STGT Drops 5% to Historic Low amid Wide-Range Vaccine Rollout and Economic Reopening

The share price of Sri Trang Gloves Public Company Limited (STGT) continued to move downward amid a higher vaccination rate in Thailand as well as global that could potentially lower the demand of rubber gloves in the future.

 

STGT traded at its historical low of ฿30.00/share on September 27, 2021, plunged ฿1.50/share or 4.76% with a trading value of 1,169 million baht as of 11:24 local time in Thailand. The share price fell below its IPO level of ฿34.00/share that was first traded in the Thai stock market on July 2, 2020.

 

The world is combating the new highly contagious coronavirus variant, Delta variant, in the past few months, but the overall outlook continues to improve amid an acceleration of vaccine rollout and more awareness on mask mandate. Meanwhile, nations across the globe are slowly opening their borders to boost the economy that is heavily damaged by the Covid-19 outbreak last year, and Thailand is among those reopening groups as well.

 

The share price surged as much as ฿48.25/share on May 17 this year and has been falling slowly since.

 

STGT reported a net profit of 17,331.7 million baht, up 1,068.7% from the same period of last year for its 6-month performance in 2021.

The company stated that it will ramp up STGT’s production capacity to 35,800 million pieces per year. Additionally, the company targeted to reach 100,000 million pieces of production capacity by 2026.

 

In June, Tris Rating assessed STGT’s stand-alone credit profile at an ‘A’ level. The stand-alone credit profile reflects STGT’s demonstrated strong revenue growth and cash generation with stable working capital management.

The rating company stated that STGT remains one of the world’s leading glove manufacturers with a diversified customer base, sharply improved credit metrics, as well as an experienced and professional management team. However, STGT’s business profile is constrained by the cyclical and volatile nature of raw material prices, fluctuations in foreign exchange rates, and competition from major industry players.

 

As for STGT’s competitor, Top Glove Corp Bhd, admitted recently that the company will continue to experience headwinds amid the downtrend of average selling price for gloves, higher competition and lower demand due to customers holding orders to wait for normalizing prices.

 

In addition, Sri Trang Agro-Industry Public Company Limited (STA), STGT’s parent company, dropped ฿1.00/share or 2.99% to ฿32.50/share with a trading value of 245 million baht.