VCS [NOT RATED] - Domestic and export demand for engineered stone to recover

- We are providing an update on VCS following our last report, dated May 12, 2021.

- NPAT-MI took a substantial hit in 2022-2023 following stellar gains in 2021. The YoY decline of 20%/23% in 2022/2023, respectively, was mainly caused by weaker stone demand due to a slowdown in residential construction in North America and Vietnam (VCS’s largest markets).

- In 2024, we expect demand for engineered stone to gradually pick up. This should be driven by a gradual improvement in residential construction activity in North America and recovery in Vietnam’s real estate market, as well as a growing preference for engineered stone.