Equity Analysis /
Thailand

Muangthai Capital PCL: Time to take positions!

  • Swift ongoing loan growth, led by sales-point expansion

  • 1Q22 loan yield to mark bottom for the year

  • Lighter OPEX but NPLs and LLPs are expected to rise slightly

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
31 March 2022

Our BUY call stands. We expect strong loan growth and a lower cost/income ratio to make for a 2022 profit of Bt6.1bn, up 24% YoY (despite a slightly slimmer NIM, lower non-NII, and heavier LLPs). MTC’s stock price is down 11% since YE21, so now implies a cheap YE22 PBV of 3.6x (2.0 SDs below its long-term mean) and a 2022 PER of 17.9x.

Swift ongoing loan growth, led by sales-point expansion

Following impressive lending expansion of 29% last year (4Q21 lending rose 8.1% QoQ), we expect MTC to build its loan portfolio further in 1Q22, supported by aggressive sales-point expansion. Furthermore, we anticipate that the HP-for-new motorbikes business will mark substantial QoQ growth for the quarter, as the supply of new motorbikes available for sale has increased substantially (following shortages, 2Q-4Q21).