Sri Trang Agro-Industry Public Company Limited

The Ministry of Commerce reported that Thailand's export value in July 2026 stood at 34.8 billion US dollars, expanding 21.6% year-on-year, higher than the market's expectation of 17.8%. Meanwhile, imports for the same month were 38.4 billion US dollars, up 37.8%, lower than expected, resulting in a trade deficit of 3.61 billion US dollars, less than forecast. Products with good growth include rubber, processed chicken, pet food, processed canned seafood, and electronic goods. Stocks in these sectors, such as STA, GFPT, ITC, TU, DELTA, HANA, and KCE, benefit accordingly. In the first seven months of the year, exports totaled 232 billion US dollars, up 18.2%, while imports were 267 billion US dollars, up 37.8%, with a trade deficit of 35.4 billion US dollars. The Ministry of Commerce sees support from global demand for technology products and digital infrastructure, as well as accelerated imports to prepare for US trade policies. Meanwhile, brokers like Krungsri Securities and Phillip Securities view positively on export-related stocks and recommend top picks such as DELTA, HANA, KCE, AMATA, GULF, GPSC, KBANK, and KTB.

Krungsri Securities has upgraded its recommendation for STA to "Buy" and raised its 2027 target price to 24.00 baht from 22.00 baht, reflecting upward revisions to normal profit estimates for 2026-2027 by 16% and 12%, to 2,940 million baht and 3,233 million baht, respectively. This is supported by higher-than-expected rubber prices and good cost control. Although the company has lowered its 2026 sales volume target to 1.45-1.50 million tons and expects a capacity utilization rate of 55%, the research house sees downside risks from first-half sales volume of only 0.70 million tons, representing 48% of the target. Meanwhile, the trend for Q3 2026 is expected to slow due to weak demand. However, the enforcement of the EUDR regulation in 2027 is seen as an upside not yet included in estimates, with the company aiming to sell about 30,000 tons of EUDR rubber per month, accounting for roughly 25% of the total projected sales volume.

Trinity Securities has raised its target price for Sri Trang Agro-Industry (STA) shares to 24.60 baht from 23.00 baht, while maintaining a speculative buy recommendation. The firm expects the company to return to profitability in 2026, driven by higher natural rubber prices. The research department forecasts 2026 profit to increase to 2.6 billion baht from 1.9 billion baht, after raising gross margin assumptions on higher average selling prices. Sales volume for 2026 is projected at 1.45-1.50 million tonnes, down from 1.6 million tonnes, due to reduced supply from heavy rainfall, particularly in Thailand where output may decline by 5% and Indonesia by up to 25%. Meanwhile, natural rubber prices remain 20% cheaper than synthetic rubber, attracting glove and tire manufacturers to use more natural rubber, despite overall tire demand growing only 1-3%. The company also announced an interim dividend of 0.50 baht per share, with the XD date on August 27, 2026, representing a dividend yield of 2.8%.

Farm income in July accelerated 10% from a year earlier, marking a fifth straight month of growth and the strongest pace in 20 months, helped by a 12% rise in agricultural prices while output fell 2%. An analysis from Yuanta Securities said products with improving prices included cassava, palm oil and chicken eggs, while hog prices declined. Durian and hog output increased, while cassava, rambutan, mangosteen, oil palm and chicken egg production decreased. Farm income is expected to keep accelerating from the third quarter through the fourth quarter of 2026, supported by continued growth in key product revenue, output affected by drought and lower global supply, a low base last year, and a recovery cycle that typically lasts about 12 months. This cycle has already risen for five months, so there is a chance of at least another five to six months of gains. The agricultural economy accounts for 10% of GDP and involves about 30% of the population, so it is expected to significantly support consumption in the second half of 2026. It should also improve asset quality for financial institutions and ease household debt pressure, which is positive for finance stocks, while stimulating investment in machinery, tractors, water pumps, fertilizer, seeds, solar energy and farmland improvement. Recommended stocks include GFPT, TFG, STA, GLOBAL, DOHOME, MTC, SAWAD, FSMART, DRT, DCC and SAT. The analysis also suggests monitoring APURE, or Agripure Holdings Public Company Limited, whose second-quarter 2025 results recovered with net profit of 56 million baht, accelerating from 12 million baht in the first quarter of 2026 and swinging from a loss of 34 million baht in the second quarter of 2025. This was driven by export sales to Europe surging eight to ten times after Europe restricted Chinese goods seen as dumped, sending large order volumes to APURE. The company has already planned for drought-related costs, and customers bear all shipping costs, so third-quarter 2026 profit is expected to accelerate both quarter-on-quarter and year-on-year, with the best chance in ten quarters. Fourth-quarter profit is expected to be stable quarter-on-quarter and grow strongly year-on-year. If this materializes, full-year profit would be around 250 million baht, up from only 27 million baht last year, implying earnings per share of 0.26 baht. The current share price trades at a price-to-earnings ratio of only 8 times, with an expected dividend yield of 8 to 9 percent per year. Technically, the price has just moved back above the 200-day moving average with positive signals, with resistance at 2.60 baht and 2.80 baht.

STA shares climbed 3.23% to 19.20 baht after analysts forecast third-quarter 2026 profit to remain strong and set a target price of 22 baht per share. Finansia Syrus Securities said STA reported second-quarter 2026 net profit of 895 million baht, up 38.7% from the previous quarter and 197% from a year earlier, with core profit at 1.15 billion baht, the highest in 17 quarters and above the research team's estimate of 763 million baht. Overall gross margin came in at 12%, above the 10.3% forecast, as the rubber glove business saw its margin rise to 17% from 10.4% on higher selling prices, while the natural rubber business posted a margin of 9.3%, up from 8.7% in the previous quarter. Finansia Syrus expects second-half 2026 profit may soften from the second quarter of 2026 due to lower rubber glove selling prices and weaker SICOM rubber prices at around 210 to 220 US cents per kilogram, but still expects third-quarter 2026 profit to remain at a good level, with a chance for SICOM rubber prices to rebound above 230 US cents per kilogram in the fourth quarter of 2026 if hot weather from the El Niño phenomenon materialises and the EUDR regulation is not postponed. STA also announced a dividend for the first six months of 2026 at 0.50 baht per share, representing a yield of 2.7%.

Sri Trang Agro-Industry Public Company Limited, or STA, reported second-quarter 2026 net profit of 895 million baht, up 38.7 percent from the previous quarter and the highest level in four years. Revenue came in at 31.0038 billion baht, growing 15.5 percent from the previous quarter. As a result, first-half 2026 net profit reached 1.5404 billion baht, swinging from a loss in the same period last year, supported by high natural rubber prices and a pickup in customer restocking. The average TSR20 block rubber price on the SICOM market in the second quarter was 217.8 US cents per kilogram, up 13.7 percent from the previous quarter and 29.7 percent from a year earlier. The board of directors approved an interim dividend of 0.50 baht per share, with the stock set to trade excluding dividend on 27 August 2026 and payment scheduled for 11 September 2026.

Globlex Securities, or GBS, estimates that the Thai stock index in August is likely to move in a range of 1,600 to 1,650 points, supported by a more relaxed investment climate for risk assets. This follows President Donald Trump's cancellation of plans to attack Iran and the achievement of a temporary ceasefire agreement, which caused WTI crude oil prices to ease below 80 US dollars per barrel, after having surged past 88 US dollars per barrel. In addition, the OPEC+ group is likely to increase production capacity by another 188,000 barrels per day in September. Meanwhile, investors have reduced the probability of a US Federal Reserve interest rate hike in September to 65 percent from 82 percent, and the European Central Bank kept its policy rate at 2.25 percent. On the domestic front, foreign capital inflows have clearly returned, with net purchases in July reaching as high as 45 billion to 48.7 billion baht, up from 6.86 billion baht in the previous month, bringing cumulative net purchases since the beginning of the year to 73 billion to 74.3 billion baht. This is coupled with June exports expanding 20.8 percent, valued at 34.66 billion US dollars, and headline inflation slowing to 2.42 percent. GBS recommends an investment strategy focusing on stocks with strong fundamentals and outstanding second-quarter 2026 earnings growth prospects, namely CBG, STA, BBGI, PR9, and TNP.

Analysts at Finansia Syrus Securities assess that the SET Index in August 2026 has a chance to rise and test key resistance at 1,680 to 1,700 points, maintaining a positive view as long as the index holds above 1,580 to 1,600 points. They have also raised the index target to 1,710 points by mid-2027, based on an estimated average earnings per share of 100.5 baht and a target price-to-earnings ratio of 17 times. Second-quarter 2026 net profits of Thai listed companies are expected to decline 7% from the previous quarter and 10% from the same period last year, pressured by banking, energy, transport, and property sectors, while electronics, petrochemicals, packaging, and telecoms show better trends. Analysts also believe foreign fund inflows into the Thai stock market will continue, as foreign ownership excluding DELTA remains below past peaks. For the August strategy, they recommend selective investment in stocks with standout second-quarter 2026 results and bright second-half outlooks, highlighting picks such as BTG, ITC, MAGURO, SJWD, and STA.

Thailand's exports in June 2026 expanded 20.8 percent from a year earlier, exceeding market expectations of around 15 percent, with a value of 34.6 billion dollars. Meanwhile, imports rose 50.3 percent to 41.1 billion dollars, resulting in a trade deficit of approximately 6.53 to 6.57 billion dollars. Key export growth drivers included pet food, which expanded for the tenth consecutive month, rising 22 percent, supporting ITC and AAI. Processed chicken grew for the seventh straight month, up 8.2 percent, boosting GFPT. Computers and components expanded for the 27th consecutive month, rising 57.4 percent, while phones, equipment, and components grew for the 13th straight month, surging 186 percent, benefiting electronic component stocks such as DELTA, HANA, and CCET. Rubber returned to growth for the first time in 14 months, supporting STA. On the risk side, new US tariff measures under Section 301 could affect some export stocks in the second half of the year.

The European Union has classified Thailand as a low-risk country under the EU Deforestation Regulation, or EUDR. This means rubber importers from Thailand are eligible for Simplified Due Diligence and face random inspections at a rate of just one percent, which is lower than Indonesia and Malaysia. The move enhances the competitiveness of Thai rubber and rubber product exports while elevating the sustainability image of Thai goods. However, Thailand still needs to accelerate the development of traceability systems and smallholder farmer data to comply with the new rules. Kasikorn Securities noted this is positive for the rubber sector and exporters such as Sri Trang Agro-Industry, North East Rubber, and Thai Rubber Latex Group, as they stand to maintain their European market share and improve competitiveness under the new EUDR.

Finansia Syrus Securities has raised its target for the SET Index to 1,710 points by mid-2027, based on an estimated average earnings per share of 100.5 baht and a target PER of 17 times. The research team lifted its 2026 earnings per share estimate by 3 percent to 99 baht, and its 2027 estimate to 102 baht, reflecting growth of 13 percent and 4 percent from the prior year, respectively. It also sees the Thai economy recovering steadily and foreign capital flows having a chance to return to the Thai stock market, as foreign investors' holdings of Thai equities remain below past peaks. Recommended top picks include BA, BBL, BDMS, CPALL, CPF, CPN, ERW, GULF, SAPPE, STA, and TIDLOR.

The Trade Policy and Strategy Office of the Ministry of Commerce reported that Thai exports in June 2026 reached 34.66 billion dollars, up 20.8 percent from the same month last year, extending growth for a 24th consecutive month and exceeding market expectations of 13.7 to 15.2 percent. Meanwhile, imports totaled 41.19 billion dollars, rising 50.3 percent, resulting in a June trade deficit of 6.53 billion dollars. For the first half of the year, exports amounted to 196.74 billion dollars, up 17.6 percent, and imports reached 228.49 billion dollars, up 38.0 percent, leading to a cumulative trade deficit of 31.74 billion dollars. Analysts at Yuanta Securities noted that the stronger-than-expected exports and the deficit are factors weighing on the currency, and highlighted five stock groups poised to benefit: rubber, which returned to growth of 12.5 percent after 14 months, supporting STA, NER, and TEGH; processed chicken, supporting GFPT, TFG, and CPF; pet food, which continued to grow 22.3 percent for a tenth straight month, supporting ITC and AAI; canned seafood, which resumed expansion at 17.5 percent, supporting TU; and electronic components, which accelerated growth, supporting SMT, CCET, KCE, and HANA.

ASL Securities holds a positive view on STA's earnings outlook, expecting second-quarter 2026 profit to recover strongly both year-on-year and quarter-on-quarter, driven by higher sales volumes and average selling prices. The second-half 2026 trend continues to show positive momentum, with the natural rubber business benefiting from forward sales contracts at elevated prices, while the rubber glove business is supported by rising demand for natural rubber gloves. This follows the Middle East conflict, which has raised synthetic rubber glove costs and tightened supply. Macro factors also support medium- to long-term growth in the rubber business, given tight natural rubber supply as farmers switch to higher-yielding oil palm cultivation, along with weather impacts reducing output. Meanwhile, demand continues to grow with the expansion of the electric vehicle industry and restocking by tire manufacturers, particularly customers in China, keeping rubber price trends at levels conducive to STA's profitability. STA also enjoys competitive advantages from its ESG leadership and readiness for the European Union's EUDR regulations through its continuously developed traceability system, enhancing opportunities to sell premium products and maintain market share. Valuation is attractive, with the stock trading at only about 0.6 to 0.7 times price-to-book value, below historical averages, and an expected dividend yield of around 6 to 7 percent. There is also hidden value from the T-VER carbon credit project, which has already been certified for over 14,000 tonnes of carbon and is expected to increase to around 300,000 tonnes by the end of 2026. ASL therefore views STA as a stock offering profit recovery potential, undemanding valuation, and attractive dividend returns. In terms of sentiment, STA may serve as a natural hedge for investment portfolios amid prolonged Middle East tensions, as rising oil prices tend to support natural rubber prices through higher synthetic rubber production costs, positively impacting STA's revenue and margins. This aligns with the SGX SICOM TSR20 futures price, which has risen 4.7 percent over the past three months, reflecting an upward rubber price trend. On the technical front, the price has pulled back in the short term to test support at the 13-day SMA around 18.40 to 18.30 baht, before seeing a technical rebound with a long white candlestick firmly closing above 19.00 baht. This buy signal suggests a test of resistance at the previous candlestick high or double top at 19.30 to 19.40 baht, and psychological resistance at 20.00 and 20.50 baht. ASL Securities recommends "buy" for existing shareholders to hold or accumulate, with potential to test resistance at 19.40, 20.00, and 20.50 baht. For those without positions, short-term buying is advised, focusing on holding above support at 19.00 baht and 18.40 to 18.30 baht, which should not be breached.