- GVR posted strong Q2 2021 results with revenue climbing 72% YoY to VND5.7tn (USD245mn) and NPAT-MI surging 86% YoY to VND846bn (USD36mn). Similar to Q1 2021, GVR’s Q2 2021 results continued to be mainly driven by the natural rubber and wood segments.
- GVR’s top-line growth in Q2 2021 was mainly driven by the upbeat natural rubber and wood segments, which posted revenue increases of 90% YoY and 69% YoY, respectively. These two segments accounted for 92% of GVR’s total revenue in Q2 2021.
- In H1 2021, GVR’s revenue was up 77% YoY to VND10.5tn (USD454mn) while its NPAT-MI surged 165% YoY to VND1.7tn (USD72mn). The top line was mainly driven by the natural rubber and wood segments; however, we believe the natural rubber segment contributed more to the bottom line.
- GVR’s natural rubber segment posted a GPM expansion of 14 ppts YoY in H1 2021, which we believe was thanks to its upbeat YoY growth in average selling price (ASP). Meanwhile, the wood segment’s GPM contracted by 2 ppts during the same period.
- In H1 2021, GVR’s revenue and NPAT-MI completed 43% and 36% of our full-year forecasts, respectively. H1 results contributed 16%-26% to GVR’s full-year NPAT-MI in 2018-2020 as Q4 is normally a high season for natural rubber exports as well as divestment finalization.  
- Nevertheless, ongoing the COVID-19 situation in Vietnam could hinder the strong volume growth momentum due to a lack of workers for natural rubber tapping. We therefore do not anticipate significant upside risk to our 2021 forecasts for GVR, pending a fuller review.

The natural rubber segment continued to post upbeat results. In H1 2021, GVR’s natural rubber revenue (including rubber latex and products) was up 100% YoY to VND7.7tn (USD332mn). We believe the upbeat growth in natural rubber revenue was driven by both volume and ASP increases. Additionally, GVR’s natural rubber segment posted a GPM expansion of around 14 ppts YoY to 30.5% in H1 2021 (vs GPM of 16.5% in H1 2020). Nevertheless, natural rubber prices have cooled since mid-June — which coupled with the ongoing COVID-19 situation in Vietnam — could hinder the strong volume growth momentum of GVR’s natural rubber segment in future quarters.

We expect financial income and net other income to be skewed toward H2 2021. Financial income and net other income in H1 2021 achieved only 21% and 23% of our full-year forecasts, respectively. We believe this follows the normal course of GVR’s businesses as the company normally recognizes divestments and asset disposal gains in H2. 

Net income from affiliates was mainly driven by a medium-density fiberboard (MDF) wood manufacturing affiliate. In H1 2021, GVR’s net income from affiliates was up 12% to VND201bn (USD8.7mn) and was mainly driven by MDF VRG - Dongwha Joint Stock Company (JSC). This affiliate contributed 98% to GVR’s net income from affiliates in H1 2021 after GVR’s stake sale in its other major affiliate, Saigon VRG Investment JSC (UPCoM: SIP), in 2020.