Northeast Rubber Public Company Limited (SET: NER) has reported a robust performance for 2024, with total revenue reaching THB 27,496.16 million, marking a 9.69% increase compared to the same period the previous year, which recorded revenue of THB 25,065.71 million.
This surge in revenue was primarily driven by the rising prices of rubber, resulting in a net profit of THB 1,652.47 million, up 6.91% from a net profit of THB 1,545.60 million in the previous year.
With a Price to Earnings (P/E) ratio of 5.52, the stock remains attractively priced. Additionally, the Price to Book Value (P/BV) is at 1.08x, and the company offers a high dividend yield of 7.29%, indicating strong and sustainable long-term dividend payments.
An analysis of historical performance from 2020 to 2024 reveals consistent net profit growth for NER. In 2020, the company reported a net profit of THB 858.68 million, rising to THB 1,850.19 million in 2021, THB 1,748.00 million in 2022, THB 1,645.60 million in 2023, and culminating in THB 1,652.47 million in 2024.
ASL Securities projects a positive growth trajectory for NER in 2025, setting a sales target of 500,000 tons, a 13.8% increase from the previous year.
Rubber prices are expected to remain stable at high levels due to increased rainfall in the country and reduced rubber tree in Indonesia. Although rubber exports from Côte d’Ivoire may offset some of this, it is unlikely to completely compensate for the shortfall.
Furthermore, NER plans to construct a third manufacturing facility with a production capacity of 320,000 tons, expected to commence mid-year. The first phase is slated for production by the middle of next year with a capacity of 160,000 tons, requiring an investment of approximately THB 2 billion, funded partially through retained earnings and loans.
Revenue forecasts for 2025 anticipate total revenue of THB 31,700 million, reflecting a 15.60% growth due to the sale of 500,000 tons and an average selling price of THB 63.40 per kilogram, which is higher than the previous year’s 62.50 Baht/kg. Net profits for 2025 are expected to reach THB 1,920 million, representing an 11.8% increase year-over-year.
Consequently, the securities company maintains a “Buy” recommendation for NER with a target price of THB 6.00.
