Krungsri Securities stated that NER has lowered its 2026 sales volume target to 440,000 tonnes from 450,000 tonnes due to the impact of El Niño on rubber output, but has maintained its revenue target at approximately 30 billion baht, flat year-on-year, as higher selling prices offset the volume shortfall. For 2027, the company targets sales volume of 400,000 tonnes, down 10 percent year-on-year, amid persistently tight rubber supply, yet keeps its revenue target steady at around 30 billion baht, expecting higher average selling prices to compensate for lower volumes and support gross margin expansion. On the fundraising front, the company may seek loans or issue debentures in late 2026 to early 2027 to accommodate rising raw material costs, focusing primarily on cash flow management and not on capacity expansion in a tight supply environment. As of the second quarter of 2026, the company's debt-to-equity ratio stood at 1.1 times, and it maintains a full-year dividend payout ratio of 40 percent, with an interim dividend of 0.05 baht per share declared, representing a yield of 1.1 percent for the first half, with the XD date set for 20 August 2026. Krungsri Securities maintains a buy recommendation and a 2027 target price of 5.30 baht, with a neutral view on NER, as positives from higher selling prices and improving gross margin trends are offset by concerns over potentially higher interest expenses from fundraising, which are not yet factored into current estimates and remain uncertain in both amount and timing. For the third quarter of 2026, normalised profit is expected to recover both year-on-year and quarter-on-quarter, driven mainly by rising rubber selling prices, while gross margin is likely to expand due to the lag between immediate selling price increases and the slower adjustment of weighted average inventory costs.
North East Rubbers Public Company LimitedHigher selling prices offset volume shortfall, supporting revenue and margins.
El Niño and tight supply reduce rubber output, likely boosting prices.
