Earnings Report /
Thailand

Muangthai Capital PCL: Miss; OPEX was heavier than assumed

  • Earnings were below our estimate

  • MTC posted a 4Q21 bottom-line of Bt1.1bn

  • Gross loans grew by 8.1% QoQ and 29.4% YoY in 4Q21

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

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Bualuang Securities
15 February 2022

We have a BUY call, premised on strong business growth (even though our model points to a slimmer YoY NIM for 2022), supported by ongoing sales-point expansion (to 6,400 locations by YE22 and 6,700 locations by YE23). Lending growth should continue through 2022-23. We now assume that the cost/income ratio will decline from 50.1% in 2021 to 47.5% in 2022. Therefore, our model points to 2022 earnings jumping 24% YoY. There could be scope for upside to our 2022 profit forecast if the planned home appliance lending biz (operated by Muang Thai Pay Later Co Ltd, a subsidiary) were to launch this year.

Earnings were below our estimate

MTC posted a 4Q21 bottom-line of Bt1.1bn, down by 19.7% YoY and 8.4% QoQ. The result was 17% below our estimate and 20% lower than the Bloomberg consensus, due to heavier OPEX than assumed (chiefly right-of-use and staff costs tied to sales-point expansion). Pre-provision operating profit came to Bt1.6bn, down by 13% YoY and 5% QoQ. As such, 2021 earnings of Bt4.9bn missed our estimate by 4.5%.