Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

Northeast Rubber Public Company Limited / Equity Bottom-Up

<ul><li>A possible global recession that would weigh on rubber prices and the GPM are the key reasons for our downward revision to NER’s 2023-25E earnings, which should show a contraction in 2023E before resuming their momentum in 2024-25E, driven by production capacity expansion.</li><li>The high-norm beta for NER reflects the cyclical nature of rubber prices and the business’s high sensitivity to the impact of the economic growth of Thailand’s key trading partners, as well as the pace of growth of related downstream industries, i.e., the tire industry and automotive/EV industries.</li><li>Hence, NER’s share price has underperformed on the SET downtrend.</li></ul>

A possible global recession that would weigh on rubber prices and the GPM are the key reasons for our downward revision to NER’s 2023-25E earnings, which should show a contraction in 2023E before resuming their momentum in 2024-25E, driven by production capacity expansion.The high-norm beta for NER reflects the cyclical nature of rubber prices and the business’s high sensitivity to the impact of the economic growth of Thailand’s key trading partners, as well as the pace of growth of related downstream industries, i.e., the tire industry and automotive/EV industries.Hence, NER’s share price has underperformed on the SET downtrend.

North East Rubber - Challenges Behind Downward Earnings Revision

<div><div><div><ul><li>We maintainan Outperformrating. Our valuation matrix suggests upside to our current FV of Bt7.62/share, based on a required rate of return at 13.6%.</li><li>Meanwhile, the 24M FV remains on an uptrend (at Bt8.30) given the strong demand for rubber, driven by growth in the related downstream industries, i.e., tire, auto and EV. As for the tactical risks, our valuation matrix points to neutrality.</li><li>NER’s earnings yields look attractive at around 16.9% in 2023E and 19.9% in 2024E. </li></ul></div></div></div>

We maintainan Outperformrating. Our valuation matrix suggests upside to our current FV of Bt7.62/share, based on a required rate of return at 13.6%.Meanwhile, the 24M FV remains on an uptrend (at Bt8.30) given the strong demand for rubber, driven by growth in the related downstream industries, i.e., tire, auto and EV. As for the tactical risks, our valuation matrix points to neutrality.NER’s earnings yields look attractive at around 16.9% in 2023E and 19.9% in 2024E. 

North East Rubber - China’s Reopening to Boost Rubber Sales Growth

Thailand

Northeast Rubber Public Company Limited manufactures rubber products. The Company focuses on producing ribbed smoked sheets, soles, hoses, and rubber components. Northeast Rubber markets its products worldwide.

Northeast Rubber Public Company Limited (NER TB)

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