Bank of Ayudhya

Bank of Ayudhya Plc (BAY)
 

BAY’s Q4 2011 core profit came in 10% above our expectations. With many of the negative charges having been pushed through the quarter, FY12 looks promising. We believe BAY will become an increasingly more convincing domestic consumption play as the year progresses. Our FY12-13 forecasts are fine-tuned as we build in the upcoming FIDF tax on deposits and B/Es but lower opex. Maintain OUTPERFORM with an unchanged target price, which is based on 1.4x FY12F P/BV (GGM with long-term assumptions of 13.5% ROE, 11.7% COE, 6.8% growth).