Key Rating Drivers
Established Independent Franchise: ASP's ratings reflect a well-established franchise in Thailand's securities brokerage sector. The company has built scale and resilience despite competitive pressure, supported by a diversified revenue mix, a sound market position among non-bank-backed brokers, moderate leverage and adequate liquidity. These strengths have helped ASP deliver a generally steady financial performance through downturns in trading volume, the stock market and the broader economy, including recent challenges.
Headwinds Remain for Securities Firms: Thai securities firms remain under pressure from weak stock market sentiment. Equity market trading volume had declined by 7% year on year by end-3Q25 (2024: -12%), and IPO activity has been scarce. Companies are increasingly diversifying into wealth management and offshore products, but we expect near-term earnings upside to remain limited and for the market to remain volatile.
Asset Quality Reflects Volatility: We believe further downside risk to impaired loans is limited after a one-off increase to 2.6% of gross loans at end-June 2025 (end-December 2024: 0.2%) due to an industry-wide forced sell on a collateral stock in 1Q25. ASP has set a 100% allowance for doubtful accounts, providing capacity to write off bad debt and limiting further performance pressure. A 60% decline in margin-loan exposure in 1H25 amid a tightened underwriting policy also tempers the risk.
We see adequate headroom on asset quality at the current rating level despite the higher impaired loan ratio; ASP's history of low impaired ratios and consistent 100% loan loss reserve coverage supports a position superior to peers.
Profitability Risks Elevated: We expect only a modest rebound in profitability, and it is unlikely to return to the 14% average seen during 2021-2024 over the next two years. ASP is rebuilding its investment management arm through new fund launches and broader distribution, while tightening costs, but we expect these initiatives will provide only limited support to earnings in the near term. Significantly weakened profitability for a prolonged period would be negative for the rating profile.
ASP's earnings softened in 1H25, with annualised operating profit/average equity at 2.8% (sector average: 3.1%), against 9.2% in 2024, amid subdued equity markets, weaker performance at its fund-management subsidiary, and lower investment returns. Brokerage and investment banking fees remain subdued, with margin lending curbs weighing on income.
Manageable Capital Buffer: ASP's leverage can fluctuate with market activity, as is typical for many securities firms, but we expect the capital base to continue providing a moderate buffer against volatility and downside risk. We also expect the share repurchase programme held in 3Q25 to have a limited impact on net adjusted leverage of around 0.1x. ASP's net adjusted leverage was 1.6x at end-June 2025, down from 1.8x at end-2024, reflecting slower trading volumes and lower margin loans.
Strengthened Liquidity Profile: ASP's liquidity strengthened as subdued markets and lower margin loans created excess cash. ASP relies somewhat on wholesale funding like other Thai securities firms, but it has repaid most short-term debt. This lifted the core liquidity ratio (cash and liquid investments/short-term funding) to 15.8x at end-June 2025, from 1.8x at end-2024. Cash outflows from the share repurchase in 3Q25 and a potential 2026 rebound in market volumes could temper metrics, but ASP's liquidity should remain stronger than rated standalone peers.
Rated at Group Level: ASP is evaluated on a consolidated basis given close operational integration, with Asia Plus Securities Company Limited representing the majority of group assets. We view capital and liquidity as broadly transferable within the group, supporting credit profiles at both holding and subsidiary levels. We also expect holding-company double leverage will remain contained below 120% over time. This group-wide approach reflects ASP's unified risk management and cohesive financial structure.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
ASP's ratings could face pressure if financial metrics weaken markedly compared to the industry average and fall short of our expectations, prompting a reassessment of its competitive position and franchise. The four-year average operating profit/average equity ratio below 7% for a prolonged period would signal reduced earning capacity, particularly amid more volatile year-to-year returns. A persistent rise in net adjusted leverage or holding company common equity double leverage above 120% would indicate weaker capitalisation, and could lead to a downgrade.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
ASP's ratings could be upgraded if its franchise strength and consistent risk profile support sustainably stronger through-the-cycle performance compared to similarly rated peers on the National Rating scale. Evidence would include more significant and stable non-brokerage businesses that improve earnings resilience amid market volatility. Any positive action would also require no material loosening of risk appetite or weakening in capitalisation and liquidity buffers. However, such improvements appear less likely in the near term amid weak operating conditions and competitive industry dynamics.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
ASP's senior unsecured notes are rated at the same level as its National Long-Term Rating, as they represent its unsecured and unsubordinated obligations.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The senior debt ratings will move in tandem with ASP's National Long-Term Rating.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.