At the end of the trading session on Thursday, the share price of Srisawad Corporation Public Company Limited (SET: SAWAD) was at THB 33.75, decreasing by THB 6.75 or 16.67%, with a trading value of THB 1.03 billion.
Finansia Syrus Securities (FSS) noted that SAWAD announced its 2024 financial statement on Wednesday, reporting a net profit of THB 1.25 billion for 4Q24, representing a 6% decrease quarter-on-quarter and a 3% drop year-on-year, which sat 9% below estimations.
The slump was largely attributed to declining returns from interest, contracting loans for the second consecutive quarter, lower-than-expected revenue from fees, and increasing QoQ losses in repossessed cars.
The company’s overall asset quality remained stable, with non-performing loans (NPL) at 3.6% as expected.
SAWAD announced dividend payout, with 10 existing shares to 1 stock dividend. The ex-dividend date (XD) is set for May 8, 2025. This move aims to reduce the debt-to-equity ratio (D/E), which has been resulting in a continuous decrease in ROE.
Following the developments, the analyst maintains a “Hold” recommendation for SAWAD due to pressures from various factors affecting the company’s ROE.
Meanwhile, CGS International Securities (CGSI) pointed out that SAWAD’s weak 4Q24 performance was due to lower-than-expected loan growth and higher cost-to-income ratio.
During the last quarter of 2024, SAWAD set aside credit cost of 141 basis points, marking a decrease of 88 basis points year-on-year and 25 basis points quarter-on-quarter. Consequently, the non-performing loan coverage ratio stood relatively low at 60% for the quarter.
The net interest margin was recorded at 14.7%, a decline of 20 basis points from the previous quarter, attributed to a 20 basis point reduction in loan yields and a 10 basis point rise in funding costs. Additionally, the cost-to-income ratio increased to 52.4%, up from 50.3% in 4Q23 and 51.1% in 3Q24.
As a result, the analyst maintained a “Hold” recommendation for SAWAD, with a 2025 target price set at THB 40.50 per share.
SAWAD is scheduled to hold an analyst meeting on February 28, 2025, at 1:30 PM Bangkok time.
