The share price of Muangthai Capital Public Company Limited (SET: MTC) rose 3% to THB44.00 per share on Tuesday as the price bounced back from the previous decline that contrasts with its fundamentals.
Maybank Thailand (Securities) (MST) wrote in a note this morning that the stock price has declined 11% YTD, pressured by the rise in the U.S. 10-year yield due to uncertainty surrounding Trump 2.0 policies, which have impacted inflation and the pace of U.S. policy rate cuts. However, in the short term, there are positive signals from trade policies, which are expected to implement selective tariff hikes. This could help lower U.S. bond yields, providing positive sentiment for MTC’s stock price.
The firm expects 4Q24 profits to grow, supported by robust loan growth and stable asset quality. The NPL ratio and credit cost are anticipated to decline, driving full-year profit growth of 17.6% YoY in 2024 and 17.4% YoY in 2025.
Government Stimulus: State measures, such as the December 2024 cash distribution program for farmers and the upcoming Phase 2 cash handout for the elderly, worth THB30 billion, are viewed as positives. These initiatives are expected to improve asset quality as citizens are more likely to use the funds to repay debt.
Additionally, MST gave a strategic target price for MTC at THB60.00 per share.
