Analyst Pin-board LTG – Rice business: Expecting a strong growth in selling volume and a recovery in the gross margin
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· 1H2022 revenue of the rice business (also named LTA) of LTG had a high double-digit growth of + 44.5% YoY to VND3,445 bn. LTG explained that new global customers (e.g., European partners) and increasing rice demand from the Philippines in 1H2022 drove the strong growth of rice export quantity. · Despite the decrease of export rice prices, 1H2022 gross margin was 3.1%, +120 bps higher than that in 1H2021. According to LTG, they expanded their scale, thus enjoying the advantage of economies of scale resulting in a lower production cost per unit. · We believe that the 2022-2023 period will be an expansion one for the company. Both selling volume and prices will show an upward trend. Selling volume will grow based on 1) lower production from India; and 2) high import rice demand from the Philippines. |
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