Equity Analysis /

Thailand: Finance - All good things must come to an end

  • Fincos’ stocks prices have dived this year

  • Is non-bankable finance space still good a mid-term investment?

  • Fair values under worst-case scenario

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
17 October 2022

Non-bankable finance (ex-AMC) space now looks less attractive, the steep stock price falls this year notwith-standing. Hence, under our worst-case scenario we have a BUY call only on TIDLOR.

Fincos’ stocks prices have dived this year

The stock prices of the five lenders to non-bankable credit markets under coverage—KTC, MTC, NCAP, SAWAD, and TIDLOR—are down in the range of 39-75% from the records they hit last year. NCAP suffered the most vertiginous price plunge of 75% from the high it touched in May 2021. We believe the stock price slumps have been driven by a range of factors, the most salient being: 1) anticipation of heavier LLPs (deteriorating asset quality), 2) lower lending yields (intensifying competition), 3) market recognition of regulatory risk, and 4) market expectations of rising funding costs.