- 2024-10-16T00:00:00
- Company Research
BMP announced its 9M 2024 results with net revenue of VND3,565bn (USD142.6mn; -4% YoY; 78% of our 2024F forecast) and NPAT-MI of VND760bn (USD30.4mn; -3% YoY; 74% of our 2024F forecast). In Q3 2024, net revenue was VND1,407bn (USD56.3mn; +52% YoY; +22% QoQ) and NPAT-MI was VND290bn (USD11.6mn; +39% YoY; +3% QoQ). We foresee insignificant changes to our bottom line forecasts as the 9M 2024 NPAT-MI results were broadly in line with our expectations.
- Solid top-line recovery, slightly ahead of our forecast: In Q3 2024, BMP posted solid net revenue of VND1.4tn (USD56.3mn), marking a 22% QoQ and a 52% YoY surge from Q3 2023’s low base. We attribute this to recovery in the southern residential estate sector (BMP’s main market) and BMP’s increased promotion spending (please see below for more details).
- GPM remains strong: BMP posted Q3 2024 GPM of 43.1%, slightly lower QoQ but still elevated compared to historical levels. We attribute this solid performance to favorable input plastic prices, driven by sluggish construction demand from China which accounts for nearly half of global PVC resin demand - BMP’s key input material. In Q3 2024, average PVC resin prices rose 2% QoQ but declined 6.4% YoY. For 9M 2024, average PVC resin prices dropped 5.9% YoY.
- Normalized SG&A surged QoQ and YoY: Normalized SG&A/Sales (i.e., SG&A excluding trade discounts) surged QoQ to 8.0% from 5.1% in Q3 2024, which we believe was due to BMP organizing an overseas trip to Thailand for over 2,000 distributors in mid-July 2024. This trip is held once every two years to reward and strengthen relationships with its distributor network. The last trip was held in 2020, per BMP’s financial statements, and the next one was delayed until this year, which we attribute to COVID-19 and difficulties in the domestic real estate market, which pressured sales volume.
- Q3 promotion program accelerated, with a stronger focus on payment discounts over trade discounts: Financial expenses in Q3 2024 surged 119% QoQ and 180% YoY to VND71bn (USD2.8mn), solely driven by a sharp increase in payment discounts, which accounted for nearly 100% of financial expenses. In contrast, trade discounts grew only 8% QoQ and 15% YoY, with trade discounts/sales dropping to 6.3% from 11.4% in Q1 and 7.1% in Q2 2024. The total value of trade and payment discounts reached VND160bn (USD6.4mn) in Q3 2024, marking a 41% increase QoQ and 57% YoY, which we consider a key driver of the strong top-line performance for the quarter.
BMP’s 9M 2024 results
| Q3 2023 | Q2 2024 | Q3 2024 | QoQ | YoY | 9M 2023 | 9M 2024 | YoY | 2024F | 9M as % of 2024F |
Net revenue | 926 | 1,153 | 1,407 | 22% | 52% | 3,703 | 3,563 | -4% | 4,553 | 78% |
Gross profit | 398 | 506 | 606 | 20% | 52% | 1,526 | 1,537 | 1% | 1,987 | 77% |
SG&A expense | -134 | -141 | -200 | 43% | 50% | -522 | -520 | 0% | -673 | 77% |
Operating profit | 264 | 365 | 406 | 11% | 53% | 1,003 | 1,017 | 1% | 1,314 | 77% |
- Financial income | 32 | 17 | 20 | 18% | -38% | 89 | 56 | -37% | 80 | 70% |
- Financial expenses | -26 | -33 | -71 | 119% | 180% | -103 | -132 | 29% | -118 | 112% |
Net other income/loss | -2 | 1 | 8 | 703% | N.M. | -2 | 9 | N.M. | 1 | 936% |
EBT | 269 | 350 | 362 | 3% | 35% | 988 | 950 | -4% | 1,278 | 74% |
NPAT-MI | 209 | 280 | 290 | 3% | 39% | 784 | 760 | -3% | 1,022 | 74% |
SG&A breakdown |
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Total | 134 | 141 | 200 | 43% | 50% | 522 | 520 | 0% | 673 | 77% |
Trade discounts | 77 | 82 | 88 | 8% | 15% | 340 | 284 | -16% | 412 | 69% |
Normalized SG&A* | 57 | 59 | 112 | 91% | 96% | 182 | 236 | 30% | 261 | 90% |
GPM | 43.0% | 43.8% | 43.1% | 41.2% | 43.1% | 43.6% | ||||
SG&A exp./Sales | 14.5% | 12.2% | 14.2% | 14.1% | 14.6% | 14.8% | ||||
Trade discounts/Sales | 8.3% | 7.1% | 6.3% | 9.2% | 8.0% | 9.0% | ||||
Normalized SG&A/Sales | 6.2% | 5.1% | 8.0% | 4.9% | 6.6% | 5.7% | ||||
OPM | 28.6% | 31.7% | 28.8% | 27.1% | 28.5% | 28.9% | ||||
NPM | 22.5% | 24.3% | 20.6% | 21.2% | 21.3% | 22.5% |
Source: BMP, Vietcap’s forecast (last updated Sep 16, 2024). *Normalized SG&A is SG&A expenses excluding trade discount.
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