First Read: Muang Thai Capital "On track H1 financial targets, risks..."

Research evidence excerpt

First Read: Muang Thai Capital "On track H1 financial targets, risks..."

Forecast returns

Forecast price appreciation -4.3%

Forecast dividend yield 1.4%

Forecast stock return -2.8%

Market return assumption 7.0%

Forecast excess return -9.9%

Company Description

Muang Thai Capital (MTC) is a non-bank financial company operating on a personal loan

licence issued by Bank of Thailand. It provides vehicle title loans, land title loans, and nano

finance loans. As of March 2025, MTC had Bt167,560m in loans outstanding and 8,303

branches nationwide. The company has licences to operate vehicle title loans, land title loans,

nano finance, motorcycle and hire purchase, personal loans, and pay later loans.

Valuation Method and Risk Statement

We believe key industry up/downside risks include: 1) COF – a higher-for-longer bond yield

and credit spread would affect system asset quality and hence the COF of non-banks as their

funding relies mainly on debentures; 2) fiscal stimulus – a new government usually focuses on

income stimulus policies in the first year of administration, which would help MTC's rural

customer base; 3) regulation – the BOT insisted on withdrawing COVID debt relief measures

by year-end 2023 and implementing household debt relief measures in 2024-26, although

economic recovery momentum has been weaker than expected.

MTC: We use a P/BV multiple to derive our price target.

We believe key company-specific up/downside risks for MTC include: 1) credit quality –

without fiscal stimulus and rate cuts, MTC may not be able to reduce credit cost further; 2)

capital structure – if bond market volatility subsides, MTC could grow loans by over 10%

again and keep debt-to-equity under debt covenant; 3) opex – if MTC slows down branch