KTBST Expects STGT’s 3Q Profit to Jump 2,150%, Recommending “BUY” at ฿116

KTBST Expects STGT’s 3Q Profit to Jump 2,150%, Recommending “BUY” at ฿116.00/Share.

KTB Securities (Thailand) (KTBST) has given a “BUY” recommendation on Sri Trang Gloves (Thailand) Public Company Limited (STGT) with a target price as high as ฿116.00/share, expecting 3Q20 net profit to soar 2,150%.

 

KTBST stated that it reiterated a BUY rating on STGT and a target price of Bt116.00, which is pegged to 2020E PER of 29x, or +1 SD above its regional peers 5-yr average level (the top four rubber glove manufacturers in Malaysia).

The security company remained positive toward STGTs earnings outlook. First, it estimated 3Q20E net profit to skyrocket +2,150% YoY, +123% QoQ to Bt2.36bn as 1) average selling price has increased +70% QoQ to Bt1.12 per piece, and 2) gross profit margin may widen to 35.0% from 29.2% in 2Q20 as KTBST’s forecast has been reinforced with the country’s exports of rubber gloves, which jumped +175% YoY in August. Last, KTBST forecasted demand for rubber gloves to remain high in the medium- to long term after the global COVID-19 infection again hit a record high in daily cases of 300k per day compared to 250k in July-August.

In this regard, KTBST maintained its 2020-21E net profit forecast at Bt5.75bn (+806%) and Bt6.13bn (+7%) but would upgrade its forecast once STGT reports its 3Q20E earnings results.

 

STGTs share price gained in two months and outperformed the SET Index by 18%. Despite this, the stock currently trades at 2020E PER of 19.1x, which is -1 SD below its regional peers average level. KTBST forecasted demand for rubber gloves to remain high until YE2021E given the company’s substantial orders backlog and rising COVID-19 cases on a daily basis.

 

คำค้น