- 2024-10-25T00:00:00
- Company Research
- VHC announced its 9M 2024 results with revenue of VND9.3tn (USD373mn; +22% YoY) and NPAT-MI of VND808bn (USD32mn; -5% YoY), fulfilling 77% and 62% of our respective full-year forecasts. Revenue was slightly ahead of our projection while earnings trailed our forecast due to continued weak selling prices in Q3 2024. We see potential downside risk to our forecasts, pending a more comprehensive review.
- In 9M 2024, VHC’s revenue was led by a 15% YoY increase in sales of frozen pangasius filets and related products (e.g., breaded fish, fish fat, fish meal and feed) together with a 25% YoY growth in sales of collagen and gelatin (C&G) and a 75% YoY jump in rice (Sa Giang) products. In 9M 2024, VHC’s sales experienced positive growth across key markets, including in the US (+23% YoY), Europe (+17% YoY), and other countries (+40% YoY). On the contrary, sales growth in China decreased 3% YoY, which we mainly attribute to the country’s low consumer confidence in Q2-Q3 2024.
- Per our estimate, in 9M 2024, GPM before inventory provisions decreased by 1.1 ppts YoY to 14.9% vs 16.0% in 9M 2023. This is primarily due to VHC’s pangasius filets maintaining an ASP of USD2.8/kg (-15% YoY), attributed to cautious global consumer spending in 9M 2024. We note that between quarters, VHC typically recognizes inventory provisions and reversals of those provisions, which could complicate the interpretation of GPM movement in relation to selling prices and input costs.
- In Q3 2024, VHC's gross profit and NPAT-MI surged 68%, fueled by a 7.1 percentage point YoY increase in GPM, strong volume growth, and lower feed costs compared to the previous year. However, net margin expanded 2.7 ppts YoY, slower than GPM expansion, which we attribute to the fluctuation in exchange rates that resulted in a net financial loss of VND25bn in Q3 2024 vs VND70bn of financial gain in Q3 2023.
VHC’s Q3 and 9M 2024 results
VND bn | Q3 2024 | YoY | QoQ | 9M 2023 | 9M 2024 | YoY | 9M as % of 2024F |
Net revenue | 3,278 | 22% | 3% | 7,643 | 9,329 | 22% | 77% |
*By market |
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- US | 1,145 | 54% | 9% | 2,377 | 2,917 | 23% |
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- Europe | 502 | 13% | -7% | 1,356 | 1,592 | 17% |
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- China & Hong Kong | 292 | -29% | -3% | 964 | 931 | -3% |
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- Others | 642 | 94% | -22% | 903 | 1,261 | 40% |
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- Vietnam | 848 | 21% | -9% | 1,956 | 2,582 | 32% |
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*By product |
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- Collagen & gelatin | 173 | 9% | -21% | 506 | 630 | 25% |
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- Frozen filets & others | 2,880 | 16% | -5% | 7,044 | 8,120 | 15% |
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- Rice products | 168 | 60% | -11% | 304 | 533 | 75% |
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Gross profit | 579 | 103% | 25% | 1,249 | 1,314 | 5% | 68% |
SG&A | -161 | 20% | 14% | -369 | -437 | 18% | 78% |
EBIT | 418 | 178% | 30% | 880 | 877 | 0% | 65% |
PBT | 402 | 75% | 2% | 1,009 | 1,016 | 1% | 65% |
NPAT-MI | 321 | 68% | 2% | 849 | 808 | -5% | 62% |
Gross margin | 17.7% |
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| 16.3% | 14.1% |
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SG&A/sales | 4.9% |
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| 4.8% | 4.7% |
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EBIT margin | 12.7% |
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| 11.5% | 9.4% |
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NPAT-MI margin | 9.8% |
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| 11.1% | 8.7% |
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Source: VHC, Vietcap’s forecast (*Revenue breakdowns by market and product are based on VHC’s preliminary results, of which the total revenue figure is slightly different from the official number)
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