A director at DaNang Rubber Jsc sold 90,000 shares at 0.000VND and the significance rating of the trade was 69/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearl...
Combining FCFF (50%) and multiples comparison (PER) (50%), our target price for DRC is VND20,300 which is -9% lower than the closing price on Jun 02nd 2023. However, DRC maintains a stable dividend policy, with an average payout ratio in the last five years of ~64%. For the next 12 months, the expected dividend is VND 1,400/share, equivalent to a dividend yield of 6%. We believe that DRC is a suitable investment under the “dividend investment strategy”. With the concerns that unfavorable busine...
On Mar 21st 2023, the Brazilian government rose import tariffs of truck tires from 0% to 16% after receiving the demand from Brazilian tire producers in Oct-2022. Brazil accounts for 60% of global DRC exports, equivalent to 36% of total 2022 revenue. We see a downside risk to 2023 exported sales growth. 2023 business targets with net sales and net profit of VND5,060 bn (+3% YoY) and VND264 bn (-14% YoY), respectively. We see a signal of uncertain selling volume trajectory as well as a negativ...
In Q4 2022, Danang Rubber Jsc. (HSX: DRC) posted net sales of VND1,114 bn (or USD47 mn; -17.6% QoQ; -16.4% YoY), dragged down by lower domestic tire consumption and Q4 2021 high-based performance. Higher input costs and lower selling expense/sales ratio produced a net profit of VND82 bn (or USD 3 mn, +6.2% QoQ; -6.3% YoY). Backed by 9M2022 strong performance, DRC had a 2022 rosy business result with revenue and net profit of VND4,899 bn (+12% YoY) and VND308 bn (+6% YoY), respectively. The ke...
· DRC set Q3 2022 net sales and pre-tax profit targets at VND1,190 bn (+3.7% QoQ; +28.1% YoY) and VND86 bn (-18.1% QoQ; +103.9% YoY), respectively. Total sales value of July & August-2022 are VND957 bn (met 77.5% of Q3 2022 ‘sales target). · We suppose that DRC will exceed its Q3 2022 business plan based on 1) positive business results in July & August 2022; 2) strong growth of automotive production in Brazil and the US markets as the shortage chip problem started to eas...
· In Q2 2022, DRC recorded net sales of VND1,148 bn (or USD 49 mn, -10.6% QoQ; -4.7% YoY), of which, domestic market posted a negative growth. Although DRC raised the average selling price (ASP) by over +15% YoY during Mar-2021 and Jun-2022, it could only pass a part of increasing production costs to customers, resulting in 2Q2022 net profit of VND84 bn (or USD 3.6 mn, -27.3 %QoQ; -20.8% YoY). · We expect 2022 sales will grow by +17.5% YoY to VND5,147 bn (or USD 220 mn),...
The Russia-Ukraine war and US and European sanctions on Russia have raised concerns about the risk of a global supply chain disruption, especially since Russia and Ukraine are two major exporting countries in terms of metal products, fertilisers, agricultural products and oil and gas. This has pushed prices of commodities, which have been on a significant rally during the two years of the pandemic, once again back to its peak. Speculation on commodity prices has led to a rapid and strong incr...
We use our valuation mix of 50:50% for DCF/PER to evaluate the stock. Our fair value comes in at VND37,000 per share, implying a 2022 PER of 10.4x. We recommend Buy with a total stock return of 34% and a cash dividend yield of 6%. In 2022, we estimate DRC's revenue to reach VND4,884bn (USD211mn, +12%yoy) and VND372bn (US$16mn, +28% yoy) in NPAT. Acceleration in 2022 NPAT for DRC will be driven by revenue growth, widening gross margin and a decline in SG&A expense ratio. We estimate revenue i...
· We use our valuation mix of 50%:50% for DCF/PER to evaluate the stock. Our fair value comes at VND 37,000 per share, implying a 2022 PER of 10.4x. We recommend BUYING with a total stock return of 34% and a cash dividend yield of 6%. · In 2022, we estimate DRC to reach VND 4,884 Bn (USD 211 Mn, +12% YoY) in revenue and VND 372 Bn (USD 16 Mn, +28% YoY) in NPAT. NPAT acceleration in 2022 will be driven by revenue growth, widening gross margin and SG&A expense ratio decrea...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
POSITIVE HIGHLIGHTS Production expansion of radial tyres. In 2019, the radial plant operated at a capacity of 85%, reaching production of 511,000 tyres. The company expected the plant to run at 100% in 2020 with increasing exports to the US. However, Covid-19 interrupted exports to the US and Brazil, causing the export volume to drop by 33% yoy. Thus, the capacity in 2020 is estimated at 80% only, equivalent to production of 480,000 tyres. However, this year, we expect radial production to i...
After poor results in Q2 20 due to the impact of Covid-19, DRC recovered in Q3 20. However, the increasing competition in the industry made selling prices of key products such as radial tires and bias tires drop. At the same time, selling expenses also increased for the company as it tried to maintain market share. Therefore, we expect 2020 revenue and profit to decline compared with 2019. In contrast, 2021 results are expected to be better due to the increase of exports and reduced depreciat...
8M 20 results VAMA members’ sales volume decreased by 24% yoy at the end of August 2020, down to 145,689 units. Passenger car volume declined more than commercial vehicles, falling by 25% yoy and reached only 106,689 units. The decline is due to a fall in income and delays in non-essential spending on Covid impact. Commercial vehicles sales volume decreased by 20% yoy (reaching 37,432 units). Sales volume of domestically assembled cars decreased by 19% yoy (to 96,473 units) while imported car...
In H1 20, radial tire exports were heavily affected by Covid-19. Results continued to decline following the trend of recent years. Taking into account the difficult year, the increasing level of competition and the possibility of the radial plant expansion, which will happen in 2021 instead of 2020, we adjust our target price by reducing it from VND22,500/share to VND19,200/share. Coupled with the expected cash dividend of VND1,000/share within the next 12 months, the total return is 27%. We ...
With the second wave of the coronavirus pandemic, economic recovery will take longer than we expected because of weaker domestic consumption. The second wave has negatively impacted consumer buying power and mobility. Since Vietnam is heavily dependent on exports, a global recession will result in decreasing manufacturing orders, dragging down production activities. However, there are supportive elements for the economy, especially the government’s support towards power infrastructure constru....
2019 results Revenue in 2019 was VND 3,858 billion, up 8.6%. The bias segment recorded a decline in revenue of -11.6%, to VND 1,203 billion. On the contrary, radial tire sales grew by (+13.1%) as it went up by 34.2%, to VND 1,916 billion due to an increase of 36% in sales volume, to 511,005 tires. The GPM increased from 12% in 2018 to 14.8%. Most of DRC's products had higher GPM than during the previous year. In fact, the two main products (bias and radial tires) saw GPM improving from 22.5% ...
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