Yuanta Securities (Thailand) released an analysis on North East Rubber Public Company Limited (SET: NER), giving a “Buy” recommendation with a 12-month target price of THB 5.60.
The securities firm estimated that NER’s 1Q26 profit represents 17.6% of the full-year profit forecast. The company expects this quarter to be the lowest of the year, with profits set to recover sequentially, in line with the SICOM rubber price trend, particularly in the second half of this year.
For 2Q26, revenue is forecasted to increase in tandem with selling price hikes, but gross profit margin (GPM) is expected to stabilize due to rising average costs. Nevertheless, there is a potential for a modest quarter-on-quarter growth in gross profit, supported by higher selling prices.
When compared to the same period last year, profits are likely to decrease due to higher base in 2Q25. Normalized profit for 2Q26 is preliminarily expected at around THB 320 million.
The recent uptrend in SICOM rubber prices is anticipated to have a clear positive effect in 3 – 4Q26, likely driving quarter-on-quarter and year-on-year profit growth again in 3Q26. For 2026, the full-year profit forecast is maintained at THB 1,730 million (+5.8% YoY), with the stock currently trading at a 2026 price-to-earnings (PER) ratio of 5.1 times.
Nevertheless, 2Q26 earnings are expected to be unremarkable, and the interim dividend for 1H26 is expected at just THB 0.05 per share. Despite maintaining a “Buy” recommendation, from a strategic standpoint, it may be advisable to accumulate again after the 2Q26 financial results, Yuanta concluded.
Pi Securities also maintains a “Buy” rating for NER, but revises its target price down to THB 5.05 (6.2x 2026PER). The brokerage firm anticipates 2Q26 earnings recovering from 1Q26 due to improved selling prices in line with the global rubber price trend since early in the year.
However, a new risk has emerged from a potential El Niño event later this year, possibly preventing NER’s management from achieving its sales target of 500,000 tons, with an initial estimate lowered to just 450,000 tons. The full-year profit forecast has therefore been revised down to THB 1,555 million.
Krungsri Securities maintains a “Neutral” recommendation, but lowers its target price to THB 4.80. The firm takes a slightly negative view on the downward adjustment of the 2026 sales volume target to 450,000 tons due to concerns over the Super El Niño, which could tighten rubber supply in 2H26.
NER has also postponed construction of the third factory to preserve liquidity in light of higher raw material costs, limiting the sales volume upside for 1-2 years. This results in a 9% and 5% cut in normalized profit estimates for 2026-2027, to THB 1,667 million (+2% YoY) and THB 1,772 million (+6% YoY), respectively.
Some of the reduction is offset by raising the average selling price forecast to THB 68 per kilogram (previously THB 64 per kg), but the increasing selling, general & administrative expenses to sales (SG&A) ratio, in line with rising energy and transportation costs, is a concern.
For 2Q26, normalized profit is expected to decline YoY due to the higher base in 2Q25, however, QoQ performance is estimated to improve, supported by raw material costs in inventory that still reflect pre-rally purchase prices. Normalized profit in 2H26 is expected to improve from the first half, with the rubber supply situation under El Niño being a key factor to monitor.
