STA-NER Continue to Rally in Response to a Higher Rubber Prices

Rubber-related stocks edged higher in response to higher rubber prices. The analyst recommended “BUY” STA at a target price of 41.00/share, expecting 4,600 million baht of net profit this year. Meanwhile, the analyst also recommended “BUY” NER at a target price of 5.00/share, expecting 853 million baht of net profit this year.

 

As of 12:10 local time in Thailand, the share price of Sri Trang Agro-Industry Public Company Limited (STA) rose ฿1.50/share or 4.41% to ฿35.50/share with a trading value of 1,326 million baht.

 

The share price of North East Rubber Public Company Limited (NER) rose ฿0.02/share or 0.40% to ฿5.00/share with a trading value of 622 million baht.

 

KTB (Thailand) Securities (KTBST) is positive toward rubber entrepreneurs as the rubber prices are on the rise and continues the upward momentum driven by heavy rain and flood across Southern China and Vietnam, along with a surge in latex gloves demand following the resurgence of Covid-19 outbreak.

 

As of now, the price of rubber is 175.8 cent per kg., an increase of 20% since the beginning of this quarter. The Rubber Authority of Thailand stated that the rubber price remains in the positive territory and has broken through the resistance in almost 4 years, expecting ribbed smoked sheets (RSS) could soon reach to 80 baht per kg. and could reach as high as 100 baht per kg.

 

KTBST estimated STA’s FY2020 profit of 4,600 million baht, a rebound from loss of 149 million baht a year ago, while maintaining its forecast on FY2021 of 4,800 million baht. KTBST has given a “BUY” recommendation at a target price of ฿41.00/share.

 

Meanwhile estimating NER’s FY2020 of 853 million baht, increasing 58% form a year ago and FY2021 of 1,080 million baht, an increase of 15%. Giving a “BUY” recommendation at a target price of ฿5.00/share.