Analyst Pin-board DGC – Higher selling price and gross margin improvement bring growth in 2021
- DGC is known as a leader in the chemical industry in Vietnam with its main product - yellow phosphorus (P4) - widely used in the production of semiconductors and DAP fertilizers.
- DGC has been producing higher added value products, derived from P4, to improve its profit margin.
- Khai Truong 25 mine has come into operation since the end of 1Q2021, ensuring 30% of apatite ore demand for phosphorus production. Self-supply will help gross margin improve from 3Q2021 onwards.
- Nghi Son project as well as real estate project will be the growth engine from 2023.
- Recent rising price of yellow phosphorus is likely to support the 2Q2021 earnings of DGC. Revenue and net profit in 2Q2021 are estimated at VND2,181bn and VND320bn to VND330bn respectively
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