Analyst Pin-board TCM – 5M2021 Update: Surging Costs Eat Into Profit
- 5M2021 revenue and PAT came at USD 67.5 mn (+19% YoY) and USD 1 mn (+37% YoY). Net margin has kept the downward trend from the beginning of the year, from 7% in Jan to 5.2% in May. Surging garment material costs and transportation costs are the causes.
- The completion rate of 2021 plan is currently 38% in revenue and 33% in PAT. Thereby, it is higly possible that TCM will not achieve its 2021 guidance.
- We forecast 2021 revenue and PAT at VND 4,185 bn (~USD 182 mn, +20.6% YoY) and VND 192 bn (~USD 8.3 mn, -30.3% YoY). The stock is trading at PER 21.5x, far higher than its average PER 7.7x of the 2016-2019 period. Given PER forward of 2021 and 2022 are 35.9x and 20.7x and CAGR of revenue and PAT of 2020-2025 are 8.3% and 11.2%, the stock is overvalued. Thereby, we recommend to OBSERVE
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