STGT sells 438m IPO shares on high demand
published : 30 Jun 2020 at 04:00
newspaper section: Business
Sri Trang Gloves Thailand Plc (STGT) sold 438.78 million IPO shares worth 34 baht per share following high demand from institutional and retail investors, as rubber glove demand has surged during the Covid-19 crisis.
The 438.78 million IPO shares account for 30.7% of total issued common shares. This puts the company's market capitalisation at 14.9 billion baht.
The company, ranked third globally in rubber glove production, has its first trading day on the Stock Exchange of Thailand (SET) index this Thursday.
STGT is a subsidiary of SET-listed Sri Trang Agro-Industry Plc, a fully integrated natural rubber company with an 8% market share of global natural rubber consumption and a 7% market share of global glove consumption.
STGT director Jarinya Jirojkul said the company plans to allocate funds raised from IPO shares to expand and improve its production capacity along with using it as working capital.
The company's production capacity for rubber gloves is registered at 32.6 billion pieces per year from its factories in Songkhla, Surat Thani and Trang provinces.
The production capacity will be increased to more than 50 billion pieces per year by 2024 with the construction of new factories in Chumphon province and Sadao district in Songkhla, said Ms Jarinya.
The production capacity will be enhanced to more than 70 billion and 100 billion pieces by 2028 and 2032, she said.
STGT also plans to expand into new markets with high growth potential in Asia-Pacific, Africa and South America, said Ms Jarinya, without naming any specific country.
The company reported total revenue of 12.2 billion baht in 2019, up 10.3% year-on-year, with a net profit of 614 million baht on the back of increased sales in new markets in India, South Africa and Latin American countries.
For this year's first quarter, STGT reported total revenue of 3.87 billion baht, up 28.9% year-on-year, and 422 million worth of net profit, up 184% year-on-year.
Pongsak Phrukpaisal, managing director of Kasikorn Securities, one of the underwriters of STGT's IPO shares, said the company's IPO shares enticed investors' interest because STGT has expertise in rubber glove production and its products are exported worldwide.
The Covid-19 pandemic has prompted every industry to adopt the use of rubber gloves, with the Malaysian Rubber Glove Manufacturers Association forecasting annual demand for rubber gloves will rise by 12%, said Mr Pongsak.