- 2024-10-30T00:00:00
- Company Research
- DHC released its 9M 2024 results with revenue up 11% YoY, while NPAT-MI declined by 18% YoY. These results are in line with our expectations, fulfilling 74% and 73% of our respective 2024 full-year forecasts. We foresee insignificant changes to our forecast, pending a fuller review.
- GPM showed gradual improvement, rising from 10.8% in Q2 2024 to 12.7% in Q3 2024, although still below the 17.2% seen in Q2 2023. This margin growth reflects recovering paper prices which enhance the price spread (paper prices - OCC prices), coupled with no more low-margin steel trading activities.
- We estimate that in Q3 2024, the price of imported Southeast Asia OCC decreased slightly by 2% QoQ. Additionally, packaging paper prices in southern Vietnam were decreased more slowly by 1% to VND9,400/kg.
- We maintain our expectation for a continued recovery in earnings, supported by a gradual widening in the price spread, coupled with increasing utilization of carton box factories.
- DHC received investment approval for the Giao Long 3 (GL3) factory in early October. Following this, DHC is going to apply for the construction permit. We note that GL3 has a planned capex of VND1.8 trillion, a production capacity of 1,000 tonnes per day, and construction is set to begin in Q1 2025, with operations targeted for Q3 2027.
DHC’s 9M 2024 results
VND bn | Q3 2023 | Q2 2024 | Q3 2024 | QoQ | YoY | 9M 2023 | 9M 2024 | YoY | 9M 2024 as % of 2024F | 2024F |
Revenue | 794 | 1,016 | 896 | -12% | 13% | 2,443 | 2,723 | 11% | 74% | 3,687 |
Gross profit | 107 | 110 | 114 | 4% | 7% | 391 | 328 | -16% | 70% | 468 |
Operating profit | 72 | 72 | 76 | 6% | 7% | 275 | 215 | -22% | 69% | 313 |
PBT | 64 | 70 | 90 | 28% | 40% | 271 | 223 | -18% | 74% | 303 |
NPAT-MI | 56 | 60 | 77 | 28% | 38% | 234 | 193 | -18% | 73% | 266 |
GPM | 13.5% | 10.8% | 12.7% |
|
| 16.0% | 12.1% |
|
| 12.7% |
SG&A/revenue | -4.5% | -3.7% | -4.2% |
|
| -4.7% | -4.2% |
|
| -4.2% |
OPM | 9.0% | 7.1% | 8.5% |
|
| 11.3% | 7.9% |
|
| 8.5% |
NPM | 7.0% | 5.9% | 8.6% |
|
| 9.6% | 7.1% |
|
| 7.2% |
Source: DHC, Vietcap forecast
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