We attended BMP’s AGM in HCMC on April 29. Our key takeaways are as follows:

2024 earnings guidance seems ambitious, given Q1’s muted results: Shareholders approved management’s 2024 guidance for revenue of VND5.5tn (USD220mn; +6.5% YoY) and NPAT-MI of VND1.0tn (USD41.2mn; -1% YoY). This guidance broadly aligns with our expectations as 2024G revenue and NPAT-MI are equivalent to 98% and 104% of our current forecasts, respectively. We note that the 2024G earnings target looks challenging, given that Q1 2024 NPAT-MI only fulfilled 18% of the full-year guidance. However, management believes this target is still within reach due to their expectation that (1) plastic pipe demand will recover stronger in 2H24 due to a second-half revival in the domestic real estate sector, and (2) PVC resin input prices will remain stable throughout the year, enabling BMP to sustain its high profitability. More details on BMP’s Q1 2024 results can be found in our latest Earnings Flash.

FY2023 dividend with 99% payout ratio: Shareholders approved an FY2023 cash dividend of VND12,600/share (equivalent to 99% dividend payout on FY2023 NPAT-MI), of which VND6,500/share was already paid in November 2023. The timeline for the remaining VND6,100/share amount (equivalent to a 5.6% dividend yield based on April 26’s closing price of VND109,000/share) is not yet available. This FY2023 dividend scheme is slightly higher than our forecast of VND12,000/share as we assume a 95% payout ratio.out ratio.

Resolution on FY2024 dividend: Shareholders approved BMP’s FY2024 dividend at a minimum of 50% of 2024 profit after tax, either in cash or in stock. Based on BMP’s historical track record, we currently assume the first tranche of the FY2024 dividend of VND5,400/share to be paid within FY2024. Combined with the FY2023 second interim dividend of VND6,100/share, our next-12M total cash dividend forecast is VND11,500/share, equivalent to a 96% payout ratio and 10.6% dividend yield at April 26’s closing price of VND109,000/share.

Changes in BOD members: Shareholders have approved the resignation of a BOD member, Mr. Poramate Larnroongroj, age 61, who also serves as Managing Director of Nawaplastic Industries Co., Ltd. (hereafter, Nawaplastic). In his place, the AGM approved the election of Mr. Krnit Bunnag, age 49, who is also a Managing Director at Nawaplastic. As such, we do not anticipate any significant changes to BMP's operations and/or strategic direction following this transition. Nawaplastic, a Thailand-based leading plastic product manufacturer, is BMP’s largest strategic shareholder with a controlling 54.99% stake in the company, as of end-2023.

BMP remains our favorite defensive pick for the construction materials sector in 2024 as it has a strong defensive balance sheet and high dividend yield. BMP’s end-Q1 2024 held a strong cash balance of VND2.2tn (USD90mn) and minimal debt balance of VND55bn (USD2.2mn), of which none was long-term debt. We currently have a target price of VND119,100/share for BMP, as detailed in our Update Report, dated March 8, 2024.

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