Analyst Pin-board VHC - Profitability in FY21 to face cost headwinds
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· We expect that FY21 revenue will grow by 28% YoY on the back of FY20 low base thanks to the recovery of export volume in major export markets and higher revenue contribution of collagen & gelatin segment. However, high raw materials prices and logistics costs will erode profit. · FY2021 estimated revenue and NPAT to achieve VND 9,014 Bn (or USD 392 Mn, +28% YoY) and VND 634 Bn (or USD 28 Mn, -9% YoY) respectively, completing 105% revenue target and 91% NPAT target. · VHC plans to implement large projects to reduce costs and expand product portfolio in the long run. However, those projects are in the building and testing phase and will not bring revenue to VHC in FY21. We are going to reflect the effects of the new projects on our stock valuation in the upcoming reports. · We maintain a target price of VND 46,200/share. With an expected cash dividend in the next 12 months of VND 1,000/share, the total return will reach 17% based on the closing price of May 21, 2021. We recommend to ACCUMULATE |
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