Report
Hai Thanh Le Phuong

TLV - Q3 Still Distorted By Integration But Trends Remain In Place

TLV Instant Earnings Comment

Recommendation:  Buy

Target price (12M): RON 2.8

 

  • BT posted net income of RON 1.2 bln in the first 9M of the year, and a net profit figure of RON 376.5 mln in the 3rd quarter, up 18.8% y-o-y and down 20.8% q-o-q, nevertheless the drop on a quarterly level was due to the bargaining gain related to acquisitions, otherwise there was a slight growth. 
  • NIM slightly came down to 428 bps from 435 bps a quarter ago and NII grew by 10.9% q-o-q while Net F&C also expanded by 4.4% q-o-q.
  • Cost-to-income was at a very comfortable level of 45.3%, down from the previous quarters but still reporting a slight rise by 160 bps.
  • NPE ratio somewhat increased from 5.58% to 5.74% q-o-q and risk cost was also higher, reaching almost 2% vs. write-backs in the previous quarter. We have to look into the details whether this was due to the integration of the new banks or any one-offs.
  • Net loans still show a good trend, growing by 4.1% q-o-q.
  • Capital adequacy stood at 23% on a total standalone level, though we have to admit that consolidated figures show a lower figure but still above the required level.
  • Opinion: We hold the view that BT is close to the end of its acquisition spree, though smaller acquisitions can happen but nothing very large, given where capital adequacy stands. Trends remain encouraging and our FY estimate of RON 1.4 bln is reachable. We maintain our recommendation and TP.
Underlying
TLV Holdings

TLV Holdings Limited is an investment holding company. The Company is engaged in the design, manufacture and sale of jewelry on a retail basis in Singapore under the brands, Taka Jewellery and Lovis Diamonds, as well as on a wholesale basis to the global markets through participation in international jewelry exhibitions. The Company operates through two segments: Retail and Pawnbroking, and Exhibitions. Its Retail and Pawnbroking segment relates to the sale of jewelry to customers at its retail outlets, promotional events and headquarters. It also includes the pawnshop business and the sale of secondhand jewelry. Its Exhibitions segment relates to the sale of jewelry through the Company's participation in international jewelry exhibitions and trade fairs. The Company has a retail network of over 20 outlets. Its subsidiaries include Taka Jewellery Pte. Ltd., Voi Jewellery Pte Ltd, Top Cash Jewellery Pte Ltd and Top Cash Pte Ltd.

Provider
Concorde Securities
Concorde Securities

Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.

Analysts
Hai Thanh Le Phuong

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