FMC – The significant increase In JPY/VND exchange rate supports strong growth In 2H2024
• Q2-2024: Revenue reached VND 1,243 billion (+20% YoY) as a 21% increase in shrimp sales, with a 22% YoY rise in volume, while the average shrimp selling price in VND decreased by 1% YoY. Gross margin improved significantly, exceeding our projections, with a + 4.7 pps YoY due to a substantial rise in self-sufficiency, as self-farmed shrimp output increased with the harvest from 200 hectares of newly developed farming areas (bringing the total farming area to 525 hectares) in Q1/2024. However, the absence of anti-dumping duty refunds and the recognition of provisions for countervailing duties led to higher selling expenses. Consequently, NPAT-MI slightly decreased by 7% YoY, reaching VND 66 billion.• For the second half of 2024, we anticipate strong revenue growth driven by a 12% YoY increase in shrimp volume and a gradual recovery in selling prices, supported by the rising JPY/VND exchange rate. As a result, we revise our full-year 2024 revenue forecast upward to VND 6,435 billion (+26% YoY) and increase the gross margin from 10.1% to 11% due to higher selling prices in VND. Consequently, we project NPAT-MI to rise to VND 342 billion (+24% YoY). Adjusted 2024 EPS, after welfare fund adjustments, is expected to reach VND 5,185 (+22.84% YoY).
• We increase our 12-month target price by 6% from VND 52,600 per share to VND 55,800 per share, representing a 2024 forward P/E of 10.8x and a potential return of 18% compared to the closing price on August 8, 2024. We recommend ACCUMULATE for this stock.
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