0% insurance premiums for up to 10 months and developed the Areegator platform, a digitized insurance aid that links Ngern’s system Tid Lor to nearly 20 insurance companies. comments Piyasak Ukritnukun, Managing Director of Ngern Tid Lor.
For 2022, Ngern Tid Lor has set a target for car registration loan portfolio 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 careful thought on loan release to keep the cost of credit (cost of credit release risk) at less than 1.5% and maintain the NPL level at no more than 2.%, with a focus on continued investment in digital technology to drive service potential and reduce cost to revenue.
The company expects to continue its strong growth in the second quarter of 2022 compared to the same period last year, when the entire sector was affected by the pandemic-related confinement. Ngern Tid Lor will achieve this by driving business through technology and innovation. Meanwhile, the gradual economic and tourism recovery after the reopening of the country will stimulate demand for loans for working capital for business expansion as well as car insurance. The company is ready to help ease the burden for those who want to access capital to grow their business in a higher cost of living environment.