STA Jumps 6%, Analyst Gives “BUY” at ฿32 in Anticipation of a New High Profit in 10 Years

The share price of Sri Trang Agro-Industry Public Company Limited (STA) gained ฿1.50/share or 5.71% to ฿27.75/share in the morning session on Dec 11, with a trading value of 517 million baht.

 

STA expected its 2020 revenue to make a new high in 10 years with a net profit of 7,194 million baht and a sales revenue of 72,573 million baht, representing a 20% growth in response to an increase in rubber prices and the recognition of revenue from STGT. The analyst recommended “BUY” at a target price of ฿32.00/share. 

 

Phillip securities (Thailand) forecasts Sri Trang Agro-Industry Public Company Limited (STA)’s 2020 revenue to hit a new high in 10 years, mainly due to a strong distribution from its subsidiary Sri Trang Gloves (Thailand) Public Company Limited (STGT) that world enhance STA’s net profit to 7,194 million baht, a rebound from loss of 149 million baht in 2019. Also targeting sales revenue to increase by 20% YoY to 72,573 million.  

 

Analyst from Phillip securities revises its STA’s 2020 profit projection because 1) the rubber price tends to increase, thus expecting 4Q20 profit to grow 20% QoQ and 2) a better-than-expected performance of STGT.

 

For the year 2021, Phillip believes a robust revenue from STGT would continue to support STA’s growth, and reiterated a “BUY” recommendation with a target price at ฿32.00/share. STA’s current share price is trading at 4x P/E, and offers dividend yield of 8%.