GT Capital Holdings Q1: Core earnings softer, waiting for Toyota margins to settle

From AB Capital's The Opening Bell: Three Moves

Event

GTCAP core net income fell 9% YoY to P7.96 billion (in line with expectations, 25% and 23% of street and AB Cap's 2026E), with reported income down 3% to P8.91 billion. Toyota and Federal Land were the main drags, while MBT provided earnings stability and MPIC non-recurring gains helped cushion reported results.

View

In our view, the portfolio remains uneven but not structurally impaired. MBT and MPIC provide defensive earnings support, while Toyota is still protecting scale with 46.1% market share, stronger financing penetration, and xEV mix rising to 10.6%.

Catalyst

Key sensitivities are FX, Toyota margins, and MBT's credit costs. Management guided that every P1 move in US$/P could affect Toyota earnings by around P1.3 billion, although pricing actions, CARS incentives, and TFS support should partly cushion the impact.

Action

We cut our RNAV-based TP by 14% to P635 but keep OUTPERFORM. The stock trades at a 48% NAV discount versus its 20% five-year average, leaving room for upside if Toyota margins stabilize and Federal Land execution improves.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.