BFC – Positive signals for 3Q 2023 business results
- In 2Q 2023, BFC achieved a net revenue of VND 2,335 bn (USD 98.5 mn, +29% YoY) and an NPAT MI of VND 53 bn (USD 2.2 mn, YoY flat), owing mostly to an improvement in sales volume due to decreased selling prices.
- After posting a low gross margin of 6.2% in 1Q 2023 due to the high-price inventory while NPK prices were falling, the gross margin bounced back to 11.2% in 2Q 2023 (2Q 2022: 11.6%) as the burden on raw material expenditures eased.
- We forecast that BFC can achieve VND 7,732 bn revenue (USD 329 mn, -9.9% YoY) and VND 111 bn NPAT MI (USD 4.7 mn, -21.1% YoY), respectively with the main assumption (1) sales volume of 577 thousand tons, (2) ASP of VND 13,600/kg, (3) gross margin of 10.2%. The correspondent EPS is VND 1,752.
- The 2023 forward PER will be 10.6x, which is not attractive in our opinion. As 2023 plan, the company will pay VND 1,500 cash dividend, representing an 8% dividend yield/year at the current market price. As a cash dividend player and no upcoming projects, we are NEUTRAL with a target price of VND 19,200/share.
Binh Dien Fertilizer Jsc. Binh Dien Fertilizer Joint Stock Company (BFC) is a Vietnam-based company, which is mainly engaged in the manufacture and commerce of agricultural chemicals. The Company's leading products are various types of nitrogen-phosphorus-potassium (NPK) fertilizers under the brand name of Dau Trau, as well as other chemicals and farm supplies. The Company's products are not only distributed within Vietnam, but also exported to foreign markets, such as Cambodia, Myanmar and Laos. Other regular undertakings of the Company include the trading of industrial machinery and equipment for fertilizer manufacturing activities, together with the leasing of warehouses. Via its subsidiary, the Company also partakes in the provision of marketing consulting services.
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