FSS International Investment Advisory Securities (FSSIA) reported that Srisawad Corporation Public Company Limited (SET: SAWAD) has posted better-than-expected earnings for the fourth quarter of 2025, with net profit exceeding both analysts’ and market estimates by 3%, reaching THB 1.33 billion. This represents an increase of 0.4% quarter-on-quarter and 8.4% year-on-year.
The performance is notable, especially considering SAWAD had to book a mark-to-market loss of approximately THB 27 million on its holdings of Thai Airways International PCL (SET: THAI) shares through its subsidiary, SCAP (in which it holds 72.05%) in the fourth quarter. This contrasts with the recorded gain of THB 51 million in 3Q25. However, the impact was mitigated by surprisingly lower operating expenses, particularly from reduced marketing incentives. Meanwhile, loss from the sale of repossessed cars was largely in line with expectations.
Net interest income and fee income were both in line with projections, although expected credit losses (ECLs) and credit costs increased more than anticipated, tracking the robust growth in new loan origination during the quarter. Pre-provision operating profit (PPOP) rose 1.7% QoQ and 12.6% YoY, amounting to THB 2.28 billion. Asset quality saw a slight expected increase in the non-performing loan (NPL) ratio, but the NPL coverage ratio decreased due to a higher level of written-off bad debt this quarter.
For the full year 2025, SAWAD’s net profit declined marginally by 0.6% YoY to THB 5.02 billion, aligning with FSSIA’s full-year forecast.
Looking forward, FSSIA expects first-quarter 2026 net profits to continue improving, driven by two key factors: (1) sustained, albeit potentially slower, loan growth momentum compared to 4Q25, and (2) decreasing credit costs from currently elevated levels. However, there could be upward pressure on the cost-to-income ratio after it dipped below normal in the previous quarter.
SAWAD announced a dividend payout for 2H25 of THB 0.35 per share, notably below FSSIA’s expectation of THB 0.85 per share, implying a half-year dividend yield of 1.2%. Adding the earlier 1H25 dividend of THB 0.35, total dividends for 2025 reached THB 0.70 per share, representing a payout ratio of 23% of 2025 net earnings (compared to FSSIA’s estimate of 40%), up from 3.1% in 2024, and a full-year dividend yield of 2.4%. The equity will receive an ex-dividend (XD) mark on May 7, 2026, with payment scheduled for May 28, 2026.
FSSIA maintains its earnings forecasts for 2026‒28 and reiterates its “BUY” recommendation for SAWAD, with a 2026 target price of THB 35 per share. This target price is based on the GGM approach, implying a price-to-book value (PBV) of 1.27 times under long-term assumptions of 16.4% return on equity and a 9.9% cost of equity.
