Kiatnakin Phatra Securities (KKPS) has reinstated coverage of Krungthai Card Public Company Limited (SET: KTC) with a ‘Buy’ rating and a target price of THB 32 per share, citing the company’s ability to drive earnings growth despite sector-wide challenges faced by the credit card industry.
KKPS notes that KTC’s current market valuation reflects cautious sentiment towards structural challenges in the sector—including a sluggish macroeconomic environment, ageing demographics, increasing adoption of alternative payments and ‘Buy Now Pay Later’ (BNPL) services, and tighter regulations amid high household leverage.
However, the brokerage argues that the market may be underestimating KTC’s capacity to generate earnings growth through effective internal measures.
KTC’s earnings growth, according to the analysis, is expected to be driven by what KKPS describes as “self-help levers” such as lower funding and credit costs, as well as tax normalization. These factors are projected to support a robust 13% EPS growth in 2026. The brokerage also points to future upside potential from higher asset yields on auto title loans and increasing fee income from insurance brokerage in subsequent years.
While overall loan growth is expected to remain subdued, KKPS projects that this will limit further capital requirements, thereby enabling the company to increase its dividend payout ratio from 46% in 2024 to 52% in 2027. This improvement would support a near-6% dividend yield for shareholders.
KKPS forecasts KTC’s net profit to reach THB 8.78 billion in 2026, increase to THB 9.10 billion in 2027, and THB 9.34 billion in 2028.
However, the key risks to the investment case include faster-than-expected disruption from alternative payments and BNPL products, execution risks in scaling up new lending and fee-earning businesses, and potential adverse regulatory changes.
Overall, KKPS believes that most structural risks are already reflected in KTC’s current valuation and maintains a positive outlook for the company’s ability to navigate headwinds through internal strategies.
