Northeast Rubber Public Company Limited (SET: NER) remains a stock surrounded by optimism, as major Thai brokerages keep their “Buy” recommendations following a solid 1Q25 performance, despite mounting concerns over US tariff policies and delayed expansion plans.
Krungsri Securities maintains a “Neutral” view on NER after its analyst meeting, even as the company sticks to its ambitious 2025 sales target of 500,000 tons—a 14% increase from last year. The delayed construction of its third plant in Thailand aligns with analyst expectations, given global economic uncertainties and the specter of US reciprocal tariffs.
Krungsri analysts praised NER for its cautious and prudent strategies, deemed apt for the current macro environment. For 2Q25, net profit is expected to grow year-on-year on higher sales volume and average selling prices, though a sequential dip is likely due to seasonal factors. The full-year net profit estimate remains at THB 1.974 billion (up 19% YoY).
The securities firm maintains its “Buy” recommendation with a target price of THB 5.85.
NER aims to maintain its 2025 sales target, buoyed by robust demand for tires used in Chinese electric vehicles and the replacement market, with orders from India also expected to rise. Meanwhile, global rubber supply is tightening due to lower output from Indonesia and Vietnam.
The company’s previously announced plant expansion (Plant 3) in Thailand is now pushed back by at least six months, citing uncertainty over the U.S. import tariff policy—even though block and sheet rubber currently receive tariff exemptions. There are concerns that downstream tire manufacturers may delay rubber purchases until the policy landscape becomes clearer.
Liberator Securities notes that NER outperformed both on a YoY and QoQ basis in 1Q25, with net profit beating expectations by 13.1% on higher-than-anticipated sales volume. Although Trump tariff risks may prompt forecast downgrades, the broker highlights NER’s high dividend yield and low P/E of 3.3x as attractive for short-term speculative plays.
NER reported a 1Q25 net profit of THB 609 million, up 34% YoY and 69% QoQ, even as total sales reached THB 8.698 billion (+33% YoY, -3% QoQ) from a sales volume of 127,090 tons (+11% YoY, -7% QoQ). The average selling price rose 20% YoY and 4% QoQ to THB 68.44/kg. The gross margin expanded to 10.6% from 8.8% in 4Q24, though it remains below the first quarter of last year at 11.6%.
SBI Thai Online Securities highlights a similar narrative, with 1Q25 net profit up 34.22% YoY at THB 608.84 million. Domestic sales accounted for 69.87% of the total (+24.81% YoY), while export revenue soared 56.71% YoY to THB 2.6 billion or 30.13% of the total. SG&A to sales fell to 2.01% as CSR activity costs declined. Gross margin in 1Q25 dipped to 10.61% (from 11.64% in 1Q24) due to higher input rubber costs.
SBI expects NER’s performance in Q2 and Q3 to remain resilient, as reciprocal tariffs have yet to hit hard—rubber tire exports from Chinese factories in Thailand to the US represent only around 4% of NER’s volume. However, the firm warns that US-Thai negotiations will be crucial for NER’s Q3–Q4 sales.
Trinity Securities, while acknowledging NER’s stellar Q1 result, has turned more cautious, lowering its recommendation to “Hold” with a target price of THB 4.50. Trinity flags that customers are delaying orders on tariff uncertainty, and that NER’s record share price of THB 5.05 has since retraced by -15% following the April US tariff news.
Yuanta Securities expects robust profit through 3Q25, albeit a slight dip in sales volume and gross profit margin in Q2. About 70% of scheduled orders were booked in the second quarter, which was before the new tariff announcements, limiting the immediate negative impact. A new Indian tire-maker client is set to begin purchases in Q4, with another major client expected to follow soon.
Pi Securities also sees a risk that some clients may defer orders until tariff clarity emerges, prompting NER to defer the new plant construction to early 2026. The firm lowered its full-year GPM assumption to 10.2% and its net profit forecast to THB 1.863 billion but keeps a “buy” suggestion, citing NER’s nearly 10% dividend yield and Thailand’s dominance in global rubber production.
ASL Securities stated that NER 1Q25 performance is better than estimated, as the brokerage firm previously expected THB 31.7 billion in revenue and net profit at THB 1.92 billion, holding their “Buy” recommendation with a year-end target price of THB 6.00. The firm observed that gross margin for Q1 was 10.6%, down from 11.6% YoY, noting a one-off FX loss.
