SRI TRANG GROUP Financial Analysis: Net Profit Growth in 3Q24
Business Description
SRI TRANG GROUP is a leading fully integrated green rubber company with operations spanning upstream, midstream, and downstream processes. It operates 36 NR processing plants across Thailand, Indonesia, Myanmar, and the Ivory Coast, and six glove factories in Thailand. The company has a strong global presence, with rubber products sold in over 51 countries.
Industry Position
SRI TRANG GROUP is positioned as a leader in the rubber industry. Its main competitors are other rubber processing companies, but it has a competitive edge due to its integrated operations and sustainability initiatives. The company appears to maintain a significant market share due to its extensive production capacity and global distribution network.
Revenue Streams and Customer Base
The company’s revenue is primarily derived from the sale of natural rubber (80% contribution in 3Q24) and gloves. It serves a diversified customer base across various regions, including China, Asia, America, and Europe, with significant sales to the Chinese market.
Financial Statement Analysis
Income Statement
The company reported a significant year-over-year revenue increase of 87.3% in 3Q24, reaching THB 31,618.5 million. Net profit for 3Q24 was THB 517.3 million, marking a turnaround from a loss in 3Q23. Gross profit also saw substantial improvement, with a 122.5% increase year-over-year.
Balance Sheet
The report does not provide specific balance sheet details, such as asset or liability breakdowns.
Cash Flow Statement
The report does not include detailed cash flow statements. However, the EBITDA for 9M24 was THB 4,946.5 million, an increase of 44.2% from 9M23, suggesting improved operational cash flow.
Key Findings
Strengths
- Significant revenue and net profit growth in 3Q24.
- Strong market presence with diverse geographic footprint.
- Leader in sustainable and traceable rubber sourcing.
Risks
- Dependence on volatile rubber prices, although the company has strategies to mitigate risks.
- Exposure to global economic conditions and trade barriers.
Report Date and Financial Year
The report is dated Nov 19, 2024, and covers the financial results up to 3Q24.
Special Activities
The company is investing THB 9,000 million in TSR capacity expansion and THB 950 million in LTX capacity expansion to improve profitability and market position.
Investment Recommendations
If holding: Consider maintaining the investment given the company’s strong revenue growth and strategic expansion efforts.
If not holding: Consider buying, as the company shows potential for future growth and has a competitive edge in sustainability.
Disclaimer
This analysis is based solely on the provided report and does not constitute financial advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.
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