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THAILAND EQUITY RESEARCH
Page | 1 | PHILLIP SECURITIES (THAILAND)
Srisawad Power 1979
3QFY15 net profit hits record high
THAILAND | SET | FIN | COMPANY RESULTS BLOOMBERG SAWAD TB l REUTERS SAWAD.BK
3QFY15 net profit up 64.9% y‐y, 27.1% q‐q, hits record high SAWAD’s 3QFY15 net profit hits record high at Bt370mn, up 64.9% y‐y and 27.1% q‐q, as interest income increased in tandem with loan growth, which drove non‐interest income higher, and loan‐loss provision declined. Loan on the rise but growth pace declines to the year’s lowest level, NPL to loan narrows Loan continued to grow by 6.6% q‐q in 3QFY15, taking YTD growth to 33.3%. The pace of growth however declined to the year’s lowest level after SAWAD registered loan growth of 11.9% and 11.8% in 1Q‐2QFY15. NPL rose to Bt527mn vs a 521mn in the prior quarter, but NPL to loan decreased to 5% from 5.3% in 2QFY15. 4QFY15 revenue seen up but profit likely to decline q‐q on higher expense We expect revenue to continue to grow q‐q in 4QFY15 as loan is likely to accelerate, given lower growth pace and holiday shopping season during late year. However, net profit looks likely to decline as operating expenses are expected to increase from an opening of new branches, marketing campaigns, and an annual bonus for employees. FY15‐FY16 net profit forecast revised up on lower provision and stronger‐than‐expected loan yield We raise our FY15‐FY16 net profit forecast by 6.5% and 13.7% to Bt1.2bn and Bt1.7bn to reflect its lower provision due to effective NPL management, and stronger‐than‐expected loan yield. We also increase our dividend assumption to Bt0.49 and Bt0.65 for 2015‐2016 performances. ‘BUY’ rating with a FY16 target price of Bt55/share Rolling forward to FY16 valuation, our target price is Bt55. We have a ‘BUY’ call for SAWAD as we foresee bright earnings growth, given strong growth in retail loan and its new nano finance business.
Ref. No.: CO2015_0838
Closing Price(Bt) 45.75
Target Price(Bt) 55.00 (+20.22%)
COMPANY DATA
O/S Shares (mn) : 1,020
Market Cap. (Btmn) :
Market Cap. (USDmn) :
52‐WK Hi/Lo (Bt) : 46.25/20.29
3M Average Daily T/O (mn) : 3.77
Par Value (Bt) : 1.00
MAJOR SHAREHOLDERS (%)
1. Miss Thida Keawbutta 37.2
2. Miss Duangjai Keawbutta 6.3
3. Mrs. Chariya Keawbutta 6.0
PRICE PERFORMANCE (%)
1MTH 3MTH 1YR
ABS 23% 20% 120%
REL TO SET INDEX 40% 38% 111%
PRICE VS SET INDEX
Source: Bloomberg, PSR
KEY FINANCIALS
FYE Dec FY13 FY14 FY15E FY16E
Revenue(Btmn) 1,707 2,471 3,371 4,220
Net Profit(Btmn) 575 855 1,242 1,664
EPS (Bt) 0.77 0.85 1.22 1.63
P/E (X) 59.6 53.5 37.6 28.1
BVPS (Bt) 1.44 3.43 4.54 5.68
P/B (X) 31.8 13.3 10.1 8.1
DPS (Bt) 0.17 0.15 0.49 0.65
Dividend Yield (%) 0.4 0.3 1.1 1.4
ROE (%) 71.48 37.90 31.02 32.88
Debt/Equity (X) 5.56 2.50 2.43 2.39
Source: Company, PSR Est.
**Multiples and yields are based on latest closing price
VALUATION METHOD
PEG'16 (1x)
Adisorn Mungparnchon
Securities Investment Analyst # 18577
Tel: 66 2 635 1700 # 497
07 May 2015
Buy (Maintain)
16 November 2015
46,665
1,299
0
20
40
60
Nov‐12 Nov‐13 Nov‐14 Nov‐15
SAWAD TB EQUITY SETI (rebased)
THAILAND EQUITY RESEARCH
PHILLIP SECURITIESS (THAILAND) | 2 | P a g e
Srisawad Power 1979 COMPANY RESULTS
Income Statement
Btmn 3Q15 2Q15 3Q14 q‐q+/‐ y‐y+/‐ 9M15 9M14 y‐y+/‐Interest income 749 652 511 15% 47% 2,009 1,401 43%Interest expense ‐76 ‐64 ‐48 19% 60% ‐204 ‐170 20%Net interest incom e 673 588 463 14% 45% 1,805 1,232 46%Other incom e 244 230 186 6% 31% 683 535 28%Total Non-Interest Income 244 230 186 6% 31% 683 535 28%Total Incom e 917 818 649 12% 41% 2,487 1,767 41%Operating expense 435 401 323 9% 35% 1,193 874 36%Pre provioning profit 482 418 326 15% 48% 1,294 893 45%Impairment loss of loans and debt securities ‐22 ‐51 ‐45 ‐58% ‐52% ‐120 ‐165 ‐27%Profit from operating before incom e tax expense 461 366 281 26% 64% 1,175 728 61%Taxation ‐91 ‐75 ‐57 21% 60% ‐236 ‐140 68%Minority 6 5 2 20% 200% 15 3 400%
Net profit 370 291 224 27% 65% 939 588 60%
EPS (Bt) 0.36 0.29 0.22 27% 62% 0.93 0.65 43%
Key Financial Ratio
% 3Q15 2Q15 3Q14 q‐q+/‐ y‐y+/‐ 9M15 9M14 y‐y+/‐
Yie ld on Ea rning As s et 24.16% 23.19% 24.37% 4% ‐1% 23.92% 24.22% ‐1%
Cos t of Fund 15.76% 9.92% 4.79% 59% 229% 11.12% 5.92% 88%
Spread 8.39% 13.27% 19.58% ‐37% ‐57% 12.79% 18.29% ‐30%
NIM 21.69% 20.90% 22.08% 4% ‐2% 21.48% 21.25% 1%
NPL 5.00% 5.30% 6.36% ‐6% ‐21% 5.00% 6.36% ‐21%
Balance Sheet
Btmn 3Q15 2Q15 3Q14 q‐q+/‐ y‐y+/‐ 9M15 9M14 y‐y+/‐
As se ts 12,365 10,806 7,626 14% 62% 12,365 7,626 62%
Lia bi l i ti e s 7,991 6,808 4,461 17% 79% 7,991 4,461 79%
Pa id ‐up (mn s hrs ) ‐ Pa r Bt1 1,020 1,020 1,000 0% 2% 1,020 1,000 2%
Equi ti e s 4,368 3,998 3,165 9% 38% 4,368 3,165 38%
BVPS (Bt) 4.28 3.92 3.17 9% 35% 4.28 3.17 35%
D/E ra ti o 1.8 1.7 1.4 7% 30% 1.8 1.4 30%
THAILAND EQUITY RESEARCH
PHILLIP SECURITIESS (THAILAND) | 3 | P a g e
Corporate Governance ‐2014
BAFS BCP BTS CPN EGCO GRAMMY HANA INTUCH IRPC TOP
KBANK KKP KTB MINT PSL PTT PTTEP PTTGC SAMART IVL
SAT SC SCB SE‐ED SIM SPALI TISCO TMB THCOM SAMTEL
AAV ACAP ADVANC ANAN AOT ASIMAR ASK ASP BANPU BAY
BBL BECL BIGC BKI BLA BMCL BROOK CENTEL CFRESH CIMBT
CK CNT CPF CSL DELTA DRT DTAC DTC EASTW EE
ERW GBX GC GFPT GUNKUL HEMRAJ HMPRO ICC KCE KSL
LANNA LH LHBANK LOXLEY LPN MACO MC MCOT NBC NCH
NINE NKI NMG NSI OCC OFM PAP PE PG PHOL
PJW PM PPS PR PRANDA PS PT QH RATCH ROBINS
RS S & J SAMCO SCC SINGER SIS SITHAI SNC SNP SPI
SSF SSI SSSC STA SVI TCAP TF THAI THANI TSTE
TIP TIPCO TK TKT TNITY TNL TOG TRC TRUE
TSTH TTA TTW TVO UAC VGI VNT WACOAL
2S AF AH AHC AIT AJ AKP AKR AMANAH AMARIN
AMATA AP APCO APCS AQUA ARIP AS ASIA AYUD BEAUTY
BEC BFIT BH BJC BJCHI BOL BTNC BWG CCET CGD
CGS CHOW CI CKP CM CMR CSC CSP CSS DCC
DEMCO DNA EA ESSO FE FORTH FPI GENCO GL GLOBAL
GLOW GOLD HOTPOT HTC HTECH HYDRO IFS IHL INET IRC
IRCP ITD KBS KGI KKC KTC L&E LRH LST MAJOR
MAKRO MATCH MBK MBKET MEGA MFC MFEC MJD MODERN MONO
MOONG MPG MTI NC NTV NUSA NWR NYT OGC OISHI
PACE PATO PB PDI PICO PPM PPP PREB PRG PRIN
PTG QLT QTC RCL SABINA SALEE SCBLIF SCCC SCG SEAFCO
SEAOIL SFP SIAM SIRI SKR SMG SMK SMPC SMT SOLAR
SPC SPCG SPPT SST STANLY STEC STPI SUC SWC SYMC
SYNEX SYNTEC TASCO TBSP TEAM TFD TFI THANA THIP THREL
TIC TICON TIW TKS TLUXE TMI TMT TNDT TPC TPCORP
TRT TRU TSC TTCL TUF TVD TWFP UMI UP UPF
UPOIC UT UV UWC VIH WAVE WHA WIN WINNER YUASA
ZMICO
Score Range
< 50%
50‐59%
60‐60%
70‐79%
80‐89%
90‐100%
The disclosure of the survey result of the Thai Institute of Directors Association (IOD)
regarding corporate governance is made pursuant to the Office of the Securities and
Exchange Commission. The survey of the IOD is based on the information of a company
l isted on the Stock Exchange of Thai land and the Market for Alternative disclosure to the
public and able to be accessed by a general public investor. The results, therefore, is from
the perspective of a third party. It is not an evaluation of operation and is not based on
inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai
Listed Companies. As a result, the survey result may be changed after that data. Phil l ip
Securities (Thai land) of securities company does not confirm nor certify the accuracy of
such survey result.
No logo given
Number of Logo
Results Presentation
THAILAND EQUITY RESEARCH
PHILLIP SECURITIESS (THAILAND) | 4 | P a g e
Industry Group Name Sector Name Sector Index
Agro & Food Industry[AGRO] Agribusiness AGRI
Food & Beverage FOOD
Consumer Products[CONSUMP] Fashion FASHION
Home & Office Products HOME
Personal Products & Pharmaceuticals PERSON
Financials [FINCIAL] Banking BANK
Finance & Securities FIN
Insurance INSUR
Industrials [INDUS] Automotive AUTO
Industrial Materials & Machinery IMM
Packaging PKG
Paper & Printing Materials PAPER
Petrochemicals & Chemicals PETRO
Steel STEEL
Property & Construction[PROPCON] Construction Materials CONMAT
Construction Services CONS
Property Development PROP
Property Fund & REITs PF&REIT
Resources [RESOURC] Energy & Utilities ENERG
Mining MINE
Services [SERVICE] Commerce COMM
Media & Publishing MEDIA
Health Care Services HELTH
Tourism & Leisure TOURISM
Professional Services PROF
Transportation & Logistics TRANS
Technology [TECH] Electronic Components ETRON
Information & Communication Technology ICT
PSR Rating SystemCapital Gain Recommendation
> +10% Buy
0% to + 10% Neutral
< 0% Sell
Remarks
We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a
stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative
undertones surrounding the stock, before making our final recommendation
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