Krungsri Securities (KSS) has reiterated a ‘Buy’ rating on North East Rubber Public Company Limited (SET: NER), maintaining a target price at THB 6.10 per share.
The analyst noted that NER’s management has confirmed the 2025 sales target at 470,000 tons, with expectations to recognize insurance claims totaling THB 180-200 million in the fourth quarter of 2025.
For 2026, sales volume is forecast to rise 6% to around 500,000 tons, supported by new customers in India and increased production designated for the Rubber Authority of Thailand (ROAT), estimated at 15,000 tons per month.
NER’s medium-term growth outlook is boosted by the new factory, which will have a production capacity of 300,000 tons and is expected to begin initial operations in 4Q26, slightly delayed from the original plan. Initial production will target 100,000 tons with a gradual ramp-up to accommodate increasing demand.
KSS stated that the analyst meeting highlighted several positives: expanding orders from India diversify NER’s customer base beyond China, while stable rubber prices—facilitated by government supply measures—should help margins.
Furthermore, profit growth in the fourth quarter of 2025 is anticipated both year-on-year and quarter-on-quarter, driven by a sales recovery and insurance claim recognition.
Valuation remains favorable, with NER trading at a forward P/E of 4.3x, or one standard deviation below the average, and a high annual dividend yield of 8-9%. The share price, analyst note, does not yet reflect the company’s improving earnings momentum, particularly as industry peers move toward losses.
Following these, normalized profit estimates are maintained at THB 2,024 million for 2025 and THB 2,122 million for 2026, implying growth of 21% and 4% respectively. KSS maintains a ‘Buy’ call on NER, citing strong momentum from new orders, stable margins, robust earnings, and a solid dividend outlook.
