- 2025-04-25T00:00:00
- Company Research
- STK reported Q1 2025 revenue of VND376bn (+42% YoY; 18% of our full-year forecast) and NPAT-MI of VND36bn (5x YoY; 41% of our full-year forecast). We note that in Q1 2024, STK reported NPAT-MI of only VND1.0bn.
- Revenue was broadly in line with our expectations for a gradual sales volume recovery throughout 2025. Additionally, NPAT-MI outperformance was driven by a faster-than-expected recovery in recycled yarn, contributing 50% to the Q1 product mix (vs 34% in 2024, already completing our full-year assumption).
- Notably, recycled yarn’s GPM hit a record high of 35.1% (+10.6 ppts YoY, +5.4 ppts QoQ; vs 19.0% of our full-year forecast), supported by an improving price spread. As a result, blended GPM improved to 20.8% (+8.6 ppts YoY, +2.1 ppts QoQ; vs 12.4% of our full-year forecast).
- Sales volume reached 7,150 tonnes (+13% QoQ, +35% YoY), underpinned by improving demand. The company has resolved prior production bottlenecks by temporarily shutting down its automatic quality control system, replacing it with manual quality checks. Management plans to engage an international contractor for a future relaunch, aiming to enhance operational efficiency and ensure consistent quality.
- Amid the tariff situation, STK has observed frontloading behavior from US buyers in Q2 2024, urging the company to expedite production within a 90-day window to capitalize on the temporary tariff suspension under President Donald Trump's tariff policy. We expect Q2 results to be strong, driven by accelerated orders. However, we also flag downside risks if US tariffs are reinstated earlier or at higher levels than anticipated.
- In Q1 2025, SG&A/sales were 4.3%, increased 45 bps QoQ from Q4 2024’s record low, still well below the 5Y average of 5.0% and our 5.1% projection. We attribute this to easing shipping costs and better cost management.
- In Q1 2025, STK recorded FX losses of VND17.4bn (+35% YoY; 50% of our full-year forecast) due to a 2.2% appreciation in the USD/VND rate. This was partly offset by FX gains of VND10bn (3x YoY; 32% of our full-year forecast). The principal balance was reduced to USD42mn in Q1 2025 from USD45mn to 2024YE.
- Private placement: STK has received approval for its private placement plan to issue 13.5 million shares at a minimum price of VND27,500/share. Management expects the payment date to be in Q2 2025. Following the private placement, STK’s share capital will increase 14% to VND1.1tn from VND966bn.
- Overall, we see upside potential to our forecast. Nevertheless, we acknowledge the risks stemming from potentially higher-than-expected US tariffs, pending a fuller review.
STK’s Q1 2025 results
VND bn | Q1 2024 | Q4 2024 | Q1 2025 | QoQ | YoY | Q1 2025 as % of 2025F | 2025F |
Sales volume (tonnes)* | 5,315 | 6,324 | 7,150 | 13% | 35% | 19% | 37,578 |
Revenue | 266 | 334 | 376 | 13% | 42% | 18% | 2,078 |
Virgin yarn | 159 | 175 | 188 | 8% | 18% | 23% | 828 |
Recycled yarn | 107 | 159 | 190 | 19% | 78% | 15% | 1,251 |
Gross profit | 32 | 62 | 78 | 25% | 142% | 30% | 257 |
Virgin yarn | 6 | 15 | 17 | 9% | 165% | 89% | 19 |
Recycled yarn | 26 | 47 | 67 | 41% | 155% | 28% | 238 |
Selling expenses | -6 | -3 | -2 | -11% | -61% | 6% | -38 |
G&A expenses | -14 | -10 | -14 | 35% | 0% | 21% | -68 |
EBIT | 13 | 49 | 62 | 25% | 390% | 41% | 151 |
Financial income | 6 | -13 | 11 | -185% | 76% | 33% | 33 |
Financial expenses | -18 | -12 | -24 | 95% | 37% | 26% | -95 |
Other non-ops | 0 | 0 | 0 | N.M | N.M | N.M | 0 |
PBT | 1 | 24 | 49 | 100% | 4150% | 54% | 90 |
NPAT-MI | 1 | 19 | 36 | 89% | 4905% | 41% | 86 |
Margins |
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Blended GPM | 12.2% | 18.7% | 20.8% |
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| 12.4% |
Virgin yarn GPM | 3.9% | 8.7% | 8.8% |
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| 2.2% |
Recycled yarn GPM | 24.5% | 29.7% | 35.1% |
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| 19.0% |
SG&A/sales | 7.4% | 3.9% | 4.3% |
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| 5.1% |
EBIT margin | 4.8% | 14.8% | 16.5% |
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| 7.3% |
EBITDA margin | 6.5% | 60.9% | 22.7% |
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| 16.4% |
NPAT-MI margin | 0.3% | 5.6% | 9.5% |
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| 4.1% |
Source: STK, Vietcap
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