We believe the 15% fall in its share price over the past month reflects excessive concern over asset quality amid renewed oil price increases, which is disproved by well-controlled asset quality in 1H26 when oil prices spiked sharply. We thus upgrade THANI to OUTPERFORM from NEUTRAL with an unchanged mid-2027F TP of Bt2.4 on the back of a solid 6.75% dividend yield and robust 25% 2026F earnings growth, driven by an improved NIM and lower credit cost. Supported by rising demand for both used and new trucks, new loan drawdowns are expected to pick up in 2H26, leading to a resumption of loan growth in 2H26.
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THANI – Upgrade to OUTPERFORM on good dividend
THANISET
Benefit from rising truck demand. Driven by rising demand for both used and new trucks, THANI expects new loan drawdowns to continue rising HoH in 2H26, leading to a resumption of loan expansion in 2H26. Its new loan drawdowns rose 23% YoY to Bt8.24bn in 1H26, accounting for 48% of its 2026 target of Bt17bn (+19%). Truck demand has shown signs of a rebound, supported by 1) a transition to Euro 5 models to meet carbon reduction mandates and 2) an acceleration in private investment and import & export. Deliveries of new trucks experienced temporary delays as fleet operators sought regulatory clarity on the Department of Land Transport’s safety equipment mandates, which were resolved in 2Q26. Truck sales rose 24% YoY in 7M26 and are expected to increase 18% in 2026. We forecast its loans to contract 2% in 2026 (vs. -4.2% YTD) before expanding 2% in 2027.
Wider NIM. THANI expects its cost of funds to fall further in 2H26 as maturing high-coupon debentures are rolled over at lower prevailing market rates. Meanwhile, a higher proportion of used truck hire purchase and title loans has enhanced loan yields. We thus expect NIM to widen by 62 bps in 2026 and 10 bps in 2027.
Tone down credit cost guidance. THANI toned down its 2026 credit cost guidance (excluding impairment losses on NPAs) to around 1% (vs. 1% in 1H26), down from previous guidance of no higher than 2%. In 2H26, the company expects to continue booking reversals of impairment losses on NPAs, albeit in a smaller amount. We expect its credit cost (including impairment losses on NPAs) to fall by 57 bps to 0.85% in 2026 vs. 0.66% in 1H26. The company had a high LLR of 144% to cope with uncertainties amid renewed oil price increases.
Strong 2026F earnings growth. We expect strong 25% growth in 2026F earnings, mainly driven by a 62 bps rise in NIM and a 57 bps fall in credit cost, alongside a 2% contraction in loans. We expect 2H26 earnings to rise both HoH and YoY, driven by higher NII from an improved NIM and loan growth.
Good dividend yield. We expect 2026F DPS to be Bt0.14 (60% payout), on par with the 2025 figure (59% payout), equivalent to 6.75% dividend yield.
Upgrade to OUTPERFORM. We believe the 15% fall in its share price over the past month reflects excessive concern over asset quality amid renewed oil price increases. We thus upgrade THANI to OUTPERFORM from NEUTRAL with an unchanged mid-2027F TP of Bt2.4 on the back of a solid 6.75% dividend yield and robust 25% earnings growth in 2026F.
Key risks: 1) Asset quality risk from an economic slowdown and the energy crisis brought by the Middle East conflict, 2) downside risk on loan growth from falling truck sales and 3) ESG risk from market conduct.