On Wednesday at 12:03 PM (Bangkok time), the share price of Sri Trang Agro-Industry Public Company Limited (SET: STA) jumped by 5.38% or THB 1.00 to THB 19.60, with a trading value of THB 572.27 million.
Finansia Syrus Securities (FSS) wrote that STA achieved a net profit of THB 895 million in the second quarter of 2026, representing an increase of 38.7% from the previous quarter and 197% year-on-year. Excluding a THB 274 million loss from derivatives and a THB 19 million foreign exchange gain, normalized profit stood at THB 1.15 billion, up 174.7% quarter-on-quarter and 247.5% year-on-year.
This result marks the highest level in 17 quarters and surpassed the analyst estimate of THB 763 million. The performance was driven by a gross profit margin of 12%, higher than the estimated 10.3%. The natural rubber business posted a margin of 9.3%, rising from 8.7% in the first quarter, while the rubber glove segment saw its margin grow to 17% from 10.4%, supported by higher selling prices and increased natural rubber sales volume.
For the natural rubber business, the average selling price in 2Q26 rose by 12.4% from the previous quarter and 12.3% from a year earlier, in line with higher SICOM rubber prices. Sales volume reached 354,000 tons, a 3.6% increase from the previous quarter, though it declined by 10.9% year-on-year. This followed a recovery in customer orders during May and June.
In the rubber glove segment, the average selling price was $22.86 per 1,000 pieces, up 17.8% quarter-on-quarter and 13.8% year-on-year, the highest level in four years since the COVID-19 period. However, sales volume dropped 6.6% quarter-on-quarter and 5.9% year-on-year to 8,551 pieces, as customers slowed orders after prices increased significantly.
Operating expenses were well managed, with the SG&A-to-revenue ratio declining to 6.2%, compared with 6.6% in both 1Q26 and 2Q25. Interest expenses fell by 7% quarter-on-quarter and 21.8% year-on-year, reflecting lower interest rates and loan repayments.
Looking ahead, Finansia expects STA’s earnings in the second half of 2026 to soften, citing pressure from declining glove selling prices. The natural rubber business is anticipated to remain stable or slightly weaken, following a drop in SICOM rubber prices to approximately 210-220 cents per kilogram, down from 220-230 cents in the second quarter.
Nevertheless, with rubber prices still at elevated levels and stable production volumes, the brokerage believes third-quarter profits should remain strong. The trend of SICOM prices in the final quarter will be key, particularly if El Niño weather conditions lead to higher prices or if there are regulatory delays regarding EUDR rules.
Finansia is currently reviewing its full-year profit forecast for STA, as normalized profit in the first half of 2026 reached THB 1.57 billion, an increase of 625.3% year-on-year, already approaching previous full-year estimates.
STA announced an interim dividend payment of THB 0.50 per share for the first half of 2026, equivalent to a 2.7% dividend yield. Following these, Finansia has set a target price of THB 22.00 per share for the stock.
