STA and STGT plunged into a negative territory in early Friday trading as earnings in 4Q21 fell short of market expectations.
The share price of Sri Trang Agro-Industry Public Company Limited (SET: STA) dropped THB2.00/share or 6.25% to THB30.00/share, with a trading value of THB426 million.
The share price of Sri Trang Gloves (Thailand) Public Company Limited (SET: STGT) dropped THB1.25/share or 4.20% to THB28.50/share, with a trading value of THB615 million.
Trinity Securities said that both STA and STGT’s operating performance fell short of market expectations due to the fall in rubber glove prices, but still maintained a “BUY” rating on two stocks.
STA reported earnings in 4Q21 of THB1,600 million (-70.7% YoY, -50.0% QoQ), but a net profit for the fiscal year 2021 was THB15,846 million, an increase of 66.26% from a net profit of THB9,531 million in 2020. This was owing to reduced profit margins in 3Q21 as a result of the rubber gloves segment’s lower average selling price. However, the gross margin for the whole year of 2021 was 32.2%, up from 28.9% in 2020. Target Price: THB42.60 per share.
Meanwhile, STGT’s 4Q21 dropped to THB1,800 million (-78% YoY, -59% QoQ) amid falling rubber gloves prices. Sales volume surged to 7,600 million pieces. There was a container shortage in the third quarter of 2021, resulting in late deliveries, while the average selling price decreased to USD34/1,000 pieces (-43% YoY, -26% QoQ) due to higher market supply. Trinity projected that the average selling price for 1,000 pieces would stabilize at roughly USD30-35. Target Price: THB37.00 per share.
