We reiterate our BUY rating on KBANK with a target price of Bt176.00, based on a 2025E PBV of 0.70x, positioned -1.00 SD below the 10-year historical average. Recent guidance from the bank’s analyst meeting yesterday reinforces our positive outlook for 2025E earnings. While loan growth is expected to be stable YoY, significantly below our estimate of +3% YoY increase, the bank anticipates a lower credit cost than we project (140-160 bps vs. 170 bps). This credit cost guidance is supported by its asset management JV (ARUN) and government support measures (“You Fight, We Help”). NIM is expected to decline slightly to 3.3-3.5% (our estimate of 3.6%) from 3.64% in 2023, reflecting the bank’s anticipated policy rate cut by 50 bps to 1.75% and the impact of the “You Fight, We Help” program. However, the bank targets a double-digit ROE by 2026E, compared to 8.87% in 2024. KBANK maintains its dividend payout at least 25%, with potential upside pending shareholder approval in February. We expect a payout ratio of 41% (vs. 36% in 2023), translating to a 2024 dividend of Bt8.41 per share, yielding 5.6%. The bank does not plan a share buyback program.

Our 2025E net profit forecast remains unchanged at Bt52bn, reflecting a +7% YoY increase, primarily driven by lower loan-loss provisions. We anticipate stable YoY earnings in 1Q25E, with a likely QoQ increase due to a seasonal decrease in opex.

KBANK’s share price has outperformed the SET Index by 9% and 19% over the past one and three months. This outperformance can be attributed to the market’s recent downturn, prompting investors to seek the safety and income of high-dividend stocks. Currently trading at a PBV of 0.65x (-1.25 SD), KBANK’s valuation is significantly discounted compared to the sector average of 0.7x and its key rival, SCB, which trades at 0.8x PBV.