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MSR – 2024 profit is expected to improve thanks to increasing selling prices

• Q3 2023, Masan High-Tech Materials Jsc. (UPCOM: MSR) recorded net sales of VND3,590 bn (or USD150 mn; +1.7% QoQ; +1.8% YoY). Net sales increased QoQ due to the growth of the Copper segment. NPAT–MI continued to be negative at VND-229 bn (or USD-10 mn) due to high costs pressure, however, higher than Q2 2023 NPAT–MI at VND-515 bn (or USD-21 mn) thanks to quarterly recovery in selling prices.
• Due to weak 1H2023 result, 9M2023 accumulated net sales and NPAT–MI reached VND10,905bn (or USD454 mn; -6.4% YoY) and VND-740bn (or USD-31 mn; VND262 bn or USD11 mn in 9M2022), respectively.
• Gross profit margin improved in Q3 2023, reaching 11.1% (+460 bps QoQ; -500 bps YoY) thanks to a quarterly recovery in selling prices. The SG&A expenses/sales ratio slightly decreased compared to Q2 2023, reaching 6.6% (-60 bps QoQ; -60 bps YoY) thanks to effective SG&A expenses management. As a result, the operating profit margin was improved, reaching 4.5% (+510 bps QoQ; -440 bps YoY).
• In 2024, we expect that MSR’s revenue will continue to increase because (1) Production volume will return to normal level as NPMC (Nui Phao Mining Company) will return to operate; and (2) Commodity prices (such as Copper, Bismuth, or ATP) will increase. The gross margin will continue to recover in 2024. Without recorded unusual expenses from the blasting interruption as in 2023, and the ability to utilize SG&A expenses, we expect that MSR will record 2024 positive net profit.