Rubber prices – supply shortage creates a driving force for price anchoring in the medium term
• In early October, rubber prices continued to increase and peaked after 13 years and reached VND73.6 million /ton (RSS3) (+96.7%YoY, +10.3%MoM). The main reason comes from supply shortages in key manufacturing regions in Southeast Asia. We believe that the trend of world rubber prices is expected to remain at a high level when the supply is forecasted to remain in short supply; the shortage is forecast to extend to 1H2025.• For the Vietnamese market, output in 2024 is forecast to decrease only slightly by 3.5% because rubber-growing areas are less directly affected by the storm. Rubber prices are expected to continue to be anchored at a high level (over $1,600/ton) and react to the supply and demand situation of the world rubber industry.
• We believe that DPR and PHR's core business segments are expected to benefit. In which, PHR's revenue and profit after profit in 3Q2024 were VND 497 billion and VND 120 billion, respectively, with revenue from rubber reaching VND 484 billion (+88%YoY). DPR's revenue and profit after tax in 3Q2024 are estimated at VND 358 billion and VND 60 billion, revenue from the rubber segment contributed VND 313 billion (+34%YoY).
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