QNS – Continue to benefit from high sugar prices in the first half of 2024
- In 4M2024, the local sugar trading prices have been maintained at a high level compared to the same period last year, which is the main growth driver for both sales and profits of QNS.
- For 2024, the forecast revenue and net profit to reach VND 11,194 billion (+12% YoY) and VND 2,194 billion (+0% YoY), respectively in 2024. The equivalent EPS is VND 7,134.
- Using SoTP method, we raise QNS's target price to VND 55,800 from VND 54,000, based on the adjustment to increase net profit to VND 2,194 billion (+0% YoY) from VND 2,062 billion (-7% YoY). New/old EPS equivalent is 7,132/6,506 VND. The main reason is that we adjusted the forecast for soymilk segment revenue in 2024 to VND 4,217 billion (+5% YoY) from VND 4,068 billion (-5% YoY) of the previous forecast.
- Compared to the stock market price on May 30th 2024, the expected stock price return is calculated at +13%. Based on the expectation that (1) the sugar prices might increase in Jun 2024 before slowing down in 2H2024; (2) 2024 outlook of QNS; and (3) attractive dividend policy (VND4,000/share), we recommend that the investors who follow the arbitrage strategy can execute short-term trading on QNS shares collerating with sugar price movements, while investors who prefer stable dividend can ACCUMULATE QNS shares.
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