Analysts See Bright Future for STGT from Robust Demand, Giving a TP as High as THB91!
Analysts See Bright Future for STGT from Robust Demand, Giving a TP as High as THB91!
Analysts See Bright Future for STGT from Robust Demand, Giving a TP as High as THB91!
9 ก.ค. 2563

As of the closing price in the morning session of July 9, 2020, the share price of Sri Trang Gloves (Thailand) Public Company Limited (STGT) was ฿76.00/share, increased ฿36.00/share or 105.8% from its IPO at ฿34.00/share within five trading days since its first debut.
 
KGI Securities has given STGT an “Outperform” rating with a target price as high as ฿91.00/share.
KGI estimated STGT’s core earnings to rise at a 2019-2022F CAGR of 72.7%, largely driven by robust global demand for rubber gloves, which should benefit from higher hygiene standards, more stringent health regulations, and viral outbreaks.
KGI derived its 2021F target price of Bt91.00, based on a target PER of 32.5x, +1.5 STD above the long-term historical average of its closest global competitor. KGI believed its target PER is justified given a 3-year estimated core earnings CAGR of 72.7%, which should be largely driven by a surge in demand for rubber gloves during the ongoing COVID-19 pandemic.
 
Kasikorn Securities (KS) raised its target price on STGT from ฿43.40/share to ฿85.00/share and revised up 2020-22E earnings to Bt4.8bn (+654% YoY), Bt6.9bn (+45% YoY) and Bt4.6bn (-34.4% YoY) to factor in a higher selling price.
KS expected STGT to maintain its ASP in 1Q21 at the same rate as Dec 2020 and then expect it to come down from 2Q21 onward by 5-10% QoQ as KS expected there would be less concern over COVID-19 in 1Q21.
STGT 2Q20 earnings are expected to jump by 400% YoY and 105% QoQ. KS estimated STGT to report a 2Q20 core profit of Bt865mn, up 400% YoY and 105% QoQ, with the key drivers of sales volume growth of 16.3% QoQ and ASP growth of 10.2% QoQ. KS thus forecasted revenue for the quarter of Bt4.9bn, or growth of 72.8% YoY and 30.9% QoQ.
 
Maybank Kim Eng also raised its target price from ฿56.00/share to ฿76.00/share, while expecting STGT’s quarterly earnings to set a new record high every quarter, from Q2, Q3, Q4, driven by average selling price remains in an upward trend throughout this year.
Maybank raised STGT’s 2020 earnings forecast by 18% to THB3.85b, growing 6 times YoY. With a stronger rubber glove industry structure in general, good sales prices, low costs and higher sales volume than the supply, Maybank shifted to use the average P/E of the group +0.5SD at 24x as a reference.