Muangthai Capital Set for Record Profit in 2Q26 Amid Robust Collection and Lower Funding Costs

Kiatnakin Phatra Securities (KKPS) expects Muangthai Capital Public Company Limited (SET: MTC) to achieve a record quarterly profit of Bt1.88 billion in the second quarter of 2026, a 3% increase quarter-on-quarter and 14% year-on-year. The brokerage maintains a ‘BUY’ rating on MTC, with a price objective of THB 38.00, compared to its most recent trading price of THB 32.25. Unlike previous years when rapid loan growth was the primary driver, MTC’s performance in 2026 is supported by a mix of moderate loan growth, lower funding costs, and improving credit costs. KKPS forecasts loan growth at 2.9% QoQ and 8% YoY in 2Q26, even as MTC added 152 new branches. While this loan expansion is slower than MTC’s historical rates, stronger collection performance has enhanced asset quality, with credit costs expected to remain low at 2.2%. The loan loss reserve ratio (LLR) is projected to improve to 146.5%. On the funding side, MTC benefits from diversified sources, including offshore borrowings, reducing dependence on the domestic debt market. An “A-” domestic credit rating has expanded its institutional funding access, and its latest baht debenture issuance saw funding costs 15-35 basis points lower than similar issuances in late 2025. Funding cost advantages are predicted to become even more pronounced in the second half of 2026. A key short-term catalyst for MTC is a potential credit rating upgrade, with a decision expected in September. If successful, this would further lower funding costs and bolster funding capacity, addressing major investor concerns about long-term sustainability. KKPS maintains a preference for TIDLOR, citing its stronger earnings growth and shareholder returns, but highlights the upcoming rating review as a significant near-term driver for MTC.