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Viet Dragon Securities

Analyst Pin-board DPR – Outlook will be positive in 2H 2022

  • In the first 6 months, the rubber price still maintained its average of 2021. While output has not been much as the peak of harvesting season is expected to be in the 2nd half of the year. The rubber segment of Dong Phu will be stable because rubber prices are unlikely to return to the high level of 2021. This is due to the effect of China’s demand, which make up 70% of export sales, where is under strict lockdown (zero Covid policies) as the positive cases reversed to raise recently. Along with that, the production capacity dropped down significantly from 5,500 hectares to 4,800 hectares is also a driver to for DPR’s revenue drop in 2022.
  • Bac Dong Phu industrial park (IP) expect to be filled up fully in 2022. In addition, the leasing price increased (up to 72USD/m2) will be a bright outlook, helping the profit margin for this segment to widen.
  • The plan to extend areas in both North and South Dong Phu IPs have been included in the master plan of Binh Phuoc province, the expectancy to be approved on undertakings are highly likely after the firms finished the process of increasing charter’s capital for subsidiary companies following the law on real estate trading. However, we will not expect that this process could be fast.

In 2022, we estimate that the total revenue and net income of DPR will be VND 1,275 billion (+4,8%YoY) and VND 348 billion (-19.3% YoY) respectively. Correspondingly, EPS of 2022 will be VND 5,323. Based on the sum-of-the-parts valuation (SOTP), target price is expected to be 85,7000/share. Combined with cash dividend expected in the next 12 months of 3,000/share, expect the rate of return will be +33.8% (compared to the closing price of 07/12/2021)

13/07/2022 5 EN
Underlying
Dong Phu Rubber JSC
Dong Phu Rubber JSC

Dong Phu Rubber Joint Stock Company (DORUCO) is a Vietnam-based company engaged in the manufacturing of rubber products. The Company operates and manages six rubber plantations, as well as processes natural latex into rubber products for mechanical usage. DORUCO is also involved in forestation, farm operations, agricultural product processing, as well as the construction of manufacturing buildings and infrastructures. As of December 31, 2012, the Company was a 55.81%-owned subsidiary of Vietnam Rubber Industry Group, and it had three subsidiaries and two affiliates, along with six rubber plantations, two enterprises, one latex processing factory and one medical center.

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VN000000DPR0 Hochiminh Stock Exchange Vietnam
Provider
Viet Dragon Securities
Viet Dragon Securities

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