THAILAND EQUITY RESEARCH  

Page | 1 | PHILLIP SECURITIES (THAILAND)  

Srisawad Power 1979 4QFY15 profit hits new record of Bt397mn THAILAND | SET | FIN | COMPANY RESULTS BLOOMBERG SAWAD TB l REUTERS SAWAD.BK  4QFY15 profit hits new record of Bt397mn, up 48.7% y‐y and 7.3% q‐q SAWAD posted a new record profit of Bt397mn in 4QFY15, up 48.7% y‐y and 7.3% q‐q. Much of the impressive showing in this period was due chiefly to (i) a notable rise of 45.5% y‐y and 7.5% q‐q in interest income driven largely by strong loan growth and (ii) a substantial increase of 40.2% y‐y and 14.6% q‐q in non‐interest income. The solid revenue growth was also strong enough to offset a dramatic rise of up to 102.6% y‐y and 124.6% q‐q in provisions and a surge of as much as 40.1% y‐y and 11.4% q‐q in expenses.   Loan pickup in 4QFY15 pushes FY15 loan growth up as high as 45.9% while NPL to loan ratio drifts lower In 4QFY15, SAWAD recorded  loan growth of 9.4% q‐q, which accelerated  from a 6.6% q‐q rise  in 3QFY15 and brought its full‐year loan growth to as high as 45.9%. Much of the loan growth continued to come from general  loans rather than hire purchase  loans. Even though  its NPLs crept higher to Bt562mn in 4QFY15 from Bt527mn in 3QFY15, strong loan growth however helped push its NPL to loan ratio lower to 4.9% in 4QFY15 from 5% in 3QFY15.  Cash and stock dividends  Following results announcement, SAWAD also declared a cash dividend of Bt0.003/share and a 40‐for‐1  stock  dividend,  equivalent  to  a  cash  dividend  of  Bt0.025/share.  The  stock will  trade  ex‐dividend (XD) on Apr 28, 2016 and the dividend is scheduled to be paid on May 19.  FY16 profit outlook revised up to Bt1.8bn, up 34.4% y‐y To  reflect  stronger‐than‐expected  loan growth  in FY15 and expectations  that  strong  loan growth momentum will  continue  into FY16 at a pace of around 30%, we  ratchet up our FY16 net profit outlook  for SAWAD  to Bt1.8bn  from a previous view of Bt1.7bn. The new profit  target  implies a growth of 34.4% y‐y. In view of its strong earnings growth outlook, there remains scope for SAWAD to distribute stock dividend in FY16. If we assume SAWAD will pay only cash dividend, we estimate it will dole out a dividend of Bt0.34/share in FY16 based on the above new profit estimate.  FY16 target price cut to Bt53.50/share but ‘BUY’ rating reaffirmed  Despite FY16 earnings upgrade, the increasing number of shares from the capital increase for stock dividend  payout  and  the  decelerating  growth  rate  outlook  after  several  straight  years  of  stellar growth give us an excuse to slash our FY16 target price for SAWAD to Bt53.50/share based on a PEG of 1x but we reaffirm a ‘BUY’ rating on SAWAD shares as the new target still offers more upside from current trading levels.   

                 

Ref. No.: CO2016_0191   

Closing Price(Bt) 45.50Target Price(Bt) 53.50 (+18.34%)

COMPANY DATA

O/S Shares (mn) : 1,020    Market Cap. (Btmn) :Market Cap. (USDmn) :52‐WK Hi/Lo (Bt) : 50/33.53M Average Daily T/O (mn) : 4.52Par Value (Bt) : 1.00

MAJOR SHAREHOLDERS (%)

1. Miss Thida Keawbutta 37.22. Miss Duangjai Keawbutta 6.33. Mrs. Chariya Keawbutta 6.0

PRICE PERFORMANCE (%)

1MTH 3MTH 1YRABS ‐3% ‐5% 9%REL TO SET INDEX 15% 14% 9%

PRICE VS SET INDEX

Source: Bloomberg, PSR

KEY FINANCIALS

FYE Dec FY14 FY15 FY16E FY17ERevenue(Btmn) 2,471 3,496 4,915 5,459Net Profit(Btmn) 855 1,336 1,796 2,002EPS (Bt) 0.92 1.32 1.72 1.92P/E (X) 49.5 34.5 26.5 23.8BVPS (Bt) 3.43 4.67 6.30 7.87P/B (X) 13.3 9.7 7.2 5.8DPS (Bt) 0.00 0.00 0.34 0.38Dividend Yield (%) 0.0 0.0 0.8 0.8ROE  (%) 37.90 15.65 10.97 9.55Debt/Equity (X) 2.50 1.00 1.00 1.00

Source: Company, PSR Est.**Multiples and yields are based on latest closing price

VALUATION METHOD

PEG'16 (1x)

Adisorn MungparnchonSecurities Investment Analyst # 18577Tel: 66 2 635 1700 # 497

07 May 2015

Buy (Maintain)

01 March 2016

1,302                                                 46,410                                              

0

20

40

60

Feb‐13 Feb‐14 Feb‐15 Feb‐16SAWAD  TB EQUITY SETI (rebased)

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Srisawad Power 1979 COMPANY RESULTS

Income StatementBtmn 4Q15 3Q15 4Q14 q‐q+/‐ y‐y+/‐ 2015 2014 y‐y+/‐Interest income 805 749 553 7.5% 45.5% 2,814 1,955 44%Interest expense ‐76 ‐76 ‐49 0.0% 56.0% ‐281 ‐219 28%Net interest income 729 673 504 8.3% 44.5% 2,534 1,736 46%Other income 280 244 200 14.6% 40.2% 963 735 31%Total Non-Interest Income 280 244 200 14.6% 40.2% 963 735 31%Total Income 1,009 917 704 10.0% 43.3% 3,496 2,471 41%Operating expense 485 435 346 11.4% 40.1% 1,678 1,220 37%Pre provioning profit 524 482 358 8.7% 46.4% 1,818 1,251 45%Impairment loss of loans and debt securities ‐48 ‐22 ‐24 124.6% 102.6% ‐168 ‐189 ‐11%Profit from operating before income tax expense 476 461 334 3.2% 42.4% 1,650 1,062 55%Taxation ‐79 ‐91 ‐67 ‐13.5% 17.3% ‐314 ‐207 52%Minority 7 6 3 16.7% 133.3% 22 6 267%Net profit  397 370 267 7.3% 48.7% 1,336 855 56%EPS (Bt) 0.39 0.36 0.27 7% 46% 1.32 0.92 43%

Key Financial Ratio% 4Q15 3Q15 4Q14 q‐q+/‐ y‐y+/‐ 2015 2014 y‐y+/‐Yield on Earning Asset 24.03% 24.16% 24.14% ‐1% 0% 24.04% 23.69% 1%Cost of Fund 21.49% 15.76% 5.32% 36% 304% ‐5.03% ‐5.13% ‐2%Spread 2.54% 8.39% 18.81% ‐70% ‐86% 19.00% 18.56% 2%NIM 21.75% 21.69% 22.00% 0% ‐1% 21.64% 21.04% 3%NPL 4.86% 5.00% 5.71% ‐3% ‐15% 4.86% 5.71% ‐15%

Balance Sheet Btmn 4Q15 3Q15 4Q14 q‐q+/‐ y‐y+/‐ 2015 2014 y‐y+/‐Assets 13,640 12,365 8,592 10% 59% 13,640 8,592 59%Liabi l ities 8,868 7,991 5,160 11% 72% 8,868 5,160 72%Paid‐up (mn shrs) ‐ Par Bt1 1,020 1,020 1,000 0% 2% 1,020 1,000 2%Equities 4,766 4,368 3,432 9% 39% 4,766 3,432 39%BVPS (Bt) 4.67 4.28 3.43 9% 36% 4.67 3.43 36%D/E ratio 1.9 1.8 1.5 2% 24% 1.9 1.5 24%

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Corporate Governance ‐2015

ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTCEASTW EGCO GRAMMY HANA HMPRO INTUCH IRPC IVL KBANK KCEKKP KTB LHBANK LPN MCOT MINT MONO NKI PHOL PPSPS PSL PTT PTTEP PTTGC  QTC RATCH ROBINS SAMART SAMTELSAT SC SCB SCC SE‐ED SIM SNC SPALI THCOM TISCOTKT TMB TOP VGI WACOAL

AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIPASIMAR ASK ASP BANPU BAY BBL BDMS BECL BKI BLABMCL BOL BROOK BWG CENTEL CFRESH CHO CIMBT CM CNTCOL CPF CPI CSL DCC DELTA DEMCO ECF EE ERWGBX GC GFPT GLOBAL GUNKUL HEMRAJ HOTPOT HYDRO ICC ICHIINET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBKMC MEGA MFEC NBC NCH NINE NSI NTV OCC OGCOISHI OTO PAP PDI PE PG PJW PM PPP PRPRANDA PREB PT PTG Q‐CON QH RS S & J SABINA SAMCOSCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMTSNP SPI SSF SSI SSSC SST STA STEC SVI SWCSYMC SYNTEC TASCO TBSP TCAP TF TGCI THAI THANA THANITHIP THRE THREL TICON TIP TIPCO TK TKS TMI TMILLTMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUETSC TSTE TSTH TTA TTCL TTW TU TVD TVO TWFPTWS UAC UT UV VNT WAVE WINNER YUASA ZMICO

2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAHAMARIN AP APCO AQUA AS ASIA AUCT AYUD BA BEAUTYBEC BFIT BH BIG BJC BJCHI BKD BTNC CBG CGDCHG CHOW CI CITY CKP CNS CPALL CPL CSC CSPCSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIREFOCUS FORTH FPI FSMART FSS FVC GCAP GENCO GL GLANDGLOW GOLD GYT HTC HTECH IEC IFEC IFS IHL IRCPITD JSP JTS JUBILE KASET KBS KCAR KGI KKC KTISKWC KYE L&E LALIN LHK LIT LIVE LST M MAJORMAKRO MATCH MATI MBKET M‐CHAI MFC MILL MJD MK MODERNMOONG MPG MSC MTI MTLS NC NOK NUSA NWR NYTOCEAN PACE PATO PB PCA PCSGH PDG PF PICO PLPLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCIRCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCNSCP SEAOIL SIRI SKR SMG SOLAR SORKON SPA SPC SPCGSPPT SPVI SRICHA SSC STANLY STPI SUC SUSCO SUTHA SYNEXTAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TIC TIWTLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMIUP UPF UPOIC UREKA UWC VIBHA VIH VPO WHA WINXO

Score Range

< 50%

50‐59%

60‐69%

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 Thailand 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  (Thailand) of securities  company does  not confirm nor certify the accuracy of such survey result.

No logo given

Number of Logo

Results Presentation

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Anti‐corruption indicators

Level 5 (Extended)BCP CPN GYT PE PM PPP PT PTT PTTGC SAT sccTHANI TOP

Level 4 (Certified) DCC DTC DRT EASTW ECL EGCO ERW FSS GCAP HANA HTCINTUCH IRPC IVL KBANK KCE KGI KKP KTB LANNA LHBANK MTINKI PSL PTG PTTEP SABINA SCB SNC SNP SSF SSSC TCAP

THCOM TISCO TMB TMD TNITY TOG

Level 3 (Established) 

Level 3A: Declaration to join CAC, etcABC ACAP ADVANC AGE AH AMANAH ANAN AP APCS APURE ASASIA ASIAN ASIMAR BIGC BROOK BTS BWG CEN CENTEL CFRESH CHARANCHO CHOTI CM CNT COL CPF CPI CPL DELTA DEMCO DIMETDNA DTAC EA ECF EE EVER FPI GBX GC GFPT GLOWHMPRO HOTPOT ICC ICHI IFEC INOX INSURE IRC JAS JTS JUBILEKC KTC KYE LHK LPN LRH MAKRO MC MCOT MFC MFECMINT MJD MONO MOONG NBC MSC NDR NINE NMG NSI NTVOGC PACE PCSGH PDI PG PHOL PLAT PPS PR PRANDA PREBPS QLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOILSE‐ED SENA SINGER SITHAI SMK SMPC SPALI SPC SPCG SPI SRICHASSI STANLY SUPER SVI SYMC SYNEX SYNTEC TASCO TCMC TFI THAITHRE THREL TICON TKT TLUXE TMILL TMT TNL TPCORP TSTE TSTH

TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHA ZMICO

Level 3B: Organization's statement but no declaration to join CAC, etcAAV AHC AIT AKR ARROW ASK BA BDMS BEC BJCHI BUICGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASONEPG F&D FANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMYHYDRO IRCP IT JCT KCM KWC LH LIT LOXLEY MACO MANRINMATI MODERN MSC NOBLE NOK NPK NUSA OISHI OTO PAF PAPPATO PF PJW PLANB PLE POLAR PRG PTL Q‐CON QTC RCIS11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIM SLPSMT SPA SPORT SSC SST STEC STPI SUC SUTHA SVI TTBSP TAE TCC TFD TGCI TGPRO THANA THIP TIW TK TMWTNDT TOPP TPC TPCH TPIPL TSR TT TYCN UAC UBIS UECUMI UP UPF UT UV VPO WAVE WINNER YUASA

Level 2 (Declared)2S ABICO AF AKP AMARIN AMATA AOT APCO AYUD BEAUTY BFITBH BKD BLAND BTNC CCP CI CSR CSS EFORL EPCO FEFNS FVC GEL GLOBAL HEMRAJ IEC IFS INET JUTHA KASET KCARKKC KSL L&E LALIN LTX M MALEE MBK MBKET MEGA MKMPG MTLS NCH NCL NPP OCC OCEAN PB PCA PRINC QHROCK RPC S & J SGP SIAM SIS SKR SMG SMIT SORKON SUSCOTAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPP TRT TRUTRUE TSC TSI TTW TVD TVO UKEM UNIQ UWC VNG WIIKWIN XO

Level 1 (Committed)ACD AEONTS AFC AIRA AJ ALUCON AMC AQUA ARIP AUCT BAT‐3KBIG BJC BOL BRR BSBM CBG CCET CCN CGD CMR CPHCSC CSP CTW DCON DRACO DSGT DTCI E EMC ESSO FOCUSFSMART GIFT GLAND GRAND GUNKUL HFT HTECH ILINK ITD JSP IHLKDH KTIS KTP LEE LST MAJOR MAX M‐CHAI MDX MIDA MATCHML MPIC NC NEP NNCL OHTL PICO PK PL PPM NWRPRAKIT PRECHA PRIN PSTC RAM RICH RS SANKO SAUCE SAWAD PYLONSAWANG SCN SEAFCO SHANG SIRI SMART SMM SOLAR SPACK SPG SFSPPT SPVI STAR SVH SVOA SWC TAPAC TC TCCC TCJ STATCOAT TKS TNH TNPC TPA TPAC TPOLY TRC TRUBB TSE TTATTI TTL TTTM TWP TWZ U UMS UPA UPOIC UVAN UTPVARO VI VIBHA VIH VTE WG

Data not available/No policyA ACC AJD AQ BCH BGT BROCK BSM BTC CHUO CRANECPR EIC FER JMART JMT KAMART KBS KIAT LDC MCS METCOMBAX NEW NEWS NYT PAE PDG PERM PMTA RCL RICHY ROHPOST S SIMAT TCB TR TSF TVT

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Anti‐corruption indicators

Level 5 : Extended

Anti‐corruption policies extend to business partners, dealers, and distributors.

Level 4 : Certified

Anti‐corruption policies can be engaged by audit committee and auditors approved by the SEC.

Anti‐corruption policies are certified by CAC and independent assurance providers.

Level 3 : Established

Anti‐corruption corruption policies cover anti‐bribery, and communications and educating all employees anti‐corruption policies.

 

Level 3A  Public out statement to join CAC, etc.

Level 3B Declare statement and organization’s anti‐corruption policies but no intention to join CAC, etc.

Level 2 : Declared

Declare statement to participate CAC against corruption.

Level 1 : Committed

Organization and Board of Directors’ statements against corruption and not getting involve in any malpractices.

AssessmentAnti‐corruption progress indicator for listed companies is a part of SEC’s commitment to create sustainability in anti‐corruption and to become a role model to any 

related business. The progress indicators comprise of five levels: 1) Committed, 2) Declared, 3) Established, 4) Certified, and 5) Extended. These indicators will 

encourage listed firms to formulate anti‐corruption policies to opt out of corruption, and investors can determine their investment based on anti‐corruption indicator 

or avoid investment in listed firms that could get involve in corruption.

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Industry Group Name Sector Name Sector IndexAgro & Food Industry[AGRO]  Agribusiness AGRI

Food & Beverage FOODConsumer Products[CONSUMP] Fashion FASHION

Home & Office Products HOMEPersonal  Products  & Pharmaceuticals PERSON

Financials  [FINCIAL] Banking BANKFinance & Securities FINInsurance INSUR

Industrials  [INDUS] Automotive AUTOIndustrial  Materials  & Machinery IMMPackaging PKGPaper & Printing Materials PAPERPetrochemicals  & Chemicals PETROSteel STEEL

Property & Construction[PROPCON] Construction Materials CONMATConstruction Services CONS Property Development PROPProperty Fund & REITs PF&REIT 

Resources  [RESOURC] Energy & Util ities ENERGMining MINE

Services  [SERVICE] Commerce COMMMedia  & Publishing MEDIAHealth Care Services HELTHTourism & Leisure TOURISMProfessional  Services PROFTransportation & Logistics TRANS

Technology [TECH] Electronic Components ETRONInformation & Communication Technology ICT

PSR Rating SystemCapital Gain Recommendation> 15% BUY> 5% ‐ 15% ACCUMULATE / TRADING BUY> 0% ‐ 5% NEUTRAL0 <= SELL

RemarksWe do not base our recommendations  entirely on the  above quantitative return bands.  We consider qualitative factors  l ike (but not l imited to) a  stock's  risk reward profi le, 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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