3QFY26 results missed expectations. AEONTS’s 3QFY26 (Sep-Nov 2025) earnings came in at THB618mn (-21.6% y/y; -21.9% q/q), missing the Blomberg consensus and our estimate by 14% and 8%, respectively, on higher-than-expected credit cost.

The y/y decrease was attributed to lower interest income (from loan and yield contraction) and higher expected credit loss (ECL), while the q/q decline was due to lower interest income (from loan and yield contraction), lower non-interest income (mainly from no NPL sales in 3QFY26), and higher ECL.

Pre-provision operating profit (PPOP) was THB2.8bn (+4.7% y/y; -5.0% q/q). The y/y increase was attributed to (i) lower interest expense (from lower cost of funds and lower funding base) and (ii) lower operating expenses (OPEX). Meanwhile, the q/q decline was due to lower interest income, lower non-interest income, and higher OPEX.

Its 9MFY26 accounted for 73% of our revised FY26F forecasts.

Loan growth remained muted. Loan portfolio contracted 2.0% y/y, 0.3% q/q, and 1.1% YTD-Nov to THB88.0bn at end-3QFY26 (end-Nov 2025). Credit card loans declined 4.9% YTD to THB35.5bn and made up of 40% of total loans at end-3QFY26 (vs. 42% at end-FY25).

Meanwhile, personal loans declined 1.6% YTD to THB41.9bn and made up of 48% of total loans at end-3QFY26 (similar to that at end-FY25).

However, hire purchase (HP) loans increased 17% YTD to THB10.6bn, making up of 12% of total loans at end-3QFY26 (vs. 10% at end-FY25). The increase was driven by expanded partnerships with dealers.

Lower revenue from credit card and personal loans dragged top line in 3QFY26. Total revenue declined 3.1% y/y and 2.3% q/q in 3QFY26. Interest income decreased 4.0% y/y and 1.3% q/q. Product-wise, only HP revenue improved (+13.2% y/y and +0.6% q/q). Meanwhile, non-interest income increased 1.1% y/y (mainly from higher income from bad debt recovery) but decreased 6.5% q/q (as there were no NPL sales in 3QFY26).

Credit card revenue declined 4.9% y/y to THB1.7bn, accounting for 32% of total revenue. The decline was due to the company’s strategic adjustment in the credit card business operations, focusing on creating long-term value through higher-quality customer base management. This emphasizes valued customers who have capability to make minimum payment on time, while also restructuring benefits and services to appropriately align with the behaviour and needs of each customer segment.

Personal loan revenue declined 5.6% y/y to THB2.3bn, accounting for 43% of total revenue. The decline was due to the company’s risk management and its emphasis on portfolio quality amidst high household debt level.

However, in this quarter, the company launched a new personal loan product, “One Loan,” to facilitate customers in consolidating their debts into a single loan with a repayment period appropriate to their repayment ability and at a suitable interest rate.

HP revenue increased 13% y/y toTHB364mn, accounting for 7% of total revenue. The increase was mainly driven by growth in the second-hand vehicle HP portfolio, supported by the expansion of the partner network in both the second-hand car and motorcycle segments, leading to continuous growth in loan origination for this group.

Note that HP loans will come under the supervision of the Bank of Thailand (BOT) to ensure fair market conduct in providing services to customers, which will take effect from Dec 2025.

Non-interest income declined q/q as there were no NPL sales in the quarter. Non-interest income comprised mainly (i) income from bad debt recovery, (ii) gain from NPL sales, (iii) insurance commission income, and (iv) collection service income.

Non-interest income increased 0.9% y/y but decreased 6.5% q/q, accounting for 18% of total income in 3QFY26. The y/y increase was thanks mainly to higher income from bad debt recovery (THB589mn, +10.7% y/y), while the q/q decline was due to a lack of gains from NPL sales in 3QFY26 (vs. THB102mn gains booked in 2QFY26).

Spread widened from lower funding cost. With AEONTS’s loan portfolio shifting towards HP loans and away from personal loans and credit cards, its yield declined y/y and q/q in 3QFY26.

However, its cost of funds also decreased to 3.56% in 3QFY26 (vs. 3.94% in 3QFY25 and 3.75% in 2QFY26), alongside declining funding base amid slow lending growth and high cash inflow from loan repayments.

As such, spread widened to 16.35% in 3QFY26 (vs. 16.24% in 3QFY25 and 16.32% in 2QFY26).

OPEX decreased y/y, alongside cost-to-income ratio. OPEX decreased 4.9% y/y but increased 2.8% q/q. The y/y decline was thanks to lower marketing expenses and lower branch management expenses. Meanwhile, the q/q increase was due to its new credit card and personal loan products/programmes launched in the quarter.

Cost-to-income (C/I) ratio declined y/y but increased q/q to 42.9% in 3QFY26.

NPL ratio ticked up, and credit cost increased on ECL overlay. With the company’s asset quality management, mainly through NPL write-offs, its NPL ratio and credit cost should have already peaked in FY24 and FY25, respectively.

NPLs increased 6.5% q/q to THB4.9bn, while NPL ratio ticked up to 5.5% at end-3QFY26 (vs. 5.2% at end-2QFY26), due partly to loan portfolio contraction.

Credit cost increased to 9.0% in 3QFY26 (vs. 8.6% in 2QFY26) from management overlay for ECL set aside amid high economic uncertainties and natural disaster events, as well as a slowdown in tourism industry, that may adversely affect its customers’ ability to pay.

Coverage ratio declined to 165% at end-3QFY26 (vs. 167% at end-2QFY26).

Share repurchase programme completed. Recall that on 16 May 2025, AEONTS announced a share repurchase programme with a maximum budget of THB390mn, representing up to approx. 1.0% of the total paid-up shares (equivalent to 2.5mn shares). The repurchase program is scheduled to run from 22 May 2025 to 21 Nov 2025.

The programme was completed on19 Nov 2025 with a total of 2.5mn shares repurchased, or 1.0% of total paid-up shares, and a total value of THB264.1mn.

Outlook

Loan growth to resume in FY27F (end-Feb). With the company’s focus on quality (not quantity), AEONTS loans are expected to remain relatively flat in FY26F. However, management believes its loan portfolio will be able to expand in FY27F (Mar 2026-Feb 2027), as the company’s focus is shifting to higher-margin loans, i.e., motorcycle HP (instead of used-car HP) and personal loans.

For HP, AEONTS will continue to selectively expand its networks and dealers to grow its HP portfolio, especially motorcycle HP. Motorcycle HP is considered safer, given its smaller ticket size and shorter term, compared with used-car HP. Meanwhile, motorcycle HP has a higher yield (23% p.a. capped), compared with used-car HP (15% p.a. capped).

For personal loans, AEONTS has recently launched a new personal loan product, called “One Loan”, i.e., a term loan with attractive interest rates and low instalments, to attract the THB30k-50k monthly income customer segment. This should help the company grow personal loan portfolio with a lower credit cost.

NPL and credit cost likely to decline in 4QFY26F. AEONTS has continued to set aside an ECL overlay of approx. THB274mn in 3QFY26, of which, THB100mn was for the flood event in the South during late Nov and early Dec 2025. Recall that the company had also set up an ECL overlay of THB200-250mn in 2QFY26.

With that, at end-3QFY26, the overlay for ECL outstanding amounted to approx. THB700mn, covering the potential asset quality deterioration due to (i) the increase in credit card minimum payment from 8% to 10% (set for 1 Jan 2027), (ii) the flood event in the South, and (iii) macro uncertainties that may adversely affect its customers’ ability to pay.

For NPL, management revealed that its collection performance improved in Dec 2025 and has guided that it plans to sell up to THB300mn NPLs in 4QFY26F. As such, we expect NPL ratio to decline to 5.2% at end-4QFY26F.

With that and its high ECL overlay, AEONTS believes some ECL overlay could be reversed in 4QFY26 (Dec 2025-Feb 2026). As such, we expect AEONTS’s credit cost to decline to 8.0% in 4QFY26F (vs. 9.0% in 3QFY26). Nonetheless, FY26F credit cost (of 8.4%) is expected to be higher than FY25 (of 8.0%).

OPEX to seasonally increase in 4QFY26 but FY26F C/I ratio to remain in check and lower than FY25. Amid slow top line growth, AEONTS has continued to improve its cost efficiency and thus be able to manage C/I ratio. Specifically, by refining credit card benefit programs to better align with targeted customer segments, its marketing expenses have been effectively cut. Meanwhile, with branch format adjustment and digital utilisation, it also can reduce admin and staff expenses.

With that, we expect its FY26F OPEX and C/I ratio to remain below FY25 levels, though 4QFY26F will see a seasonal tick up in both OPEX and C/I ratio.

A better 4QFY26F. We expect 4QFY26F to be the best quarter of the year FY26F for AEONTS, driven mainly by gains from NPL sales and lower credit cost (from ECL reversal). Moreover, we expect its interest income to grow (from loan and yield expansion), while interest expense is expected to be lower (from declining cost of funds).

FY26F/FY27F earnings cut mainly to reflect higher credit cost assumptions. As we incorporated its 3QFY26F (Sep-Nov 2025) results and revised our key forecast assumptions, we cut our FY26F/FY27F earnings by 3%/8%. Specifically, we (i) raised FY26F/FY27F credit cost to 8.4%/8.0% (vs. 7.8%/7.4% previously), (ii) cut C/I ratio to 42.5%/42.5% (vs. 43.9%/44.0% previously), and (iii) cut loan growth to -1.0%/+1.2% (vs. -0.1%/+2.0% previously).

Maintain BUY with a lower TP of THB120. As we revised our FY26F/FY27F earnings, lowered our target P/BV multiple to 2.0SD below its average P/BV (vs. 1.5SD below its average P/BV previously), and rolled forward our valuation base to FY27F (end-Feb), we derived a lower TP of THB120 (vs. THB130 previously) for AEONTS. Our TP is based on 1.06x FY27F (end-Feb) P/BV, i.e., 2.0SD below its average P/BV. While we expect AEONTS’s loan growth to remain relatively flat in FY27F, we expect its earnings to be able to expand 8.8% y/y. At the current share price, we estimate AEONTS to deliver a total return of 26.4%, comprising 20.9% upside and a 5.5% dividend yield. Our BUY rating stands.


AEONTS: 3QFY26 (Sep-Nov 2025) results review

Source of all data: Company, DBSVTH