Kiatnakin Phatra Securities (KKPS) maintains a cautious outlook on Tisco Financial Group (SET: TISCO), projecting its dividend per share (DPS) to remain at THB 7.75 despite a stronger profit outlook.
The firm expects TISCO’s 2026 profit to rise 5% year-on-year to THB 1.73 billion, supported by increased fee income, and has raised earnings forecasts for 2026-27 by an average of 3%. This translates to an estimated 5 – 6% annual EPS growth.
Nonetheless, KKPS keeps its Dividend Discount Model-based (DDM) target price unchanged at THB 112, arguing that the higher earnings mainly reinforce the sustainability of dividends rather than creating room for increased payouts.
Although TISCO benefited from a lower-rate environment due to its fixed-rate loan book and short-duration deposits, the anticipated terminal policy rate of 1% means most funding cost advantages have already materialized. Only a marginal 15 basis point decline in funding costs is expected in the second quarter of 2026.
Loan growth at TISCO is recovering, driven by new-car hire purchase and corporate lending. However, expansion in higher-yield title loans has been deliberately slowed due to unattractive risk-adjusted returns, potentially capping further improvements in loan yields and overall profitability. Lending yields are forecast to drop 8 basis points quarter-on-quarter to 7.18% in 2Q26 and then stabilize.
TISCO shares are up 5% year-to-date but have lagged the broader banking sector by 10%. KKPS believes this underperformance will persist. With a current valuation at 2.1 times PBV—already reflecting a peak 16% ROE and capped DPS—there appears limited scope for further stock re-rating. Thus, KKPS reiterates its “Underperform” rating on TISCO.
