- 2024-07-22T00:00:00
- Company Research
- STK reported its Q2 2024 results with revenue increasing 14% QoQ, but NPAT declining VND56bn (vs Q1 2024’s marginal NPAT of VND1bn).
- Although we anticipated minimal earnings for Q2 2024 due to constraints on sales volume from the automatic quality control system, the actual earnings fell short of our expectations due to a narrower price gap (selling price – input PET chip price) and FX losses.
- For H1 2024, revenue and NPAT fulfilled 29% and 0% of our respective 2024 full-year forecasts. We foresee a downside risk to our full-year forecast, pending a fuller review.
- According to STK, Q2 2024 orders recovered significantly to 9,000 tonnes (+70% QoQ; +15% YoY). However, the actual sales volume was 5,900 tonnes (+12% QoQ; -25% YoY) due to the automatic quality control system issues. In which, the contribution of recycled yarn has improved.
- GPM dropped significantly to 3.2%, from 12.2% in Q1 2024. The decline was mainly due to a 5% QoQ cut in the blended price gap, while the input PET chip price increased by 8% QoQ.
- SG&A/revenue fell from 7.4% in Q1 2024 to 5.1% in Q2 2024 as STK shifted to FOB export terms for most orders, allowing high shipping costs to be passed onto customers.
- FX losses exacerbated overall losses, with STK incurring VND54bn (USD2.2mn) of FX losses as the USD/VND appreciated by 2% during Q2 2024. This impacted STK’s USD loans used to fund its Unitex factory. As of the end of H1 2024, STK had USD52mn (VND1.3tn) in outstanding USD-denominated debt.
STK’s H1 2024 results
| Q2 2023 | Q1 2024 | Q2 2024 | YoY | H1 2023 | H1 2024 | YoY | H1 as % of 2024F | 2024F |
Revenue | 407 | 266 | 303 | -25% | 695 | 569 | -18% | 29% | 1,995 |
Virgin yarn | 177 | 159 | 157 | -11% | 299 | 316 | 6% | 34% | 944 |
Recycled yarn | 230 | 107 | 146 | -36% | 396 | 253 | -36% | 24% | 1,051 |
Gross profit | 60 | 32 | 10 | -84% | 78 | 42 | -46% | 15% | 285 |
Virgin yarn | 4 | 6 | -13 | -427% | -8 | -7 | N.M | N/M | 40 |
Recycled yarn | 57 | 26 | 23 | -59% | 87 | 49 | -43% | 20% | 245 |
Selling expenses | -4 | -6 | -2 | -48% | -7 | -8 | 11% | 23% | -34 |
G&A expenses | -17 | -14 | -14 | -18% | -31 | -28 | -10% | 49% | -56 |
EBIT | 40 | 13 | -6 | -115% | 40 | 7 | -83% | 4% | 195 |
Financial income | -6 | 6 | 8 | N/M | 9 | 14 | 62% | 48% | 29 |
Financial expenses | 1 | -18 | -58 | -5580% | -12 | -75 | 531% | 128% | -59 |
Other non-ops | 0 | 0 | 0 | N/M | 0 | 0 | N/M | N/M | 0 |
PBT | 36 | 1 | -55 | -253% | 39 | -54 | -239% | N/M | 167 |
NPAT | 38 | 1 | -56 | -248% | 40 | -55 | -239% | N/M | 154 |
Margins |
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Blended GPM | 14.8% | 12.2% | 3.2% |
| 11.3% | 7.4% |
|
| 14.3% |
Virgin yarn GPM | 2.3% | 3.9% | -8.5% |
| -2.7% | -2.2% |
|
| 4.2% |
Recycled yarn GPM | 24.6% | 24.5% | 15.8% |
| 21.9% | 19.4% |
|
| 23.3% |
SG&A/sales | 5.0% | 7.4% | 5.1% |
| 5.4% | 6.2% |
|
| 4.5% |
EBIT margin | 9.8% | 4.8% | -1.9% |
| 5.7% | 1.2% |
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| 9.8% |
EBITDA margin | 15.4% | 13.4% | -1.9% |
| 3.4% | 5.2% |
|
| 16.5% |
NPAT margin | 9.2% | 0.3% | -18.3% |
| 5.7% | -9.6% |
|
| 7.7% |
Source: STK, Vietcap
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