Company Coverage
Thanachart Capital (TCAP TB): 2Q26: Results Beat; Dividend Income Boosts Earnings
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt86.25
Bt94.00
+9.0%
Bt60.00
Analyst
Highlights
- TCAP reported a net profit of Bt2.64b in 2Q26, up 28% yoy and 24% qoq.
- Share buyback programme announcement boosts the share price.
- Maintain HOLD with a higher target price of Bt94.00 (previously: Bt60.00)
Analysis
- 2Q26 earnings beat. Thanachart Capital (TCAP) reported a 2Q26 net profit of Bt2.64b, beating our and consensus expectations by 32% and 25% respectively. The company’s net profit rose 28% yoy and 24% qoq in 2Q26. The key contributor to the decent earnings was a dividend income of Bt797m
in this quarter. Ratchthani Leasing (THANI), one of TCAP’s subsidiaries, reported a yoy and qoq decrease in provision expenses and credit costs in
2Q26. Excluding provision expenses, TCAP’s pre-provision operating profit rose 18% yoy and 23% qoq in 2Q26.
- Loan portfolio shrank yoy and qoq. TCAP reported a loan portfolio of Bt46b in 2Q26, contracting 16% yoy and 4% qoq. This was mainly caused by
THANI continuing to downsize its loan portfolio in 2Q26 to maintain good asset quality. We expect THANI to resume growing its loan portfolio in 2H26,
although the truck business is expected to face some pressure from the ongoing conflict in the Middle East, resulting in higher oil prices.
- Non-II rose yoy and qoq. TCAP reported a non-interest income (non-II) of Bt5.77b, up 12% yoy and 19% qoq in 2Q26. Share of profit from investment
rose 13% yoy and 4% qoq. Insurance income rose 4% yoy and 1% qoq. Meanwhile, dividend income was Bt797m in 2Q26.
- A qoq increase in credit cost. The company reported provision expenses of Bt54m in 2Q26, decreasing 80% yoy but up 91% qoq. This resulted in credit
costs dropping 138bp yoy but up 22bp qoq, and have been reported at 46bp in 2Q26. NPL ratio stabilised qoq at 4.0% in 2Q26.
- A gradual pickup in used truck prices. We have seen strong signs of recovery in the used truck business following the increase in the used truck price index
ytd. However, the market is currently concerned about the potential impact from Middle East tensions. We expect THANI to resume growing its loan
portfolio in 2H26, although the truck business is expected to face some pressure from the ongoing conflict in the Middle East, resulting in higher oil
prices. We expect THANI to benefit from government disbursements for the 2027 fiscal budget starting in Oct 26.
- Announcement of a share buyback programme boosts the share price. TCAP announced a share buyback programme with a budget not exceeding Bt7.5b,
for a maximum of 104,861,673 shares (10% of total paid-up shares). The share repurchase is scheduled from 17 Aug 26 to 16 Feb 27. The share buyback will be operated by the Automatic Order Matching (AOM) system. TCAP intends to enhance ROE with an intention to reduce shareholders' equity. We are positive on this action, which will increase TCAP's ROE and act as a catalyst for the share price. However, the current share price is trading at 1.0x 2026F P/B. We reckon the company will cautiously buy back shares when the P/B is trading above the 1x level. Therefore, we might see just a partial share buyback instead of 100% budget utilisation in buying back shares. This may result in further improvement in dividend payout.
Highlights
- TCAP reported a net profit of Bt2.64b in 2Q26, up 28% yoy and 24% qoq.
- Share buyback programme announcement boosts the share price.
- Maintain HOLD with a higher target price of Bt94.00 (previously: Bt60.00)
Analysis
- 2Q26 earnings beat. Thanachart Capital (TCAP) reported a 2Q26 net profit of Bt2.64b, beating our and consensus expectations by 32% and 25% respectively. The company’s net profit rose 28% yoy and 24% qoq in 2Q26. The key contributor to the decent earnings was a dividend income of Bt797m
in this quarter. Ratchthani Leasing (THANI), one of TCAP’s subsidiaries, reported a yoy and qoq decrease in provision expenses and credit costs in
2Q26. Excluding provision expenses, TCAP’s pre-provision operating profit rose 18% yoy and 23% qoq in 2Q26.
- Loan portfolio shrank yoy and qoq. TCAP reported a loan portfolio of Bt46b in 2Q26, contracting 16% yoy and 4% qoq. This was mainly caused by
THANI continuing to downsize its loan portfolio in 2Q26 to maintain good asset quality. We expect THANI to resume growing its loan portfolio in 2H26,
although the truck business is expected to face some pressure from the ongoing conflict in the Middle East, resulting in higher oil prices.
- Non-II rose yoy and qoq. TCAP reported a non-interest income (non-II) of Bt5.77b, up 12% yoy and 19% qoq in 2Q26. Share of profit from investment
rose 13% yoy and 4% qoq. Insurance income rose 4% yoy and 1% qoq. Meanwhile, dividend income was Bt797m in 2Q26.
- A qoq increase in credit cost. The company reported provision expenses of Bt54m in 2Q26, decreasing 80% yoy but up 91% qoq. This resulted in credit
costs dropping 138bp yoy but up 22bp qoq, and have been reported at 46bp in 2Q26. NPL ratio stabilised qoq at 4.0% in 2Q26.
- A gradual pickup in used truck prices. We have seen strong signs of recovery in the used truck business following the increase in the used truck price index
ytd. However, the market is currently concerned about the potential impact from Middle East tensions. We expect THANI to resume growing its loan
portfolio in 2H26, although the truck business is expected to face some pressure from the ongoing conflict in the Middle East, resulting in higher oil
prices. We expect THANI to benefit from government disbursements for the 2027 fiscal budget starting in Oct 26.
- Announcement of a share buyback programme boosts the share price. TCAP announced a share buyback programme with a budget not exceeding Bt7.5b,
for a maximum of 104,861,673 shares (10% of total paid-up shares). The share repurchase is scheduled from 17 Aug 26 to 16 Feb 27. The share buyback will be operated by the Automatic Order Matching (AOM) system. TCAP intends to enhance ROE with an intention to reduce shareholders' equity. We are positive on this action, which will increase TCAP's ROE and act as a catalyst for the share price. However, the current share price is trading at 1.0x 2026F P/B. We reckon the company will cautiously buy back shares when the P/B is trading above the 1x level. Therefore, we might see just a partial share buyback instead of 100% budget utilisation in buying back shares. This may result in further improvement in dividend payout.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt86.25
Bt94.00
+9.0%
Bt60.00
Analyst
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