Krungthai Card Pcl Quality consumer franchise at beaten down valuations; initiate at OW

研报英文原文证据摘录

Krungthai Card Pcl Quality consumer franchise at beaten down valuations; initiate at OW

lows for cost-efficient acquisition JPMorgan Securities (Thailand) Limited

of high-quality customers through over 900 KTB branches (23% in 1Q26).

KTC is migrating its core payment system to a cloud platform, providing

advantages over competitors on legacy infrastructure. These strengths have Quarterly Forecasts (FYE Dec)

supported consistent delivery of 6.1-7.4% ROA over 2018-25, and we expect Adj. EPS (Bt)

2025A 2026E 2027E

these to drive ROA of 7%+ in the next 3Y, with consistent market share gains. Q1 0.72 0.84A

Despite these, the stock has come off to PE/PB at ~1.5 SD below 5Y averages, Q2 0.73 0.80

providing an attractive entry point in our view. Q3 0.76 0.79

Q4 0.80 0.78

• Macro challenges and regulatory risks ahead, but priced in. We expect FY 3.02 3.21 3.32

KTC to deliver steady profit growth over the next 2Y despite macro and

regulatory risks. Higher oil prices could lead to higher delinquencies for Style Exposure

consumers, while the shift in regulator to BoT could lead to changes in interest

rate ceilings. Further, an increase in the minimum credit card payment to 10%

from 8% could be a risk, if implemented (planned 2027). Yet, despite pricing

in lower NIM over the next 3Y and higher credit costs in 2026E, we expect

steady profits, with ROE at 16.6-18.0%.

• Capital management key to re-rating. Part of the longer-term

underperformance of KTC (-32% from 1Y peak vs SET Index+32.6%) is due

to capital build as the lender maintained its payout near 40% while risk-

weighted assets (RWA) growth slowed. However, we are starting to see a shift,

with payout ratio moving to ~59% in FY25 (46% in 2024), as TH financial

peers have also stepped up dividends.