Analyst Pin-board FMC – 2022 earnings to continue to see double-digit YoY growth
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· In 1H2022, FMC recorded revenue and NPAT-MI of VND 2,744 bn (+29% YoY, USD 119 mn) and VND 155 bn (+47% YoY, USD 6.7 mn), respectively. Shrimp export volume and export prices grew by 13% YoY and 15% YoY, respectively. Gross margin improved by 200 bps to 10.3%. · For FY2022, we forecast FMC’s revenue and NPAT-MI to reach VND 6,105 Bn (or USD 265 Mn, +17% YoY) and VND 340 Bn (or USD 15 Mn, +27% YoY), exceeding 3% and 15% the 2022 revenue and NPAT guidance, respectively. The new factory which will start operating in September 2022 and the new 200 ha farming area that will start farming in 2023 are the main growth drivers for FY2023 onwards. · Our new one-year target price for FMC is VND60,500/share, 13% lower than the most recent valuation due to: (1) We revise down FY2022/2023 NPAT-MI by 6% and 12%, respectively, to reflect the slowdown in the US market and the new factory put into operation one quarter later than expected; (2) We reduce our 2022 target P/E from 12x to 11x to reflect the uncertainties of the seafood industry in 2H2022. Our target price implies an expected return of 18% as of August 08th, 2022. |
Sao Ta Foods Joint Stock Company is a Vietnam-based company active in the food processing industry. The Company is engaged in the processing, trading and export of seafood products, as well as the management of aquaculture farms to supply its own operations. Apart from processed shrimps and pangasius, it also manufactures other food products from garlic, ginger, fruit, sweet potatoes, lotus roots, lotus seeds, pumpkins, onion and others. It is also involved in the distribution of raw agricultural and aquatic materials, together with the import of machinery and supplies for food processing activities. In addition, the Company is engaged in real estate operations and hotel operations. During the year ended December 31, 2012, 97.68% of its total revenue came from export sales.
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