DHC - Q4 revenue approximate to Q3, in line with our expectations – Earnings Flash
  • 2024-01-30T00:00:00
  • Company Research
  • DHC announced Q4 2023 results with revenue and NPAT declining 14% and 9% YoY, respectively. Full-year 2023 revenue and NPAT decreased 17% YoY and 18% YoY, fulfilling 104% and 99% of our forecasts, respectively.
  • Q4 2023 gross profits edged up 5% QoQ amid an improvement in selling prices. We estimate that DHC’s 2023 paper ASP hit a 10-year low of VND8,900/kg. However, the carton paper price in southern Vietnam bounced back from VND7,500/kg to VND8,400/kg during Q4 2023.  
  • Paper prices in southern Vietnam edged up further YTD from VND8,400/kg to VND8,900/kg, thanks to recovering export demand and the upcoming Lunar New Year that boosts Chinese and Vietnamese consumption.
  • DHC management expects another round of price hikes in March 2024. As a result, we expect Q1 – Q2 2024 earnings to recover further.
  • DHC’s long-term outlook remains uncertain as management is reconsidering its expansion plan (the Giao Long 3 project is expected to come online in 2027). It is looking for the most viable value-added product (e.g., kraftliner or tissue) for this project because the mass paper segment is oversupplied.
  • We foresee no potential changes to our forecasts, pending a more comprehensive review.

DHC’s 2023 results

VND bn

Q3 2023

Q4 2022

Q4 2023

 

Q4 2023 YoY

2022

2023

2023 YoY

2023/ 2023F

2023F

Revenue

794

946

816

-14%

2,443

3,259

-17%

104%

3,142

Gross profit

107

119

112

-6%

391

504

-17%

99%

508

Operating profit

72

91

84

-8%

275

359

-20%

98%

367

Non-operating items

-7

5

3

-1%

-4

-1

-94%

3%

-11

PBT

64

96

87

-9%

271

358

-18%

101%

356

NPAT-MI

56

82

75

-9%

234

309

-18%

99%

313

 

 

 

 

 

 

 

 

 

 

GPM

13.5%

12.6%

13.8%

 

16.0%

15.5%

 

 

16.2%

SG&A/revenue

4.5%

3.0%

3.5%

 

4.8%

4.4%

 

 

4.5%

OPM

9.0%

9.6%

10.3%

 

11.3%

11.0%

 

 

11.7%

NPM

7.0%

8.7%

9.2%

 

9.6%

9.5%

 

 

10.0%

Source: DHC, Vietcap

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