Plastic material – Remain advantage from low-cost raw materials
• For 9M24, companies have not recorded revenue growth, as demand for construction plastic products has not recovered significantly; with revenue of BMP and NTP reaching VND 3.6 trillion (-3% YoY) and VND 3.8 trillion (equivalent to the same period in 2023), respectively. However, there is a bright spot in that the profit margins to improve compared to 2023, when PVC resin prices decreased to USD 790/ton (-9% YoY), due to: 1/ Oversupply of plastic raw materials in the Chinese market; 2/ Demand for construction materials has not fully recovered. Gross profit margins (GPM) of BMP and NTP in 9M24 reached 43% (vs. 41% in 2023) and 30.5% (vs. 30% in 2023), respectively, remaining at the highest level in the 2020-2024 period.• For Q4/2024, the peak period of domestic construction, we expect output to recover slightly (compared to Q3/24 and to the same period in 2023), when the residential real estate market shows signs of recovery. In terms of raw materials (PVC resins), demand has not yet recovered significantly, thereby we expect raw material prices to fluctuate within a narrow range of USD790/ton (equivalent to Q3/2024).
• For the company in the coverage list - BMP, we expect Q4 sales volume to reach 25 thousand tons (up 2% YoY), corresponding to estimated revenue of VND 1,468 billion (equivalent to Q4/2023). GPM margin remains at 43% (equivalent to Q3/24, based on PVC price scenario), with SG&A expense/revenue ratio to reach 15% (when BMP maintains discount policy with agents to maintain market share), we estimate BMP's Q4/24 net profit to reach VND 282 billion (+13% YoY). For the whole year of 2024, BMP's NPAT can reach VND 1,042 billion (equivalent to 2023 and completing the company's business plan).
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