STGT Expects SGX’s 1st Trading Day in 2Q21, Analyst Recommends “BUY” at a TP of THB131.50

Ms. Jarinya Jirojkul, Chief Executive Officer of Sri Trang Gloves (Thailand) Public Company Limited (STGT), stated that the company will be traded at a new par value from January 5, 2021, onward, according to the approval from the Extraordinary General Meeting of Shareholders on Friday 25, December 2020, and the Stock Exchange of Thailand (SET) on December 29, 2020 from the original value of THB 1 per share to THB 0.5 per share.

 

The par splitting will result in an increase of STGT’s ordinary shares from 1,434.78 million shares to 2,869.56 million shares, which the company saw as a beneficial factor for STGT’s shareholders as well as the company itself.

STGT expected an increase in liquidity from the change in par value as investors are required to spend a lower amount to invest in STGT’s shares, resulting in an increase in free float and its attractiveness for foreign investors as well.

As for the secondary listing in the Singapore stock market (SGX) in the mainboard, the company is in the process of filing documents to the stock exchange for consideration. STGT expected to debut its trading session in SGX by 2Q21 in which there will be no issuance of new ordinary shares. The company will exercise its existing shares to trade in SGX. The listing in SGX will expand the company’s shareholder base, increase its reputation and create a channel for further funding for investment in the future.

 

Kasikorn Securities (KS) has given a “BUY” recommendation on STGT with a target price at ฿131.50/share.

KS forecasted the average selling price of STGT in 4Q20 to grow at least 50% QoQ and continue the momentum in 1Q21. KS expected STGT to benefit from the resurgence of the coronavirus outbreak, leading to higher demand. Meanwhile, STGT has the lowest valuation amid rubber-glove producers with a PER of 2021/22 at 9.1x and 3.8x, respectively, compared to an average peer at 40.1x and 9.8x.