Stocks in the news (aot, dohome, sta) 13.05.24
AOT: Philippines LCC, Cebu Pacific, will boost flights to BKK with a 3-weekly service from Manila to BKK (DMK) staring July.
Comment: Does this indicate a demand for additional service sector employees?
DOHOME: sees strong qtd 2Q from recovery demand for home improvement products, sets Bt1b capex to add 8 stores & revamp existing outlets.
STA: anticipates positive earnings momentum carry thru 2H supported by recovery rubber demand from countries ex-China, higher avg selling price yoy and delivery of rubber under EUDR standard to EU clients.
Paul A. Renaud
Looks to me STA (19.80) has bottomed. Positive earnings momentum to likely for rest of this year. Supported by the recovery rubber demand and prices from countries ex-China, higher avg selling price yoy and delivery of rubber under new EUDR standard to EU clients. STA, which traded as high as 50 Baht during the Covit-19 health crisis (2021) is a turnaround-idea, which in the past paid very high dividends that expected to resume. STA continued to pay dividends -even while earnings dropped off on cyclical factors. STA finances remain solid with the debt-to-equity ratio at 0.7% at the end of Q1/2024. STA is the worlds largest NR producer. Asia contributed the largest portion of sales revenue at 38.5%, followed by Europe at 20.9% and North America at 18.2%. South America contributed 14.7% while the Middle East and Africa accounted for 3.5% and 3.4% of sales revenue, respectively. Australia and Oceania contributed 0.9% of sales revenue. (As of end of 1Q 2024).
More prudent investors may want to await their 2Q earnings, but I think the worst is over and so is a turnaround high yield idea with little exposure to Thai economy. You can take a look at TSR20 Rubber price the past 16 years. A long bottom has formed.
Pon
All hail Monsieur Renaud.