Finansia Syrus Securities (FSS) wrote that Sri Trang Agro-Industry Public Company Limited (SET: STA) reported a net profit of THB 495 million for 3Q26, representing a significant decline of 44.7% quarter-on-quarter but a turnaround from the net loss in 3Q25.
Excluding flood insurance compensation, FX loss, derivative loss, machinery disposal loss, and asset impairment, normalized profit stood at THB 679 million, down 41% QoQ and 24% below analyst expectations.
The primary reason for the lower-than-expected and declining quarterly profit stemmed from both the natural rubber and rubber glove segments. While sales prices rose for both glove products (+3.6% QoQ, +24.6% YoY) and natural rubber (+10.9% QoQ, +30.6% YoY), these increases were insufficient to offset declining sales volumes and higher raw material costs.
Glove sales volume fell 5.7% QoQ and 19.8% YoY, while natural rubber dropped 15% QoQ but rose 15.9% YoY, as customers accelerated purchases in 2Q26 and then held off amid considerable rainfall reducing market supply.
In 3Q26, sales volume compliant with EUDR requirements reached 47,300 tons (+175% QoQ), accounting for 15.7% of total rubber sales. The consolidated gross margin slipped to 9.5% from 12.0% in 2Q26, mainly due to a notable drop in glove segment margins from 17.0% to 12.2%. The margin for natural rubber also fell slightly to 9.1% from 9.5%.
For the first nine months of 2026, STA’s normalized profit totaled THB 2.25 billion, representing 69.6% of the full-year estimate.
Looking ahead, 4Q26 profit is expected to recover QoQ, supported by continuous increases in rubber selling prices. Sales volume could remain flat or improve, as customers typically advance orders before Indonesia and Thailand’s rubber tapping breaks. However, ongoing caution remains due to raw material supply risks from potential El Niño effects that could disrupt production and sales.
As a result, Finansia recommends a ‘Speculative Trading’ rating for STA, suggesting investors monitor the stock in line with rubber price trends.
