PHR – Core businesses are expected to be flat in 2023
- PHR's 4Q2022 revenue reached VND 577 billion (-3% YoY), and NPAT skyrocketed to VND 528 billion (+168% YoY). For FY2022. Revenue was VND 1,710 billion, down 12% YoY, while NPAT climbed 85% YoY to VND 881 billion. Earnings growth was mainly driven by abnormal income from the VSIP3 deal.
- Compensation income from the VSIP 3 deal will continue to be PHR's profit fulcrum in 2023 in the context that (1) the rubber business is expected to have a slight improvement as the impact of China's reopening is slower than expected. which may cause rubber prices to recover later this year. In addition, input costs are expected to cool down this year as commodity prices have plunged, which will help PHR improve gross profit margin. (2) The wood processing segment has not yet shown signs of recovery. (3) the industrial park business is expected to be flat when PHR only records a leased area equivalent to 2022. Accordingly, revenue is estimated at VND 1,749 billion (+2.4% YoY) and NPAT is estimated at VND 528 billion (- 40.4% YoY). 2023 EPS is expected to be VND 3,899.
- Target price was adjusted down by 34.7% to VND 41,000/share due to temporarily eliminate IP projects including Tan Lap 1 and Tan Binh Expansion as they have yet to be approved and related issues to Binh Duong 2021-2025 master plan. Combined with an annual cash dividend of VND4,000/share, the total expected return is +10.7% (based on the closing price as of March 07th, 2022).
Phuoc Hoa Rubber Joint Stock Company is a Vietnam-based company active in the rubber industry. The Company is engaged in rubber plantations and the manufacturing of rubber products. It processes latex and manufactures basic rubber products, such as Standard Vietnamese Rubber (SVR) products. The Company is also involved in the processing and trading of rubber wood harvested from its rubber plantations. In addition, it is engaged in the operation of gasoline stations. Other activities include construction and real estate operations.
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