Kasikornbank PCL [SET:KBANK] is the fourth largest commercial bank in Thailand as measured by total assets, loans, and deposits with about 15% market share in Thailand. KBANK provides a broad range of commercial banking business, securities business, and other related businesses.

KBANK is traded on the Thailand SET and is one of the 32 stocks listed in the MSCI Thailand index, with a 4.94% weighting. Foreign institutional investors are required to hold KBANK shares if their funds are MSCI designated.

KBANK is up 51.28% year-to-date, despite a recent pull back. The stock is traded at a P/E ratio (TTM) of 12.36 and P/B of 1.7. Since the financial crisis in 2008, the price to book (P/B) ratio becomes one of the most important metrics to investors in the banking sector. Because the P/B ratio is the ratio between the current market cap of a company to its book value of equity on its balance sheet, a stock with a low P/B ratio (1 or less) could be considered as undervalued or cheap.

But nothing is ever that simple, is it? Although KBANK has a high P/B ratio of 1.7, the company is one of the most profitable banks in Thailand and its stock is outperforming the overall market.

Bernstein Research remains negative on the Thai banking sector as Thailand is facing challenges in its economy, employment and elections. Nevertheless, the research firm gives a market-perform recommendation on Kasikornbank, with a target price of THB 224 a share.

Bernstein believes KBANK will be the more resilient among the other Thai banks, given its small and medium-sized enterprises (SME) segment exposure, strong fee base and a falling cost structure. KBANK just announced that the company would likely halve the number of new employees next year as it shifts its focus to digital banking and it has no plans to open new branches.

Here are some fundamentals to be considered. KBANK reported 3Q net profits of THB 12.52 billion, compared to 3Q 2013 net profits of THB 10.71 billion, or up 16.8% from a year ago. The net profits from the first nine months was THB 36.19 billion, compared to the first nine months of 2013 net profit of THB 31.8 billion, or up 13.8%. Bank loans grew 4.32% in the first nine months, with gross non-performing loans (NPLs) at 2.16% of total lending.

In November, KBANK gave their loan growth guidance for 2015 of 8-9%, or at a rate of about 1.5 times higher than the Thai gross domestic product (GDP), projected at 3.5-4.5%. The gross NPLs are expected to be between 2.2-2.3% of total lending next year.

KBANK just reached a deal with China’s Alibaba, one of the world’s largest e-commerce companies with networks in over 240 countries and regions around the world. In the agreement, Alibaba will help KBANK introduce its SME customer resources to Alibaba's international sites and increase the export business opportunities of Thai products.

With uncertainties and the pullback in the SET market, KBANK looks very attractive at around THB 200 per share, I guess.

Disclosure: No position in KBANK