FSS International Investment Advisory (FSSIA) expressed a negative view on Thailand’s STA and STGT due to a more cautious stance by its customers amid uncertainty in trade tariffs with the U.S.
FSSIA stated that Sri Trang Agro-Industry Public Company Limited (SET: STA) may see its sales volume in 2025 decline both quarter-on-quarter (q-q) and year-on-year (y-y) as customers slow down orders to assess the impact of newly implemented tariffs. Selling prices in 2Q25 are expected to remain flat q-q, but the global Sicom rubber price has dropped significantly following the Trump administration’s tariff announcement in early April. Recently, Sicom prices have fallen to 165-175 cents/kg, which is likely to put downward pressure on STA’s selling prices starting from 3Q25.
Consequently, the company has been forced to revise down its 2025 profit forecast by 8%, now anticipating a 7% y-y profit growth. The target price has been adjusted to THB 17, with the investment recommendation downgraded from “Buy” to “Hold,” pending clearer signs of recovery in purchase orders.
For Sri Trang Gloves (Thailand) Public Company Limited (SET: STGT), near-term glove sales volume is expected to soften q-q, though still demonstrating y-y growth. Both US and non-US customers have adopted a wait-and-see stance amid uncertainty regarding tariff issues. The company may lower its selling price to maintain its utilization rate, but the price reduction is likely to outpace any decline in production costs. As a result, both revenue and gross margin are projected to weaken in 2Q25.
Looking ahead to 2H25, ongoing tariff developments remain a key risk factor to monitor. Nevertheless, the company maintains its 2025 glove sales volume target at 42 billion pieces, with sales in the first half of 2025 expected to account for approximately 43% of the full-year target.
