Finansia raises STA profit forecast and target price to 27 baht

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Finansia Syrus Securities has raised its normal profit forecast for Sri Trang Agro-Industry Public Company Limited, or STA, for fiscal years 2026-2027 by 14.5-26.4% to 3.23 billion baht and 2.83 billion baht, even though profit in 2027 is expected to decline from the previous year. The research team raised its 2027 rubber selling price forecast by 4.1% to 2,400 US dollars per tonne and increased sales volume by 4.3% to 1.38 million tonnes, which is still below management's target. Meanwhile, rubber prices rose to a 13-year high, with the average price of block rubber in the third quarter of 2026 up 3.8% quarter on quarter, while fresh latex fell 7.9%. For STA's third-quarter 2026 operating results, net profit is expected at around 850-900 million baht, a turnaround from a loss in the third quarter of 2025 and potentially flat from the second quarter of 2026, better than the earlier expectation of a quarter-on-quarter decline. Although STGT's profit is still expected to weaken in line with lower rubber glove selling prices, sales volume in the natural rubber business may beat expectations, as Indonesia entered its rubber closing season in September and delayed deliveries to customers more than usual, prompting customers to buy from STA instead. On investment strategy, the recommendation remains to buy STA shares, with the target price raised to 27 baht from 23 baht.

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