VHC - Selling prices persistently decline into Q4, negatively impacting 2023 earnings - Earnings Flash
  • 2024-01-23T00:00:00
  • Company Research
  • VHC announced 2023 results with revenue of VND10.0tn (USD415mn; -24% YoY) and NPAT-MI of VND897bn (USD37mn; -55% YoY), fulfilling 94% and 78% of our respective full-year forecasts. As the results trailed our projections, we see a downside risk to our forecasts, pending a more comprehensive review. 
  • We mainly attribute the subdued 2023 results to the destocking of global buyers in early 2023 and the delay of orders in the year due to concerns over economic instability across markets. This hurts sales volume which decreased 15% YoY in 2023.
  • In Q4 2023, VHC’s revenue decreased 3% YoY which is mainly due to a 28% YoY plunge in export prices that was partially offset by 25% YoY higher volume, per our estimates. Meanwhile, NPAT-MI plummeted 75% YoY amid an 11 ppts compression in GPM that was chiefly due to lower selling prices, in our view.
  • Meanwhile, VHC’s export volume/prices decreased 8%/12% QoQ in Q4 2023 (per our estimates), which is discouraging vs the 9% QoQ increase in Q3 and considering the arrival of the holiday seasons in Q4 (Christmas and Lunar New Year). 

VHC’s Q4 and 2023 results

VND bn

Q4 2022

Q4 2023

YoY

QoQ

2022

2023

YoY

2023as % of 2023F

Net revenue

2,475

2,396

-3%

-11%

13,464

10,039

-24%

94%

  • Fillet volume growth*

 

 

25%

-8%

 

 

-15%

 

  • Fillet ASP growth*

 

 

-28%

-12%

 

 

-26%

 

Gross profit

476

195

-59%

-31%

2,976

1,445

-51%

86%

SG&A expenses

-222

-148

-33%

10%

-721

-517

-28%

102%

Operating profit

254

47

-82%

-69%

2,254

928

-59%

79%

Financial income

93

74

-20%

-36%

434

371

-15%

88%

Financial expenses

-110

-37

-66%

-18%

-370

-222

-40%

85%

Net other income/(loss)

0

15

N.M.

81%

4

31

8x

N.M.

PBT

236

99

-58%

-57%

2,323

1,108

-52%

83%

NPAT-MI

188

48

-75%

-75%

1,975

897

-55%

78%

Gross margin

19.1%

8.1%

 

 

22.1%

14.3%

 

 

SG&A expenses/revenue

8.9%

6.2%

 

 

5.4%

5.1%

 

 

EBIT margin

10.2%

2.0%

 

 

16.7%

9.2%

 

 

NPAT-MI margin

8.0%

2.8%

 

 

15.0%

9.4%

 

 

Source: VHC, Vietcap’s forecast (*Vietcap’s estimate from Agromonitor data)

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