Our TP is THB168 for AEONTS. We derive our valuation by using a Gordon Growth Model (GGM) as we believe this represents the intrinsic value of the company as well as the potential net profit that the company might generate from its net assets. Using GGM, we assume: i) LT ROE of 12.8%, ii) LT growth of 6.0%, and iii) CoE of 10.6%. We arrive at an FY26E GGM-based TP of THB168, pegged at 1.48x FY26E PBV, -0.5 STD below its 3-year average.

Key downside risks that could impede the stock from reaching our TP include: 1) a slow economic recovery, resulting in weak asset quality, 2) regulatory risks from the Bank of Thailand that might impact business operation, 3) fintech/newcomer disruption that could disrupt the pricing of unsecured personal lending. Upside risks to our target price include: 1) efficient cost of funding management, 2) better asset quality control, and 3) higher and faster resumption of personal loans expansion, resulting in higher loan yields.