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Analyst Pin-board: STK – 3Q22 earnings results worse-than-expected; FX losses hurt bottom line

  • 3Q22 net revenue was VND 515 bn/ USD 20.7 mn (-3% QoQ, +10% YoY compared to 3Q21 low base). NPAT-MI just came at VND 50 bn/ USD 2 mn (-28%QoQ, -18%YoY), missing expectations, due to FX losses and direct customers’ weakening orders. Overall, STK has completed 65% of its net sales & NPAT targets for FY22.
  • For 4Q22, we forecast net revenue and NPAT-MI of VND 520 bn/ USD 20.9 mn (+1%QoQ, -19% YoY) and VND 57 bn/ USD 2.3 mn (+14% QoQ, -25% YoY), respectively, as orders momentum decelerate, and a weak VND.  For FY22, we expect STK’s net revenue and NPAT-MI to be VND 2,205 bn/ USD 90 mn (+8% YoY) and VND 252 bn/USD 10 mn (-9% YoY), respectively. The correspondent EPS is VND 3,086.
  • We maintain a BUY recommendation with 8% lower one-year target price of VND 38,500/share (from VND 41,600/share). The lower TP is primarily driven by downward earning revisions. With an expected cash dividend of VND1,000/share in the next 12 months, this implies a total return of 27%, based on the closing price of Oct 24th, 2022

 

Underlying
Century Synthetic Fiber

Century Synthetic Fiber Corporation (STK) is a Vietnam-based company operating in the textile industry. The Company is mainly engaged in the manufacture and commerce of synthetic yarns, with major products as draw textured yarns (DTY) and fully drawn yarns (FDY) made from polyester chips. The Company does not only distribute its products to local textile firms, but also supplied them to overseas clothing companies, such as Nike, Adidas, Uniqlo, Columbus and Guess, among others.

Provider
Viet Dragon Securities
Viet Dragon Securities

Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.

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Analysts
Hoai Trinh

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