Maybank Securities (Thailand) maintained its “Buy” recommendation on Muangthai Capital Public Company Limited (SET: MTC) with a target price of THB 46, citing resilient lending growth, lower funding costs and disciplined operating expenses.
The target price is based on 12 times forecast FY2027 earnings and a price-to-book value ratio of 1.7 times. Maybank views MTC’s focus on small-ticket motorcycle title loans and access to local communities as central to sustainable growth. Its avoidance of unsecured and large-ticket lending also supports asset quality.
MTC reported net profit of THB 1.94 billion in the third quarter of 2026, up 13% year-on-year and 2% quarter-on-quarter, supported by growth in net interest income. Nine-month net profit rose 15% to THB 5.7 billion, representing 76% of Maybank’s full-year forecast.
Outstanding loans expanded 7% YoY and 2% QoQ to THB 190 billion. Combined with a 34-basis-point quarterly improvement in net interest margin, this helped lift net interest income by 10% YoY.
Operating expenses increased 10% from a year earlier as MTC expanded its workforce and opened 58 new branches. Nevertheless, the cost-to-income ratio remained stable at 47%. Pre-provision operating profit grew 9% YoY and 4% QoQ.
The non-performing loan ratio edged up two basis points QoQ to 2.66%, while NPL coverage remained strong at 143%.
Credit costs improved to 2.57% from 2.69% in the third quarter of 2025, supporting earnings growth. For the first nine months of 2026, credit costs declined 19 basis points YoY to 2.36%.
However, new NPL formation increased 20 basis points QoQ to 2.57%. Stage 2 loans rose 6% sequentially, accounting for 7.85% of total loans, up 33 basis points. Maybank said these signs of weakening asset quality warrant monitoring over the next six months.
Maybank forecasts net profit growth of 12% in 2026 and 8% in 2027, supported by lower credit costs and funding expenses. It expects net interest margin to improve YoY in 2027 as MTC issues new bonds at lower coupon rates over the next 12 months.
The brokerage also sees limited downside to NPLs and net interest income if the Bank of Thailand lowers the current 24% interest-rate ceiling on vehicle title loans, given MTC’s average lending rate of approximately 18%.
A key risk is potential asset quality deterioration from drought if El Niño affects agriculture, as around 30% of MTC’s customers work in the sector.
