STOCKS NEWS THAILAND-Govt spending, valuation underpin Krung Thai Bank - analysts

Fri Dec 28, 2012 1:31am EST

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The positive outlook for loan growth thanks to government infrastructure spending will continue to underpin shares in state run Krung Thai Bank Pcl, trading at undemanding valuation, analysts said, citing management guidance.

The bank expects a loan growth of about 1.5 times of GDP for 2013, with focus on small commercial lending to push up loan yields, broker Phillip Securities said in a research report. It rated the stock a 'buy', with 2013 target price of 24.7 baht.

Krung Thai Bank shares were up 0.5 percent by the midsession break of 0530 GMT. It has risen 41 percent so far this year versus a 44 percent gain of the banking subindex.

"We see a positive outlook for KTB in CY13 after a successful capital raise, which boosts the bank's capital base, paving the way for further business expansion," Sasikorn Charoensuwan, an analyst at Phillip Securities, said in a report.

Maybank Kim Eng Securities has forecast a 49.6 percent net profit growth for this year and 35 percent for next year.

"KTB will be the prime beneficiary on government infrastructure investment projects with outstanding earnings growth prospects over the next three years," Maybank Kim Eng analyst Woraphon Wiroonsri said in a report.

The broker said Krung Thai bank was its top pick, with a target price of 25 baht. The stock traded at an undemanding valuation, with price to book value of 1.3 times and price to earnings ratio of 8 times, it said.

1315 (0615 GMT)

(Reporting by Viparat Jantraprap in Bangkok; Editing by G.Ram Mohan)

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