DHC - Narrowed price spread in Q4 2024 impacts profitability - Earnings Flash
  • 2025-02-03T00:00:00
  • Company Research
  • DHC released its 2024 results, with revenue up 10% YoY, while NPAT-MI declined by 22% YoY. These results fell short of our expectations, fulfilling 98% and 91% of our full-year forecasts, respectively, mainly due to weaker-than-expected price spread improvement in Q4 2024.
  • Q4 2024’s core GPM (excluding steel trading) softened to 11.2%, down from the 12.8% average in 9M 2024 (vs 17.5% in 2019-2023) and below our expectation for flat GPM. This was driven by a decline in paper prices amid stable OCC prices, compressing the price spread.
  • We estimate that paper prices fell to VND8,900/kg in Q4 2024 (-7% QoQ; +5% YoY). However, prices have rebounded in early 2025, reaching VND9,100/kg by the end of January.
  • In line with paper price trends, OCC prices have remained flat or edged up slightly by 3% per market. According to management, DHC began restocking low-cost OCC again in Q4 2024, which is expected to be utilized in Q1 2025.
  • Looking ahead, we expect earnings to improve, supported by a gradual price spread expansion and higher utilization at carton box factories.

DHC’s 2024 results

VND bn

Q4 2023

Q3 2024

Q4 2024

QoQ

YoY

2023

2024

YoY

2024A/2024F

2024F

Revenue

 816 

 896 

 873 

-3%

7%

 3,259 

 3,596 

10%

98%

 3,687 

Gross profit

 112 

 114 

 98 

-14%

-13%

 504 

 426 

-15%

91%

 468 

Operating profit

 84 

 76 

 59 

-23%

-31%

 359 

 274 

-24%

87%

 313 

PBT

 87 

 90 

 56 

-37%

-36%

 358 

 279 

-22%

92%

 303 

NPAT-MI

 75 

 77 

 49 

-36%

-35%

 309 

 242 

-22%

91%

 266 

GPM

13.8%

12.7%

11.2%

 

 

15.5%

11.8%

 

 

12.7%

SG&A/revenue

-3.4%

-4.2%

-4.5%

 

 

-4.3%

-4.2%

 

 

-4.2%

OPM

10.3%

8.5%

6.7%

 

 

11.0%

7.6%

 

 

8.5%

NPM

9.2%

8.6%

5.6%

 

 

9.5%

6.7%

 

 

7.2%

Source: DHC, Vietcap forecasts

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