Thailand: Sri Trang Gloves prices Bt15bn IPO at top

Charinya Chirojkul, president, Sri Trang Gloves

Sri Trang Gloves Thailand, the country’s largest producer of medical gloves, has priced its initial public offering at the top of the range as investors rush to take advantage of the Covid-19-related boom in the sector.

The world’s third-largest medical glove manufacturer has sold 438 million shares, or a 30% share in the company, to raise Bt14.9bn (US$485.3m). The deal priced at the top of the Bt32-34 price range.

Founded in 1989, the company manufactures gloves on seven sites across the country.

It is no surprise that the shares were in demand given the boost the medical glove manufacturers have had thanks to increased demand during the Covid-19 pandemic.

Shares in Top Glove, the world’s largest producer of medical gloves, are up over 50% over the past year and the Malaysian Rubber Gloves Producers Association is expecting market growth of 12% a year.

Sri Trang Gloves had profits last year of Bt613m (US$18.9m) on revenues of Bt12bn and intends to use money raised to increase the production of its gloves by 18% and to expand into new markets. For the first three months of the year, revenues leapt 25% to Bt3.8bn thanks to an almost 30% rise in demand for its gloves.

“Based on our forecasts and at the IPO price, Sri Trang trades at a 13% discount with the median of its peer group,” said Global Equity Research analyst Arun George who publishes on Smartkarma last week.

“Consequently, due to the combination of sound fundamentals and an attractive valuation, we would be inclined to participate in the IPO,” he added.

Finansa Securities and Kasikorn Securities are managing the deal.

Sri Trang shares debut on 2 July.