PLX - Strong Q2 results despite unfavorable oil price in Q2; upside potential evident; new decree expected late this year - Earnings Flash
  • 2024-07-31T00:00:00
  • Company Research
  • Q2 NPAT-MI came in at VND1.2tn (+48% YoY, + 12% QoQ) with revenue of VND73.8tn (+12% YoY; -2% QoQ). This is mainly driven by sales volume increasing 1% YoY (from Q2 2023 high base), GPM expansion from 5.9% to 6.3%, and one-off profit of VND121bn. The Q2 Brent oil price experienced a downward trend for most of Q2 vs a general upward trend in Q1, however, the average price was USD85/bbl (+9% YoY, 4% QoQ) vs Q1’s average of USD82/bbl. We attribute the robust profit to PLX’s strong capability in sourcing inputs, insignificant forex loss, and insignificant inventory provisions/write-backs.
  • H1 revenue and NPAT-MI were VND148.9tn (+12% YoY) and VND2.3tn (+59% YoY), completing 52% and 60% of our respective full-year forecasts. 
  • We expect significantly higher H2 NPAT vs H1 with the MoIT (Ministry of Industry & Trade) & MoF’s (Ministry of Finance) recent upward adjustment in regulated costs, equaling 6% (2x the increase in 2023) for gasoline and 14% (4.7x the increase in 2023) for diesel, effective from July 4, in addition to 2% higher estimated sales volume than in H1. 
  • Additionally, the MoIT will submit the revised Decree on the petroleum industry to the Government for approval within Q3. We currently expect the new Decree to help petroleum distributors to better cover their operating costs and strengthen their profitability further.   Previously, the MoIT released a new, third draft of the decree to revise Decree 83/2014, Decree 95/2021, and Decree 80/2023. Overall, the third draft maintains the aims of the second draft in terms of: (1) allowing petrol distributors to set their own prices within a ceiling set by the Government, and (2) reducing intermediaries.
  • We see upside potential to our 2024 NPAT forecast, pending a fuller review. We currently have a BUY rating for PLX with a target price of VND55,000/share.

Figure 1: PLX’s H1 2024 results

VND bn

Q2 2023

Q2 

2024

YoY

H1 2023

H1 

2024

YoY

% of Vietcap’s 2024F

Brent oil price (USD/bbl) *

78

85

9%

80

83

4%

100%

Gasoline price (VND/liter) *

21,385

22,711

6%

21,736

22,490

3%

116%

Diesel price (VND/liter) *

18,540

20,362

10%

19,858

20,437

3%

106%

Domestic sales volume (mn m3)

2.66

2.67

0.5%

5.27

5.30

0.5%

49%

Revenue

65,750

73,837

12%

133,182

148,943

12%

52%

Gross profit

3,931

4,621

18%

7,490

9,291

24%

51%

Selling expense

-2,958

-3,209

8%

-5,766

-6,407

11%

51%

G&A expense

-219

-253

15%

-426

-491

15%

48%

Operating profit

753

1,159

54%

1,298

2,392

84%

54%

Financial income

432

430

0%

946

880

-7%

48%

Financial expenses

-355

-373

5%

-737

-748

1%

52%

   Interest expenses

-230

-177

-23%

-463

-371

-20%

35%

Profit/(loss) from JVs, associates

193

166

-14%

343

277

-19%

44%

PBT

1,064

1,503

41%

1,902

2,944

55%

56%

Income tax

-172

-228

33%

-344

-537

56%

51%

Reported NPAT-MI

813

1,199

48%

1,433

2,272

59%

60%

 

 

 

Δ ppts

 

 

Δ ppts

 

Gross profit margin %

6.0%

6.3%

+0.3

5.6%

6.2%

+0.6

 

Sales & marketing % sales

4.5%

4.3%

-0.2

4.3%

4.3%

-0.0

 

General admin % sales

0.3%

0.3%

+0.0

0.3%

0.3%

+0.0

 

EBIT Margin

1.1%

1.6%

+0.4

1.0%

1.6%

+0.6

 

NPAT-MI margin

1.2%

1.6%

+0.4

1.1%

1.5%

+0.4

 

Source: PLX, Vietcap (*average prices)

Figure 2: Platts Singapore price movement (reference point for Vietnamese petroleum retail prices), excluding the impact of the petroleum stabilization fund (USD/bbl)

Source: Ministry of Industry and Trade, Vietcap (data as of June 30, 2024)

Figure 3: Vietnamese E5 gasoline and diesel retail prices, including the impact of the petroleum stabilization fund (VND/liter)

Source: PLX, Vietcap (data as of June 30, 2024)

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