- 2024-07-22T00:00:00
- Company Research
- DGC reported its Q2 2024 results with revenue of VND2.5tn (+4% YoY; +6% QoQ) and NPAT-MI of VND842bn (flat YoY, +22% QoQ).
- Overall, H1 2024 revenue and NPAT-MI are in line with our expectations, achieving 43% and 45% of our full-year forecasts, respectively. As a result, we see insignificant changes to our forecasts, pending a fuller review.
- We expect DGC’s earnings to continue recovering in H2 2024, driven by the industrial phosphorus chemical (IPC) segment. This recovery is supported by a YoY surge in global chip sales, and chip manufacturers continue shifting input yellow phosphorus out of China, which should boost Vietnam’s yellow phosphorus demand. Notably, TSMC – the world’s largest semiconductor manufacturer – reported revenue increasing 28% YoY in H1 2024.
- We estimate that in Q2 2024, P4 prices for East Asia and US customers remained at USD4,200/tonne, while prices for Indian customers edged down QoQ to USD3,650/tonnes (vs USD3,700/tonnes in Q1 2024). We expect the contributions from customers in East Asia and the US to continue rising, which should support ASP increasing during H2 2024 and beyond.
- The ethanol factory is scheduled to come into operation in early Q4 2024, according to management. We forecast ethanol revenue in 2024F/25F of VND640bn (USD25mn) and VND1.5tn (USD60mn), respectively. In which, ethanol 2025F revenue includes 64,000 cbm of ethanol (full capacity) sold at VND20mn/cbm and VND200bn (USD8mn) of byproducts.
DGC’s H1 2024 results
| Q2 2023 | Q1 2024 | Q2 2024 | YoY | H1 2023 | H1 2024 | YoY | H1 as % of 2024F | 2024F |
ASP* (VND mn/tonne) | 78 | 72 | N/A | N/A | 81 | N/A | N/A | N/A | 72 |
Industrial phosphorus chemicals | 109 | 96 | N/A | N/A | 115 | N/A | N/A | N/A | 98 |
Agricultural phosphates | 46 | 47 | N/A | N/A | 48 | N/A | N/A | N/A | 46 |
Revenue | 2,414 | 2,385 | 2,505 | 4% | 4,897 | 4,889 | 0% | 43% | 11,413 |
In which:* |
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- Industrial phosphorus chemicals | 1,477 | 1,272 | N/A | N/A | 3,095 | N/A | N/A | N/A | 6,374 |
- Agricultural phosphates | 822 | 950 | N/A | N/A | 1,550 | N/A | N/A | N/A | 3,715 |
Gross profit | 940 | 766 | 983 | 5% | 1,831 | 1,749 | -4% | 46% | 3,778 |
Selling expenses | -108 | -105 | -117 | 8% | -223 | -222 | 0% | 43% | -520 |
G&A expenses | -37 | -40 | -53 | 45% | -71 | -94 | 32% | 52% | -180 |
EBIT | 796 | 621 | 813 | 2% | 1,537 | 1,434 | -7% | 47% | 3,078 |
Financial income | 181 | 165 | 165 | -9% | 345 | 330 | -4% | 41% | 797 |
Financial expense | -25 | -18 | -16 | -36% | -45 | -34 | -24% | 41% | -83 |
Others | 1 | 1 | -9 | N/M | -1 | -8 | 1177% | N/M | 0 |
PBT | 953 | 769 | 953 | 0% | 1,837 | 1,722 | -6% | 45% | 3,792 |
NPAT-MI | 843 | 673 | 842 | 0% | 1,630 | 1,515 | -7% | 45% | 3,345 |
EBITDA | 875 | 727 | 813 | -7% | 1,698 | 1,540 | -9% | 45% | 3,439 |
Margin |
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GPM | 39.0% | 32.1% | 39.2% |
| 37.4% | 35.8% |
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| 33.1% |
SG&A as % of revenue | -6.0% | -6.1% | -6.8% |
| -6.0% | -6.5% |
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| -6.1% |
EBIT margin | 33.0% | 26.0% | 32.5% |
| 31.4% | 29.3% |
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| 27.0% |
NPAT-MI margin | 34.9% | 28.2% | 33.6% |
| 33.3% | 31.0% |
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| 29.3% |
EBITDA margin | 36.3% | 30.5% | 32.5% |
| 34.7% | 31.5% |
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| 30.1% |
Source: DGC, Vietcap
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