Finansia Syrus Securities (FSS) noted a significant recovery in the price of SICOM rubber, which recently surged to 257 cents per kilogram, marking a 7% increase from its low earlier in the week and reaching its highest level since 2013. This upward movement is expected to have a positive impact on both the share price and operating performance of Sri Trang Agro-Industry Public Company Limited (SET: STA).
FSS anticipates that, while 2H26 profits may soften compared to the second quarter, strong year-on-year growth is still expected due to higher selling prices compared to the previous year and limited impact from flooding.
In the medium term, STA is projected to benefit from the effects of El Niño, provided there is no delay in EUDR regulations. The brokerage recommends a ‘Speculative Buy’ with a target price of THB 23.00 per share.
Similarly, Land and Houses Securities (LHS) expects STA’s normalized profit in 3Q26 to increase year-on-year, despite a quarter-on-quarter decrease from a high base in Q2. The rise in SICOM TSR20 rubber prices during the third quarter, alongside a higher proportion of EUDR-compliant rubber—which commands a premium—are highlighted as key factors.
Sales volumes of EUDR-compliant rubber are expected to rise to approximately 30,000 tons in 3Q26 from 17,214 tons in 2Q26, with further growth to over 60,000 tons anticipated in 4Q26. These factors are expected to support both the average selling price and gross profit margin.
Additionally, global rubber supply remains relatively tight due to limited production in Indonesia and Ivory Coast, further supporting rubber prices and Thai exports. LHS maintains a ‘Buy’ recommendation on STA, with a strategic target price of THB 23.90 per share, equivalent to a FY26 price-to-earnings ratio of 11.3x.
