DPR – Tree liquidation lift up 3Q2022 earnings, Land use conversion will be the main theme in the long term
- In Q3/2022, revenue was VND 340 billion or USD 14.2 million (+13% YoY), and NPAT-MI was VND 85 billion or USD 3.5 million (+25% YoY). Accumulated 9 months, revenue reached VND 841 billion or USD 35 million (+15.68%), and NPAT-MI reached VND 139 billion USD 5.8 million (+34.53% YoY).
- We believe that DPR can complete the revenue plan in 2022 as the main business segment does not have much fluctuation, however, the year's profit target is difficult to achieve as the land handover plan was not as expected. Accordingly, revenue and NPAT-MI in 2022 are estimated at VND 1,347 billion or USD 56.1 million (+11%YoY) and VND 472 billion or USD 19.7 million (+10%YoY), respectively.
- PDR plans to convert 4,000 hectares of rubber land to industrial or residential use. This plan is consistent with Binh Phuoc province's master plan for the period 2021-2025 and is feasible because (1) the DPR rubber land area is in a prime location adjacent to Binh Duong province's industrial capital, and (2) there is a convenient regional linkage. This is consistent with the provincial planning philosophy. (2) Clearing land for project implementation will be much easier than negotiating with numerous individual households.
- We continue to maintain a positive long-term outlook for PDR. When compared to the previous valuation, the target price has been reduced by 8.7% to 66,300 VND/share compared to the last valuation in the 2H2022 strategy report due to (1) the upward adjustment of the discount rate is more in line with the recent rapidly increasing interest rate trend, (2) delaying the handover of land to Binh Phuoc province, and (3) delaying the progress of Bac Dong Phu Expansion Industrial Park project to 2025. When combined with the expected cash dividend of 3,000 VND/share in the next 12 months, the total expected return is +35.5% (based on the closing price on 11/10/2022)
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.
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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