Friday, June 14, 2024


Dhaka Tribune

Strip Tinning up 50% more on no real news - why is this?

There’s no obvious reason for STG to be up 50% but perhaps there’s an unobvious one?

Update : 21 Jun 2023, 03:35 PM

Strip Tinning Holdings (LON: STG) is up 50% today on the back of no obvious news release. There's nothing from the company so far and it doesn't seem that anyone has heavily tipped it or anything. We could just write this down as one of those things but it's also possible to have a slightly deeper look. 

Of course, Strip Tinning hasn't been a happy prospect for those who bought in at the IPO at 180p, given that the price was down around 40 only a couple of days ago. But it is possible to go back to when the results started going wrong to think through what might be doing right now. Strip Tinning is in the EV business, which is nice but not the major part of the business. The core, currently, is automotive glass - more importantly for us here, into new cars, not the replacement market. As they said back when the wheels started to come off: “However, the reported deterioration in market conditions in the automotive sector due to a number of well publicised factors are impacting the Company's glazing sales and profits. The European car market, which accounted for 57% of Group sales in 2021, has seen a marked softening with passenger car registrations declining 20.5% in March 2022, compared to the same period in 2021. Ongoing supply chain disruptions, exacerbated by Russia's invasion of Ukraine, which has heightened the shortage of semiconductors and wiring harnesses, and recent COVID-19 related lockdowns in Shanghai have all negatively affected car production, with a number of OEM plants now halting production.  The Company's glazing customers are multi-national Tier One suppliers, through which its products reach the majority of global OEMs in multiple global locations.” Well, if your major output goes into the new car sector and the new car sector starts having problems then you're going to have problems.

Strip Tinning Holdings share price from London Stock Exchange

As we say, there's no direct news from the company to explain the current share price rise. But there is lots more information more generally about how the new car market has come back to life. Perhaps the most significant indicator of that being how used car prices are falling heavily. The supply problems for new increased to cost of used, so when used fall again - and we're seeing this in inflation statistics - then we can assume new production has revived.

We cannot say that this is a definitive analysis simply because there's so little direct information available, everything here has to be done, for the moment, by implication. But our view is that Strip Tinning is improving because the new car business is.

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