DHC – GPM remains compressed - Earnings Flash
  • 2024-07-30T00:00:00
  • Company Research
  • DHC announced its H1 2024 results, with revenue increasing 11% YoY, but NPAT-MI decreasing 35% YoY. These results fulfill 50% and 37% of our respective 2024F full-year forecasts.
  • According to our estimates, in Q2 2024, Southeast Asia OCC import prices remained at a high level but reduced by 5% QoQ. In contrast, packaging paper prices in southern Vietnam continued trending up with a 6% QoQ increase, reaching approximately VND9,700/kg by the end of June.
  • In Q2 2024, DHC’s revenue increased by 25% QoQ and 27% YoY. This is due to slightly higher sales volume and paper prices recovering, per management. Additionally, in Q2 2024, the second carton boxes factory sales volume increased 51% YoY, contributing an NPAT of VND3bn.
  • However, the GPM fell from 17.2% in Q2 2023 to 10.8% in Q2 2024, mainly due to the rise in OCC input prices outpacing the recovery in paper prices.
  • We maintain our expectation for a recovery in H2 2024 earnings, supported by a gradual widening in the price spread and high-cost input OCC inventory depleting. Nevertheless, we foresee potential downside risk to our forecasts, pending a fuller review.

DHC’s H1 2024 results

VND bn

Q2 2023

Q1 2024

Q2 2024

Q2 2024 YoY

H1 2023

H1 2024

H1 2024 YoY

H1 2024/2024F

2024F

Revenue

801                               

811                                     

1,016        

27%

1,649                         

1,827              

11%

50%

3,646                

Gross profit

137                               

104                                   

110             

-20%

284                          

214                 

-25%

41%

525                     

Operating profit

103                               

67                                      

72               

-30%

203                           

139                 

-32%

37%

375                      

PBT

107                               

63                                     

70              

-35%

206                          

133                  

-35%

36%

367                      

NPAT-MI

92                                 

56                                      

60              

-34%

178                           

116                 

-35%

37%

315                      

GPM

17.2%

12.8%

10.8%

 

17.2%

11.7%

 

 

14.4%

SG&A/revenue

-4.4%

-4.6%

-3.7%

 

-4.8%

-4.1%

 

 

-4.1%

OPM

12.8%

8.2%

7.1%

 

12.3%

7.6%

 

 

10.3%

NPM

11.5%

6.9%

5.9%

 

10.8%

6.3%

 

 

8.6%

Source: DHC, Vietcap forecast

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