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2H14 top picks: SINGER, KCAR, AEONTS



Leasing

An approach of a spending season and the economic rebound in the second

half of the year would be a positive factor for 2H14 profit. Strong growth is

foreseen for AEONTS and SINGER, while KCAR would exhibit a turnaround from

the used-car business.

- High season for retail loans in 2H14

The business outlook of 11 leasing companies under our study (including

LIT in MAI and SINGER in the commerce sector) would improve in the

second half of the year as a result of a spending season in the fourth

quarter. The economic situation will also be more favorable when compared

with 1H14. Retail loan business (AEONTS, SAWAD, and SINGER) would

show the strongest growth, while truck leasing business (ASK and THANI)

would show some growth, waiting for a solid boost from mega investment

projects in 2015, as well as the factoring loan business (IFS and LIT) that

has received only slight adverse effects. The used-car sale business (KCAR,

which also engages in operating lease) would exhibit a turnaround in 2H14,

signaled by the improving earnings in 2Q14, while the motorcycle leasing

business (TK and GL) would rebound from the bottom in 1H14, when the

situation was unfavorable and customers, mostly farmers, had been

affected by falling agricultural product price.

- AEONTS, SINGER, KCAR to show good profit in 2H14

AEONTS, SINGER, and KCAR are projected to show remarkable growth in

2H14. Particularly, SINGER would rebound aggressive in 2H14 after having

been hurt by decreasing consumer loans as a result of the political situation

and long holidays. Similarly, effective adjustment during a crisis and a

strong business structure of KCAR would lead to a turnaround in 2H14 when

the used-car business revives aggressively.

- 2H14 top picks: SINGER, KCAR, AEONTS

We select AEONTS (FV@B121), SINGER (FV@B25) and KCAR (FV@B13.62)

as top picks of the leasing sector in 2H14 for their remarkable growth in the

second half of the year and considerable upside.


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