Earnings Report /
Thailand

MFEC PCL: Profit miss!

  • Earnings were 16% below our estimate

  • MFEC posted a 1Q22 net profit of Bt52m

  • Revenue was Bt1,251m in 1Q22, up 10% YoY but down 26% QoQ

Napon Jaisan
Napon Jaisan

Equity Research Analyst

Bualuang Securities
13 May 2022

We have a TRADING BUY rating to a target price of Bt11.50. The Bank of Thailand plans to soon lift the ceiling on commercial banks investing in fintech (fintech investment is currently limited to 3% of a bank’s capital), so we expect substantially more bank investment in fintech space when the rules change. In any case, MFEC’s project backlog is substantial. We expect the firm to prove stronger earnings for 2H22 as private sector investment recovers, supported by seasonality. Moreover, the 3Q22 IPO of I-Two Plc (MFEC holds 15%) will unlock investment value.

Earnings were 16% below our estimate

MFEC posted a 1Q22 net profit of Bt52m, up 6% YoY but down 49% QoQ. Excluding extra items—a Bt1.7m net FX loss—core earnings would be Bt54m, up 40% YoY (a low 1Q21 base) but down 45% QoQ (seasonality). The core number was 16% below our estimate, as sales were 4.5% below our assumption.