Bualuang Sees SAWAD as Attractive, Earnings Recovering, Share Price Poised to Run

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Bualuang Securities assesses that SAWAD is an attractive stock, with this year's earnings trend set to hit a new record, asset quality remaining stable, and valuation still compelling at a PER of just 7.4 times. The research team expects earnings per share this year to grow 13 percent compared to the previous year, and maintains a buy recommendation with a new 2027 target price of 37 baht. The research team notes that SAWAD has tightened lending for over two years, particularly reducing motorcycle hire-purchase loans by as much as 28 percent over the past two years, leading to better asset quality for new customers and a continuous decline in losses from repossessed vehicles. Adjusted credit cost, which includes losses from repossessed vehicles, is expected to fall from 4.5 percent in the third quarter of 2023 to 2.6 percent in 2028. In addition, asset quality in the retail loan segments of KKP and TISCO remains sound, and NCAP, a motorcycle hire-purchase provider similar to SAWAD's subsidiary, has also reported improved asset quality, indicating that SAWAD's asset quality direction is likely to remain positive. The research team forecasts SAWAD's second-quarter 2026 profit at 1.4 billion baht, reaching a quarterly high, growing 10 percent year-on-year and 4 percent quarter-on-quarter, driven by loan growth, NIM expansion, and a lower cost-to-income ratio, while asset quality is expected to be stable compared to the previous quarter at the end of the second quarter of 2026. Third-quarter 2026 profit is expected to continue setting new records at 1.4 billion baht, up 8 percent year-on-year and 3 percent quarter-on-quarter, supported by loan and NIM expansion. The research team has raised its 2026 to 2027 net profit estimates by 6 percent, reflecting better-than-expected trends in repossessed vehicle losses and NIM, with 2026 profit forecast to grow 13 percent year-on-year to a new high, and views the current valuation as attractive, with the market having an opportunity to re-rate the stock.

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Bualuang Securities maintains buy with target price 37 baht, citing record earnings and attractive valuation.