SAWAD jumps 5 percent after shareholders approve joint venture on auto loans

Shares of Srisawad Corporation (SAWAD), a non-bank retail loan provider, rose to a new high of 88 baht, up 5.39 per cent, Wednesday morning, after its shareholders approved turning former subsidiary Fast Money into a joint venture with the Government Savings Bank (GSB).

SAWAD was the second most traded stock as of 11.09 am, the price declined slightly to 87.50 baht, rising 4.79 per cent, with a transaction value of 1.47 billion baht.

The company notified the Stock Exchange of Thailand (SET) on Monday that it had finalized the sale of 49 percent of auto title loans unit Fast Money to GSB, following approval from an extraordinary general meeting of shareholders. SAWAD retains 49 percent of the joint venture.

The sale makes the company likely to book an investment gain of around 300 million baht in the first quarter, said KGI Securities, adding that the lending on the new platform from GSB’s customer base could begin around the second quarter.

“The investment gain will boost SAWAD’s earnings growth around 4 per cent in 2021,” KGI added. They gave an ‘Outperform’ rating on SAWAD with a target price at 101 baht.

According to local media Infoquest, the joint investment conference will be held on Thursday to provide retail borrowers an opportunity to access a fair loans system in line with government’s policy to reduce inequality in the society.

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