STK – Aggressive 2025 guidance driven by Unitex’s new capacity and increasing recycled yarn mix

We attended STK’s FY2025 AGM held on March 28, 2025. Our key takeaways as follows:

1. 2025 guidance

Revenue: VND3.3tn (+270% YoY; 1.6x our 2025 forecast)
NPAT: VND310bn (25x YoY; 3.6x our 2025 forecast)
Volume: 60.5kt p.a (2.6x YoY; 1.6x our 2025 forecast) - with an expected breakdown of 35%/65% from Unitex/current plants and 55%/45% from recycled/virgin yarns.

2. Q1 2025 preliminary results

Revenue: VND380bn (+14% QoQ; +43% YoY; 18% of our 2025 forecast)
GPM: 20+%. Per STK, in Q1 2025 the company recorded an average monthly gross profit 30-40% higher than Q4 2024.
Volume: mid-high-teen QoQ growth.

3. Stock dividends and Issuance plan for financial years:

2023: Cancel stock dividend at 100:15 ratio (15 new shares for every 100 existing shares) that approved at the AGM 2024.
2024:

+ Private placement: 13.5 million at minimum price at VND27,500/share, expected payment date in Q2 2025. Following the private placement, STK’s share capital will increase 14% to VND1.1tn from VND966bn.

+ Stock dividend at 100:45 ratio (45 new share for every 100 existing shares). Following stock dividend, share capital will increase 45% to VND1.6tn from VND1.1tn.

4. Other management comments

Unitex:

+ The plant is currently in the trial run phase and undergoing fire safety approval procedures before commencing operations, expected in Q2 2025.

+ Expected utilization rate in 2025/26/27: 60%/75%/85%.

+ Unitex will add 36,000 tonnes p.a. to STK’s current capacity of 63,000 tonnes p.a. Unitex is more automated and can produce more diversified products vs existing factories.

Market demand: Brands are currently accumulating inventory amid improving demand trends across key markets. Management expects a further uplift driven by the 2026 FIFA World Cup, as brands are likely to place yarn orders in Q2–Q3 2025 to ensure timely production, which should support STK’s order flow.
Brand customer FY2024 revenue growth guidance (from brands):

+ Nike: 1-5%;

+ Adidas: 10%;

+ Puma: 5-7%;

+ Lululemon: 8-9%;

+ Uniqlo: 10%.

The automatic quality control system has been temporarily shut down. STK is using manual quality control. Management plans to engage an international contractor for a future relaunch, aiming to enhance operational efficiency and ensure consistent quality.