Viet Dragon Securities - Petrovietnam Fertilizer Chemical JSC (DPM) Analyst Pin-board DPM – Urea price will be the main factor that needs to be carefully considered

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Viet Dragon Securities

Son Tran

Analyst Pin-board DPM – Urea price will be the main factor that needs to be carefully considered

Revenue and NPAT-MI reached VND 2,824 bn (USD125.5 mn) (+44.4% YoY) and VND 630 bn (USD28 mn) (+145.1% YoY) respectively in Q3/2021 due to favorable movements of selling prices of urea products.
Urea's gross profit margin reached 44.0% in 3Q2021 compared to 36.0% in 2Q2021 and 28.4% in 3Q2020.
Urea price factor will need close attention to when DPM stock price has been led by a strong increase in urea price recently. In addition, the gas tariff is also an unknown factor as DPM has not fixed the gas price contract with PVGas for the FY 2021. GAS is temporarily charging DPM a tariff of 1.9 USD/MMBTU.
Business activities are expected to continue to be favorable in 4Q2021 following the increase in selling price of urea. So we believe that the stock price can reach to VND53,100 per share at the end of 2021 to factor the impressive 4Q result. However, the profit of 2022 is forecasted to decrease when there is no longer an abnormal profit and the urea price is unlikely to be as high as in 2021. So the investor should consider because the stock is likely to drop to price in the decreasing bottom line event in 2022.
DPM is being traded at 2021 PE forward of 6.2x and 2022 PE forward of 14.1x

24/11/2021 6 EN

Underlying

Petrovietnam Fertilizer & Chemical JSC

PetroVietnam Fertilizer and Chemicals Corp. PetroVietnam Fertilizer and Chemicals Corporation is a Vietnam-based manufacturer of agricultural chemicals. It manufactures and trades diversified fertilizer products, including urea fertilizers; nitrogenous phosphatic potassic (NPK) fertilizers, liquefied ammonia, as well as other industrial gases and chemicals used for oil and gas exploration and refinery. The Company is also involved in the provision of technical services in fertilizer and petrochemical production.

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VN000000DPM1 Hochiminh Stock Exchange Vietnam

Provider

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

Son Tran

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Analyst Pin-board DPM – Urea price will be the main factor that needs to be carefully considered

DPM – 3Q23 earnings results worse-than-expected

DPM – 2H23 earnings could be more positive regardless of unimpressive 1H23 business results

DPM – Lower earnings in 2023 but attractive cash dividend

CTG - Solid Growth Outlook as Provisioning Pressures Subside

BREAKING ABOVE 1,300 POINTS

Comparison of domestic natural gas and LNG fuel sources

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