Shares of Sri Trang Gloves Thailand (STGT) began trading on Thursday at more than 75% above their initial public offer (IPO) price in the country’s first listing since the coronavirus pandemic escalated.
The company, the world’s third-largest rubber glove producer after Malaysian firms, Top Glove and Hartalega, plans to use 14.6 billion baht ($470.36 million) from the funds raised to expand production and repay debt, it said in a filing.
Its shares reached 60 baht after markets opened, up from the IPO price of 34 baht.
“STGT’s story and timing is unique because this company benefits from the pandemic directly, unlike Central Retail,” said M Corp Review analyst, Athaporn Arayasantiparb.
The listing is Thailand’s third this year after top retailer Central Retail Corporation Pcl and Yggdrazil Group Pcl. February’s IPO by Central Retail Corp was Thailand’s largest.
STGT booked revenue of 3.87 billion baht for the three months ending in March, versus 3 billion from the corresponding period last year, fuelled by rising global demand for latex gloves to fight the pandemic, as well as lower rubber prices.
Net profit in the first quarter rose 184% to 421.89 million baht. STGT has a dividend policy of at least 30% of net profits.
Risk factors included competition from other manufacturers and fluctuations in the price of raw materials, it said.
“Regardless of whether the pandemic dissipates or recurs, it is impossible for them to maintain their momentum in the long run,” Athaporn said, adding that other producers would rush to fill the supply gap.