Analyst Pin-board DRC – NPAT to accelerate in 2022
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· We use our valuation mix of 50%:50% for DCF/PER to evaluate the stock. Our fair value comes at VND 37,000 per share, implying a 2022 PER of 10.4x. We recommend BUYING with a total stock return of 34% and a cash dividend yield of 6%. · In 2022, we estimate DRC to reach VND 4,884 Bn (USD 211 Mn, +12% YoY) in revenue and VND 372 Bn (USD 16 Mn, +28% YoY) in NPAT. NPAT acceleration in 2022 will be driven by revenue growth, widening gross margin and SG&A expense ratio decrease. · We estimate radial tire segment’s revenue at VND 2,899 Bn (USD 125 Mn, +18% YoY), led by volume increase of 17% YoY as we expect radial tire factory will run stably at 744 thousand tires/year in 2022 versus avg 600 thousand tires/year in 2021. · Bias tire revenue will reach VND 1,237 Bn (USD 54 Mn, +7% YoY) as the demand from the US is expected to help the output of bias tire grow slightly in the coming years despite the gradually decreasing demand for bias tire in other markets due to price competitiveness and the trend of radialization. |
Danang Rubber Joint Stock Company is a Vietnam-based company engaged in the rubber processing sector. It manufactures, trades, imports and exports rubber tires, inner tubes and other deprived products for automobiles, motorbikes and bicycles. It also manufactures other rubber products for mechanical uses, as well as trades materials and supplies for the rubber industry. The Company is involved in the offering of installation services of machinery and equipment for rubber processing activities.
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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