BMP posted weak Q2 2021 results with revenue of VND1.5tn (USD63.1mn; +16% YoY) and NPAT-MI of VND42bn (USD1.8mn; -73% YoY). The discrepancy between revenue and NPAT-MI growth for the quarter was mainly due to lower-than-expected gross margin amid the negative impact of an input plastic price rally in H1 2021. BMP’s Q2 2021 gross margin dropped to only 12.9% vs 17.9% in Q1 2021 and 28.2% in Q2 2020. We note that BMP’s gross margin in Q2 and Q3 2020 was abnormally high due to the global oil price collapse and in turn low input plastic prices.

For H1 2021, BMP recorded revenue of VND2.6tn (USD113.3mn; +15% YoY) and NPAT-MI of VND126bn (USD5.5mn; -51% YoY). Despite BMP’s H1 2021 revenue being in line with our expectation, the lower-than-expected gross margin resulted in H1 2021 NPAT-MI completing only 27% of our full-year forecast. As a result, we anticipate downside risk to BMP’s 2021F earnings forecasts — especially on gross margin — as stated in our last Update Report, BMP [OUTPERFORM +16.7%] - High plastic prices hit Q1; expected recovery in H2 2021, dated May 17, 2021, pending a fuller review.