Bank of Ayudhya

Bank of Ayudhya Plc (BAY)
 

Given the accelerating demand for consumer credit, we would not bet against more surprises in the coming quarters from BAY whose 1Q12 earnings beat our and market expectations by 11%. ROE surged past 13%, which we believe is just the beginning of a long march. We raise our FY12-14 EPS numbers for lower opex and credit costs. This and a rise in our target FY12 P/BV from 1.4x to 1.8x boost our GGM-based target price, which assumes 15% ROE, 11.7% COE and 7.5% growth. Maintain Outperform.