- 2025-01-23T00:00:00
- Company Research
BMP announced its 2024 results aligning with our forecasts, with details as follows:
Full-year results:
- Net revenue: VND4.616bn (USD181.4mn, -10% YoY; 101% of our 2024F forecast).
- NPAT-MI: VND991bn (USD38.9mn, -5% YoY; 97% of our 2024F forecast).
Q4 results:
- Net revenue: VND1,053bn (USD41.4mn, -25% QoQ, -28% YoY).
- NPAT: VND231bn (USD9.1mn, -20% QoQ, -10% YoY).
Weak Q4 and 2024 net revenue was due to a reduction in discounts. In Q4 2024, BMP’s net revenue dropped 25% QoQ and 28% YoY, versus our expectation for seasonally high sales volume growth at the year-end as construction activities pick up. We attribute this sharp drop in the top line to a reduction in promotion programs during Q4, with total discounts – the sum of trade discounts (recorded in SG&A expenses) and payment discounts (recorded in financial expenses) – down 40% QoQ and 54% YoY. Overall, in 2024, net revenue declined 10% YoY as total discounts dropped 22% YoY, which we view positive as the decline in net revenue was smaller than the decline in discounts.
Margins remained strong in Q4 and 2024. In Q4, GPM edged down QoQ, despite average PVC input prices dropping 4% QoQ in Q4, which we attribute to weak sales volume pushing up the cost per unit in COGS. Nevertheless, quarterly GPM remained solid at 42.9% due to favorable input plastic prices, driven by sluggish construction demand from China. As a side note, 2024 total discount expenses were in line with our expectations, fulfilling 97% of our forecast, with higher-than-expected payment discount expenses offsetting lower-than-expected trade discount expenses.
We observe that BMP pursued a margin maximization strategy throughout 2024. Although BMP's GPM declined QoQ in Q4, NPM improved to 21.9% from 20.6%, driven by a significant reduction in discounts, with total discounts/sales dropping to 9.1% from 11.4%. This underscores BMP's margin-maximization strategy, as observed during Q2 and Q4, when the company minimized discounts to protect margins amid a weak market. Conversely, when necessary, BMP tatically offered short-term discounts, as seen in Q3, which were quickly absorbed by the market. This approach, coupled with favorable input prices, contributed to YoY expansion in GPM and NPM to 43.1% and 21.5%, respectively, despite a high base in 2023. We view BMP as a competitively positioned player with strong pricing power in the southern market, demonstrating flexibility in adjusting discount policies to optimize margins and earnings. This reaffirms our perspective on BMP as a strong defensive stock pick in the construction materials sector for 2025F.
Overall, as 2024 results were in line with our expectations, we currently foresee insignificant changes to our 2025F forecasts.
BMP’s 2024 results
| Q4 2023 | Q3 2024 | Q4 2024 | QoQ | YoY | 2023 | 2024 | YoY | 2024F | 2024A / 2024F |
Net revenue | 1,454 | 1,407 | 1,053 | -25% | -28% | 5,157 | 4,616 | -10% | 4,553 | 101% |
Gross profit | 591 | 606 | 452 | -25% | -23% | 2,116 | 1,989 | -6% | 1,987 | 100% |
SG&A expense | -261 | -200 | -156 | -22% | -40% | -783 | -676 | -14% | -673 | 100% |
Operating profit | 330 | 406 | 296 | -27% | -10% | 1,333 | 1,313 | -2% | 1,314 | 100% |
- Financial income | 29 | 20 | 23 | 12% | -23% | 119 | 79 | -34% | 80 | 98% |
- Financial expenses | -43 | -71 | -30 | -58% | -30% | -146 | -162 | 12% | -118 | 138% |
Net other income/loss | 3 | 8 | 2 | -77% | -31% | 1 | 11 | 10x | 1 | 11x |
EBT | 319 | 362 | 291 | -20% | -9% | 1,307 | 1,241 | -5% | 1,278 | 97% |
NPAT-MI | 257 | 290 | 231 | -20% | -10% | 1,041 | 991 | -5% | 1,022 | 97% |
SG&A breakdown |
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Total | 261 | 200 | 156 | -22% | -40% | 783 | 676 | -14% | 673 | 100% |
Trade discounts | 169 | 88 | 67 | -24% | -60% | 509 | 352 | -31% | 412 | 85% |
Normalized SG&A* | 92 | 112 | 88 | -21% | -4% | 274 | 324 | 18% | 261 | 124% |
Discounts |
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Total | 211 | 160 | 96 | -40% | -54% | 654 | 511 | -22% | 530 | 97% |
Trade discount (SG&A) | 169 | 88 | 67 | -24% | -60% | 509 | 352 | -31% | 412 | 85% |
Payment discount (Fin. Exp.) | 42 | 71 | 29 | -59% | -32% | 145 | 160 | 10% | 118 | 136% |
GPM | 40.6% | 43.1% | 42.9% |
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| 41.0% | 43.1% |
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SG&A/Sales | 17.9% | 14.2% | 14.8% |
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| 15.2% | 14.6% |
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Normalized SG&A/Sales | 6.3% | 8.0% | 8.4% |
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| 5.3% | 7.0% |
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Total discounts**/Sales | 14.5% | 11.4% | 9.1% |
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| 12.7% | 11.1% |
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OPM | 22.7% | 28.8% | 28.1% |
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| 25.9% | 28.4% |
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NPM | 17.7% | 20.6% | 21.9% |
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| 20.2% | 21.5% |
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Source: BMP, Vietcap. *Normalized SG&A is SG&A expenses excluding trade discount. **Total discounts equal the sum of trade discounts and payment discounts.
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