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FMC – Q3/2024 revenue hits record high but NPAT-MI is under- expectations

• Q3-2024: Revenue reached VND 2,845 billion (or USD 113 mn; +59% YoY) as a 41% YoY increase in shrimp volume and a 14% YoY estimated rise in shrimp selling prices in VND. Shrimp prices in VND rose 6% QoQ, but the gross margin fell short of our forecast, reaching 10.8% (down from 11.3% in Q2/2024). Selling expenses surged by 150% YoY due to a threefold increase in transportation costs, reducing NPAT-MI to VND 80 billion (or 3,2 mn; -1% YoY).
• For 2024, we have raised our revenue projection to VND 7,279 billion (or USD 291 mn,+43.1% YoY) with a 29% YoY volume increase and a 12% YoY price increase. However, we have revised down our NPAT-MI projection to VND 280 billion (or USD 11.2 mn, +1.3% YoY) from VND 342 billion due to a 37% increase in selling expenses over the previous forecast. Adjusted 2024 EPS after the welfare fund allocation is VND 4,235 (+1.3% YoY).
• We find FMC not particularly attractive in the short term as it is currently trading at an adjusted 2024 forward P/E of 10.9x, which is higher than the 5-year average of 7.5x from 2018-2023. We will update our long-term projections for this stock in an upcoming report.