VHC - Earnings trail our expectations; positive 85% QoQ recovery - Earnings Flash
  • 2024-07-26T00:00:00
  • Company Research
  • VHC announced its H1 2024 results with revenue of VND6.1tn (USD237mn; +22% YoY) and NPAT-MI of VND484bn (USD19mn; -27% YoY), fulfilling 50% and 34% of our respective full-year forecasts. Revenue slightly tracks ahead of our expectation while earnings trailed our forecast as weak selling prices continued in Q2 2024. We see potential downside risk to our forecasts, pending a more comprehensive review.  
  • In H1 2024, VHC’s revenue was led by robust recovery across segments, including a 23% YoY increase in sales of frozen pangasius filets and related products (e.g., breaded fish, fish fat, fish meal, and feed), 32% YoY growth in sales of collagen and gelatin (C&G), coupled with a 69% YoY jump in rice (Sa Giang) products. The company experienced positive growth across key markets, including in the US (+8% YoY), Europe (+20% YoY), China (+16% YoY), and other countries (+45% YoY).  
  • Per our estimate, in H1 2024, GPM before inventory provisions decreased 6.6 ppts YoY to 13.4% vs 20.0% in H1 2023. This is chiefly because VHC’s pangasius filet’s ASP has been depressed at USD2.9/kg (-20% YoY) due to price-cautious global consumer spending in H1 2024. We note that between quarters, VHC typically recognizes inventory provisions and reversals of those provisions, which could complicate the interpretation of GPM movement in relation to selling prices and input costs.   
  • In Q2 2024, VHC’s gross profit and NPAT-MI jumped 73%/85% QoQ, respectively. This is due to (1) GPM improvements of 5.1 ppts QoQ which we believe to be driven by lower feed and farming costs, and (2) operating efficiencies as SG&A/sales declined 20 bps QoQ.

VHC’s Q2 and H1 2024 results 

VND bn 

Q2 2023 

Q1 2024 

Q2 2024 

YoY 

QoQ 

H1 2023 

H1 2024 

YoY 

H1 as % of 2024F 

Net revenue 

2,724  

2,856  

3,196  

17% 

12% 

4,945  

6,051  

22% 

50% 

*By market 

 

 

 

 

 

 

 

 

  

-       US 

927  

723  

1,049  

13% 

45% 

1,634  

1,772  

8% 

  

-       Europe 

405  

553  

537  

33% 

-3% 

910  

1,090  

20% 

  

-       China & Hong Kong 

324  

339  

300  

-7% 

-12% 

550  

639  

16% 

  

-       Others 

452  

629  

822  

82% 

31% 

569  

827  

45% 

  

-       Vietnam 

694  

807  

927  

34% 

15% 

1,252  

1,734  

38% 

  

*By product 

 

 

 

 

 

 

 

 

  

-       Collagen & gelatin 

169  

238  

219  

30% 

-8% 

347  

457  

32% 

  

-       Frozen filets & others 

2,495  

2,572  

3,033  

22% 

18% 

4,567  

5,605  

23% 

  

-       Rice products 

91 

176  

189 

108% 

7% 

216  

365  

69% 

  

Gross profit 

580 

266 

462 

-20% 

73% 

964  

728  

-25% 

36% 

SG&A 

-115 

-132 

-141 

23% 

7% 

-234 

-273 

17% 

44% 

EBIT 

465  

134  

320  

-31% 

139% 

730  

455  

-38% 

33% 

PBT 

521  

217  

393  

-25% 

81% 

780  

610  

-22% 

37% 

NPAT-MI 

439  

170  

314  

-29% 

85% 

658  

484  

-27% 

34% 

Gross margin 

21.3% 

9.3% 

14.4% 

 

  

19.5% 

12.0% 

 

 

SG&A/sales 

4.2% 

4.6% 

4.4% 

 

  

4.7% 

4.5% 

 

 

EBIT margin 

17.1% 

4.7% 

10.0% 

 

  

14.8% 

7.5% 

 

 

NPAT-MI margin 

16.1% 

5.9% 

9.8% 

 

  

13.3% 

8.0% 

 

 

Source: VHC, Vietcap’s forecast (*Revenue breakdowns by market and product are based on VHC’s preliminary results, of which the total revenue figure is slightly different from the official number)

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