Globlex Securities anticipates a near-term recovery in global rubber prices, following a 4% drop to USD1.72/kg since late February. This comes as traders weigh ongoing supply disruptions due to heavy rainfall and flooding across key ASEAN rubber-producing countries, against subdued demand prospects. The Association of Natural Rubber Producing Countries (ANRPC) expects global rubber production to edge up 1.3% to 14.9 million tons in 2025, while demand rises 0.8% to 15.6 million tons, suggesting a tighter supply-demand balance ahead.
North East Rubber Public Company Limited (SET: NER) is preparing for robust growth, targeting a 30% capacity expansion to 0.82 million tons per annum by early 2027 — up from 0.51 million tons currently — with significant additions slated for late 2026 and early 2027. Given current low prices, analysts believe NER will reduce hedging volumes to benefit from potential price recovery, leveraging Thailand’s leadership in rubber production.
Globlex noted that NER’s 3Q25 results remain soft, with net profit at THB327 million, marking a 41% decline quarter-on-quarter and 10% year-on-year. Revenue slipped to THB6.7 billion, down 11% quarter-on-quarter but up 9% from last year. Domestic revenue grew by 15% year-on-year, while exports fell 6%. Net profit margin pressures persisted, as gross profit margins dipped from 10.5% in the previous quarter to 8.9%.
Globlex Securities has trimmed its 2025-26 earnings per share (EPS) estimates for NER by 4.3% to 17.3%, citing production concerns from recent Southern Thailand floods. However, the 2027 EPS forecast was raised by 2%, reflecting expected normalization in rubber supply and growth from expanded capacity.
Maintaining a ‘BUY’ rating, Globlex slightly reduced its target price from THB6.4 to THB6.3, pegged to 6x 2026E P/E. The timely capacity additions by NER position the company to capitalize on rebounding rubber prices, which could drive share price appreciation toward the target by late 2026.
