SAWAD jumps nearly 15 percent on planned expansion into motorcycle leasing

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Shares of Srisawad Corporation (SAWAD), a non-bank retail loan provider, jumped 14.52 per cent Monday to a new high of 88.75 baht, before falling back to 82.20 as of 4:25 pm, after announcing a move to expand its high-yield motorcycle leasing activities.

The new sector yields up to 30 per cent, said an analyst at KGI Securities. The company is aiming to provide 20 billion baht in loans from this segment during 2021, up from the current 7 billion baht.

Transactions in SAWAD stock amounted to 3.9 billion baht in the afternoon session, standing as the most traded value stock of the day.

The new platform “will enable the company to cope with intensifying yield competition and help it improve loan yield,” the analyst said. He maintained an ‘Outperform’ rating on SAWAD at a new target price of 101 baht, up from 71 baht.

There are many opportunities for SAWAD such as joining with the Government Saving Bank to access to low-cost funding and a larger customer base, expanding motorcycle leasing business, and platforms to expand international business, added the analyst.

The company will book an extra investment gain of 300 million baht from selling 49 per cent equity of its subsidiary to the Government Saving Bank. “The investment gain will boost SAWAD’s earnings growth around 4 per cent in 2021,” said KGI.

Asia Plus Securities also revised SAWAD’s net profit forecast up by 9.6 per cent to 5.5 billion baht in 2021 and 5.8 per cent in 2022 to 6.4 billion baht thanks to domestic economic recovery.

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