Our HOLD call stands. SAWAD currently trades at a 2023 PER of 11.8x, below its historical range, but we forecast a 2023-24 earnings CAGR of 14%, significantly slower than its previous trend. The following unfavor-able factors are in play: 1) heavy LLPs, due to deteriorating asset quality (we expect NPLs to rise in 2023), 2) intensifying competition (led by new market entrants), and 3) rising funding costs. Our YE23 target price is Bt49, pegged to a PBV of 2.1x (1.4SD below SAWAD’s long-term mean of 3.1x).
Result was in line with our estimate
SAWAD posted 3Q22 earnings of Bt1.19bn, up by 7% YoY and 14% QoQ. The result was in line with our estimate and the Bloomberg consensus. Pre-provision operating profit was Bt1.4bn, up 1% YoY but down 2% QoQ. 9M22 earnings comprise 72.4% of our full-year forecast of Bt4.5bn.