- 2024-01-19T00:00:00
- Company Research
- STK reported Q4 2023 results with revenue retreating 7% QoQ but NPAT jumping 88% QoQ, both from low bases.
- 2023 revenue and NPAT dropped 33% and 63% YoY, fulfilling 98% and 100% of our forecasts, respectively. We see no potential changes to our forecasts, pending a fuller review.
- Q4 2023 GPM expanded from 14.8% in Q3 2023 to 16.4% in Q4 2023 as the blended price gap (selling price - input PET chip price) grew 6% QoQ.
- Q4 2023 NPAT jumped QoQ although business slightly worsened as Q3 2023 recorded high, abnormal FX losses.
- We expect STK’s sales volume to show significant QoQ recovery in Q2 2024. While most brand owners’ inventory levels are now healthy, concerns over weakening consumption continue to dampen new orders. In addition, Q1 is typically a low season.
- We believe STK’s yarn sales can recover stronger than the downstream segments similar to how yarn sales dropped deeper than garments. This is a bullwhip effect that magnifies changes further up the value chain.
- Construction of STK’s new Unitex factory is now 90% complete. We currently assume this factory will come online in Q4 2024 due to weak demand. It will expand STK’s capacity by 60%.
STK’s 2023 results
VND bn | Q3 2023 | Q4 2022 | Q4 2023 | Q4 2023 YoY | 2022 | 2023 | 2023 YoY | 2023/ 2023F | 2023F |
Revenue | 378 | 430 | 352 | -18% | 2,115 | 1,425 | -33% | 98% | 1,456 |
Virgin yarn | 220 | 187 | 201 | 7% | 1,015 | 719 | -29% | 102% | 703 |
Recycled yarn | 157 | 243 | 152 | -37% | 1,099 | 706 | -36% | 94% | 753 |
Gross profit | 56 | 64 | 58 | -9% | 372 | 192 | -48% | 102% | 189 |
Virgin yarn | 18 | -3 | 18 | N.M. | 43 | 28 | -35% | 98% | 28 |
Recycled yarn | 38 | 67 | 40 | -40% | 329 | 164 | -50% | 102% | 160 |
Selling expenses | -7 | -4 | -6 | 58% | -19 | -20 | 1% | 101% | -20 |
G&A expenses | -15 | -17 | -15 | -14% | -64 | -60 | -6% | 103% | -59 |
EBIT | 34 | 43 | 37 | -13% | 288 | 112 | -61% | 101% | 110 |
Financial income | 7 | 17 | 3 | -84% | 29 | 19 | -36% | 83% | 23 |
Financial expense | -23 | -12 | -7 | -45% | -48 | -42 | -13% | 112% | -38 |
Others | 0 | 0 | 0 | -71% | 1 | 2 | 189% | N.M. | 0 |
PBT | 18 | 49 | 34 | -31% | 270 | 91 | -66% | 95% | 96 |
NPAT | 17 | 43 | 32 | -26% | 239 | 87 | -63% | 100% | 87 |
Margins |
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GPM | 14.8% | 14.9% | 16.4% |
| 17.6% | 13.5% |
| 13.0% |
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SG&A as % of revenue | 5.8% | 4.8% | 5.8% |
| 4.0% | 5.6% |
| 5.4% |
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EBIT margin | 9.0% | 10.0% | 10.6% |
| 13.6% | 7.8% |
| 7.6% |
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EBITDA | 15.1% | 15.7% | 17.2% |
| 18.7% | 14.3% |
| 14.1% |
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NPAT margin | 4.4% | 10.0% | 9.0% |
| 11.3% | 6.1% |
| 6.0% |
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Source: STK, Vietcap
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