- 2024-01-22T00:00:00
- Company Research
DGC released its Q4 2023 results with revenue and NPAT-MI edging down 3% and 6% QoQ, respectively.
2023 revenue and NPAT dropped 33% and 44% YoY, completing 98% and 93% of our forecasts, respectively.
In Q4 2023, demand from East Asian customers — who use P4 and derivatives for electronics applications — remained strong. P4 prices to these customers remained at ~USD4,700/tonne.
However, as domestic Chinese P4 prices slumped 10% during Q4 2023, sales volume to India – the mass market – fell QoQ. Per DGC, sales to these customers have improved YTD.
DGC set an NPAT target of VND700bn (USD29mn), marking a decline QoQ and YoY. However, we note that DGC almost always beats its quarterly targets.
Agricultural phosphate prices increased amid trade restrictions on phosphate fertilizers, including that from China.
As industrial phosphorus chemicals command higher profit margins, 2023’s sales mix trailed our expectation. 2023 GPM hit 35.4% vs our forecast of 37.8%.
Due to weaker-than-expected demand from Indian customers, we see potential downside risks to our forecasts, pending a fuller review. However, we maintain our view of a rebound in ASP and sales volume amid global restocking and surging semiconductor sales.
DGC’s Q4 2023 results
VND bn | Q3 2023 | Q4 2022 | Q4 2023 | Q4 2023 YoY | 2022 | 2023 | YoY | 2023/ 2023F | 2023F |
ASP* (VND mn/tonne) | 67 | 93 | 63 | -32% | 108 | 71 | -34% | 99% | 72 |
Industrial phosphorus chemicals | 95 | 121 | 93 | -23% | 146 | 105 | -28% | 103% | 102 |
Agricultural phosphates | 45 | 63 | 47 | -25% | 70 | 47 | -33% | 100% | 47 |
Revenue | 2,464 | 3,112 | 2,388 | -23% | 14,444 | 9,748 | -33% | 98% | 9,961 |
In which:* |
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- Industrial phosphorus chemicals | 1,494 | 1,897 | 1,157 | -39% | 9,471 | 5,746 | -39% | 95% | 6,071 |
- Agricultural phosphates | 902 | 948 | 1,125 | 19% | 4,649 | 3,577 | -23% | 106% | 3,390 |
Gross profit | 840 | 1,289 | 784 | -39% | 6,767 | 3,455 | -49% | 92% | 3,768 |
Selling expenses | -118 | -157 | -95 | -39% | -624 | -436 | -30% | 90% | -484 |
G&A expenses | -39 | -55 | -49 | -10% | -148 | -159 | 8% | 106% | -149 |
EBIT | 683 | 1,078 | 640 | -41% | 5,995 | 2,860 | -52% | 91% | 3,135 |
Financial income | 203 | 198 | 194 | -2% | 533 | 743 | 39% | 101% | 735 |
Financial expense | -22 | -75 | -36 | -53% | -150 | -102 | -32% | 98% | -104 |
Others | -1 | -5 | 0 | N.M. | -5 | -1 | -73% | 0% | 0 |
PBT | 864 | 799 | 799 | -33% | 6,373 | 3,499 | -45% | 93% | 3,766 |
NPAT-MI | 761 | 720 | 720 | -30% | 5,566 | 3,111 | -44% | 92% | 3,363 |
EBITDA | 683 | 738 | 738 | -36% | 6,291 | 3,212 | -49% | 93% | 3,465 |
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GPM | 34.1% | 41.4% | 32.9% |
| 46.8% | 35.4% |
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| 37.8% |
SG&A as % of revenue | 6.4% | 6.8% | 6.1% |
| 5.3% | 6.1% |
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| 6.4% |
EBIT margin | 27.7% | 34.6% | 26.8% |
| 41.5% | 29.3% |
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| 31.5% |
EBITDA margin | 27.7% | 37.0% | 30.9% |
| 43.6% | 33.0% |
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| 34.8% |
NPAT-MI margin | 30.9% | 33.2% | 61.4% |
| 38.5% | 39.6% |
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| 33.8% |
Source: DGC, Vietcap (revenue breakdown and ASP are Vietcap’s estimates)
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