SAWAD profit this year expected to hit a new high, Bualuang Securities sets target at 37 baht

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Bualuang Securities assesses that SAWAD is likely to see its profit this year reach a new record high, with asset quality remaining stable and no worrying signals. The firm recommends a buy with a new 2027 target price of 37 baht, based on three reasons. First, it has been tightening loan approvals for over two years, especially reducing motorcycle hire-purchase loans by as much as 28 percent over the past two years, leading to better asset quality for new customers. Adjusted credit cost, which includes losses from repossessed vehicles, is expected to decline from 4.5 percent in the fourth quarter of 2023 to 2.6 percent in 2028. 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 improving asset quality, reflecting a positive trend for SAWAD. Second-quarter 2026 profit is forecast at 1.4 billion baht, hitting a quarterly high, growing 10 percent year-on-year and 4 percent quarter-on-quarter, driven by loan growth, expanding net interest margin, and a lower cost-to-income ratio. Asset quality is expected to be stable from the previous quarter as of the end of the second quarter of 2026. Third-quarter 2026 profit is projected to continue making new highs at 1.4 billion baht, up 8 percent year-on-year and 3 percent quarter-on-quarter, supported by loan and net interest margin expansion. Bualuang Securities has raised its 2026 to 2027 net profit estimates by 6 percent due to better-than-expected trends in repossessed vehicle losses and net interest margin. Full-year 2026 profit is expected to grow 13 percent year-on-year to a new record. Meanwhile, the current share price trades at a price-to-earnings ratio of only 7.4 times, making the valuation attractive and offering potential for a market re-rating.

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Bualuang Securities raises target price to 37 baht and expects record profit, citing improved asset quality and loan growth.

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