DPR – The value from land conversion requires more time for validation.
- DPR's revenue reached VND 612 billion (-27% YoY) while NPAT-MI reached VND121 billion (-31% YoY). The main reason is that rubber prices have not yet recovered as expected and the progress of collecting compensation from Tien Hung 1 and Tien Hung 2 projects has not met expectations.
- For the entire year of 2023, we estimate the revenue to be VND 1,030 billion (USD 42 million, -15% YoY) and the net income for the parent company's shareholders to be VND 174 billion (USD 7 million, -30% YoY), with an EPS of VND 1,999. Accordingly, the revenue and net income for Q4 are projected to be VND 419 billion (USD 17 million, +10% YoY) and VND 53 billion (USD 2 million, flat YoY). This forecast is based on the rubber segment's continued quarterly recovery, with an estimated increase in the average selling price from the current VND 33.5 million per ton to VND 34.5 million per ton and pending compensation payments from KDC Tien Hung 2.
- In the next 2-3 years, the two industrial park projects Bac Dong Phu expansion, Nam Dong Phu expansion and 300 hectares that the province will reclaim to bid for residential development will be the first pieces of land to be converted land use purpose. It is expected to bring compensation cash flow to DPR. However, the timeline that the project can be implemented still depends on many different factors.
- Based on the Sum-of-the-Parts (SOTP) method, the target price after the stock dividend is VND 29,100 per share. Combined with the anticipated cash dividend of VND 1,500 per share over the next 12 months, the total expected return is -0.3% (based on the closing price as of November 21, 2023). This equates to a HOLD recommendation for long-term investment purposes
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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