- 2024-04-25T00:00:00
- Company Research
- BMP reported Q1 2024 net revenue of VND1.0tn (USD40.1mn; -31% QoQ, -30% YoY) and NPAT-MI of VND190bn (USD0.8mn; -26% QoQ, -32% YoY), fulfilling 18% and 19% of both management’s guidance and our respective forecasts.
- Top-line performance showed weakness: In Q1 2024, BMP posted net revenue of VND1.0tn (USD40.1mn), marking a 31% QoQ and 30% YoY decline. We attribute this to weak domestic demand for construction materials due to a slower-than-expected recovery in the residential real estate sector, particularly in the southern region where BMP dominates the market.
- Gross margin continued to post a strong performance: Despite the revenue shortfall, GPM increased to 42.4% in Q1 2024 from 40.6% in Q4 2023 and 38.5% in Q1 2023, which we attribute to favorable input plastic costs and BMP’s efforts in production optimization. We note that input PVC prices remained low during Q1 2024 due to sluggish demand from China.
- EBIT margin improved QoQ but declined YoY: Quarterly, EBIT margin improved by 185bps, mostly due to 180bps GPM expansion. However, annually, EBIT margin fell by 100bps despite a 390bps rise in GPM, as SG&A/Sales spiked by 490bps. This increase includes a 260bps rise in trade discounts/sales and a 230bps hike in normalized SG&A expenses/sales (i.e., SG&A excluding trade discounts). We attribute the increase in the trade discount/sales ratio to BMP’s passing on lower input prices to customers via promotions to maintain market share. The rise in the normalized SG&A/sales ratio was due to a strong YoY decline in sales as absolute normalized SG&A remained relatively stable YoY at around VND60bn (USD2.4mn).
- We foresee a slight downside risk to our 2024/25F earnings projections, predominantly due to the potential revenue downside that may outweigh GPM upside. This is due to Q1 2024 earnings trailing our expectations due to weak sales performance despite better-than-expected GPM results.
BMP’s Q1 2024 results
VNDbn | Q1 2023 | Q4 2023 | Q1 2024 | QoQ | YoY | 2024F | Q1 as % of 2024F |
Net revenue | 1,440 | 1,454 | 1,003 | -31% | -30% | 5,673 | 18% |
Gross profit | 555 | 591 | 425 | -28% | -23% | 2,157 | 20% |
SG&A expense | -187 | -261 | -179 | -31% | -4% | -857 | 21% |
Operating profit | 368 | 330 | 246 | -25% | -33% | 1,299 | 19% |
- Financial income | 23 | 29 | 19 | -35% | -17% | 86 | 22% |
- Financial expenses | -40 | -43 | -28 | -34% | -30% | -147 | 19% |
Net other income/loss | 0 | 3 | 0 | -82% | 52% | 1 | 48% |
PBT | 351 | 319 | 237 | -26% | -32% | 1,239 | 19% |
NPAT-MI | 281 | 257 | 190 | -26% | -32% | 991 | 19% |
SG&A breakdown |
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Total | 187 | 261 | 179 | -31% | -4% | 857 | 21% |
Trade discount | 127 | 169 | 114 | -32% | -10% | 607 | 19% |
Normalized SG&A | 59 | 92 | 65 | -30% | 9% | 250 | 26% |
GPM | 38.5% | 40.6% | 42.4% |
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| 38.0% | 38.5% |
SG&A exp./Sales | 13.0% | 17.9% | 17.8% |
|
| 15.1% | 13.0% |
Trade discount/Sales | 8.8% | 11.6% | 11.4% |
|
| 10.7% | 8.8% |
Normalized SG&A/Sales | 4.1% | 6.3% | 6.5% |
|
| 4.4% | 4.1% |
OPM | 25.6% | 22.7% | 24.5% |
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| 22.9% | 25.6% |
NPM | 19.5% | 17.7% | 18.9% |
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| 17.5% | 19.5% |
Source: BMP, Vietcap forecast (last updated March 8, 2024)
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