STGT: Short Downside from Fire Incident, Analyst Affirms Positive Outlook in 2021 at Bt65

Asia Plus Securities see short-term downside risks to STGT from fire incident, but maintain positive outlook in 2021 with FV at Bt65

According to the local news report, a fire outbreak has occurred at one of Sri Trang Gloves (Thailand) Public Company Limited (STGT)’s production plant on Sunday morning, which the firefighters brought the fire under control after 30 minutes with no casualties or injuries reported.

 

The site that caught fire is an additional plant that is under construction. The new plant is expected to have a total production capacity of 2.2 billion pieces per annum, which is equivalent to 6% of STGT’s total production capacity.

STGT stated that the impact from the fire is limited, but the commercial of date (COD) for this new plant will be delayed by another 1-2 months. The expected COD will be in April 2021, while asserting that the company has insurance to cover all of its assets.

Asia Plus Securities (ASPS) expected the incident to post a short-term negative sentiment to STGT and STA as a parent company. However, ASPS maintained a positive outlook in overall aspects, expecting STGT and STA to report strong growth in 2021, while recommending “BUY” for mid and long term investment, giving a fair value for STGT at Bt65 and STA at Bt50.

 

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