KGI Securities (KGI) has revealed that shares of Muangthai Capital Public Company Limited (MTC) are facing pressure in the second half of the year, as NPLs tend to increase due to aggressive loan expansion over the past two years, while competitors SAWAD and TIDLOR have slowed down lending. The research department expects loan growth to slow to approximately 8-10% in 2026F, from 3% YTD expansion in Q2/69 and 12%/15%/18% in 2025/2024/2023, respectively. NPLs in Q2/69 increased 4% QoQ and 8% YoY, particularly from title loans, resulting in credit costs rising to 2.4% from 2.2% in the previous quarter, and NPL coverage declining to 143% from 146%. The research department has therefore raised its credit cost assumptions for 2026F/2027F by 10bps to 2.5%, and cut its earnings estimates for 2026F/2027F by 2% and 5%, respectively. It also lowered its 12-month target price from 36 baht to 33 baht, while maintaining a "Hold" recommendation due to limited upside. Key risks are NPLs and credit costs that may increase, or the inability to issue debentures to expand lending.
Muangthai Capital Public Company LimitedKGI cut MTC's 2026F/2027F earnings estimates and 12-month target price to 33 baht on rising NPLs and credit costs, maintaining Hold.
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