First Read: Srisawad Corporation "Raising earnings and PT as asset quality..."

Research evidence excerpt

First Read: Srisawad Corporation "Raising earnings and PT as asset quality..."

y drove a rise in NPLs, remains conservative as it factors in the

12/27E 2.77 3.18 15 3.57

potential impact of El Niño from late 2026-27. 12/28E 3.31 3.53 6 3.79

Q226E earnings to improve from NIM Peach Patharavanakul

AnalystWe forecast net profit of Bt1.37bn (+8% yoy, +2% qoq) in Q226, versus Bt1.34bn

peach.patharavanakul@ubs.com

(+22% yoy, +1% qoq) in Q126. Given oil price inflation in Q226, SAWAD continued to

+662-613 5717

expand car title loans and mobile hire purchase loans prudently. As a result, we project

loan growth of only 3% yoy and 1% qoq, with a seasonal recovery in loan yield (higher Mark Sriskulpinyo

Associate Analystno. of days), and downward COF repricing expected to be the main drivers of NII and

mark.sriskulpinyo@ubs.com

profit growth yoy/qoq in Q226. Although we expect the NPL formation rate to remain +662-613 5742

broadly stable yoy/qoq, we forecast SAWAD to modestly increase credit cost to keep LLR/

NPL at around 58-60%, while prioritizing OPEX discipline to preserve profitability.

Valuation: Raise PT to Bt26 from Bt23

We raise our PT to Bt26 from Bt23, implying 1.1x 2026E P/BV (up from 0.9x), based on a

sustainable ROE of 12.7% (previously 11.6%), COE of 12%, and long-term growth of

1.5%. While we are less concerned about downside risks related to the macro

environment and credit quality, we do not expect a meaningful improvement in credit

quality. As earnings momentum strengthened from Q225 to Q325 and has since

plateaued, we anticipate yoy earnings growth to normalize from Q226 onward. We

therefore maintain a Neutral rating.

Highlights (Btm) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 16,674 17,865 16,430 17,554 18,500 19,905 20,810 21,589