A director at Century Synthetic Fiber Corporation sold 6,878,420 shares at 0.000VND and the significance rating of the trade was 100/100. 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...
Q3/2023 business results are expected to have negative growth QoQ and YoY. According to STK, the actual order placement is still slow in 3Q23, and recovery is expected to be in 4Q23. According to our update, the muted growth of sportswear brands will continue in the short run (until around March 2024), especially the US and EMEA markets where promotions continue to ramp up, but demand remains weak. Our forecast for Q3 revenue and NPAT-MI will reach about VND 360 bn (-12% QoQ, -30% YoY) and VND...
2Q23 awaits a recovery. We expected STK’s performance to bottom out in 1Q23 and then recover through 2H23. As a yarn company, we expect STK to lead the rebound as demand picks up in 2H23. We expect STK’s 2Q23 net revenue and NPAT to reach VND 420 bn/USD17.8 mn (+46% QoQ, -20% YoY compared to a high base 1Q22), and VND 33bn/USD 1.4 mn (21x QoQ, -50% YoY), respectively. Retain ACCUMULATE; we lift our TP to VND 32,800/share (from 32,500/share). We cut our 2023 earnings forecasts by 39% largely r...
We attended STK’s 2023 annual general meeting (AGM) in HCMC on Mar 30th. Our key takeaways are as follows. STK has pre-released its 1Q23 results with revenue of VND 270 bn/ USD 11.5 mn (-37% QoQ, -58% YoY) and NPAT of VND around 3 bn/ USD 0.13 mn (~ -93% QoQ, ~ -96% YoY). The preliminary 1Q23 results were weaker-than-expected but not surprised us when brand’s orders declined on destocking cycle. For FY2023, management keeps a conservative single-digit revenue (+1.6% YoY) and NPAT (+4.5% YoY)...
STK announced its 4Q22 net revenue of VND 430 bn/USD 18.1 mn (-16% QoQ; -13% YoY). NPAT-MI was VND 43 bn/ USD 1.8 mn (-14% QoQ; -43% YoY), mainly due to (1) a sharp decline in total yarn volume, and (2) a higher CIT expense in Q4/2022. Overall, STK’s 2022 net revenue and NPAT-MI were VND 2,115 bn /USD 89.8 mn (+3.5% YoY) and VND 240 bn/USD 10.7 mn (-13.7% YoY), achieving 97% and 98% of our full-year forecasts. For 2023, we expect earnings to rebound, particularly in the second half. Due to th...
As an upstream producer, STK was hurt earlier than textile/apparel producers. Cumulative 9M22 sales came to VND 1,685 bn (+9%YoY) and NPAT-MI to VND 196 bn (-4% YoY), fulfilling 65% of the company’s sales and NPAT-MI targets. GPM shrank 109 bps YoY as the overall price gap (ASP less average chip cost) dropped about 5.5% YoY, mainly due to a 28% decline of virgin yarn price gap. We expect 2023 earnings to rebound although STK might experience negative earnings growth in 1H23 due to subbed dema...
3Q22 net revenue was VND 515 bn/ USD 20.7 mn (-3% QoQ, +10% YoY compared to 3Q21 low base). NPAT-MI just came at VND 50 bn/ USD 2 mn (-28%QoQ, -18%YoY), missing expectations, due to FX losses and direct customers’ weakening orders. Overall, STK has completed 65% of its net sales & NPAT targets for FY22. For 4Q22, we forecast net revenue and NPAT-MI of VND 520 bn/ USD 20.9 mn (+1%QoQ, -19% YoY) and VND 57 bn/ USD 2.3 mn (+14% QoQ, -25% YoY), respectively, as orders momentum decelerate,...
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...
· In 4Q-FY21, despite declining revenue by 13% YoY, NPAT grew 10% YoY due to tax incentives. · STK released positive 2021 results with revenue of VND 2,042 Bn (or USD 89 Mn, +16% YoY) and NPAT of VND 278 Bn (or USD 12 Mn, +94% YoY), completing 87% and 112% of the guidance, respectively. · In 2022, we forecast revenue and NPAT to reach VND 2,659 (or USD 116 Bn, +30% YoY) and VND 358 Bn (or USD 16 Mn, +29% YoY), respectively. Key catalysts for 2022 earnings growth...
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....
The Covid-19 pandemic and the US-China trade tension has created a turbulent business environment for US fashion companies, resulting in changes in their sourcing strategies. Although Vietnam has strengths to attract orders, China remains the top supplier in the short term. However, the Xinjiang issue is going to be an opportunity for Vietnam, at the expense of China. [/wTUQ8yJslIuXQsahVyAMs2uITw1Tvlk0NVEDd1tA.png] VIETNAM APPAREL EXPORTS TO THE US SUFFERED THE LOWEST...
Covid-19 has accelerated changes in consumer behaviour towards sustainability, which has been reflected in STK’s performance in Q4 20. Garment orders are being shifted from China to Vietnam and companies are increasingly using domestically produced yarn to take advantage of tariff incentives. These factors will give ample growth opportunities for STK in coming years. Given the changes in our expectations on STK's prospect in 2021 and 2022 based on the better-than-expected performance in Q4 2...
The strategy to focus on recycled yarn continues to prove its effectiveness amid the pandemic. In the long term, the shift of textile and garment production chains from China to Vietnam and the accelerating trend of using domestically produced yarn by garment companies to take advantage of markets’ tariff incentives will ensure STK's growth in both revenue and profit. Therefore, we raise our target price for STK from VND15,900/share to VND22,400/share. Combined with an expected cash dividend...
The strategy of focusing on recycled yarn continues to prove its efficiency amid the adverse effects of the pandemic. Given the better-than-expected recovery of yarn demand in Q3 20, especially recycled yarn that has been backed up by the accelerating "green lifestyle" post-pandemic, we revise up our target price for STK from VND15,600/share to VND18,700/share. With an expected cash dividend of VND1,500/share in the next 12 months, the total return is 14%. We recommend Accumulate.
The Covid-19 pandemic has hurt the world’s demand for yarn and STK’s sales have been impacted more seriously than our expectations. However, the strategy of focusing on recycled yarn continue to prove its efficiency amid the headwinds. Based on the prospect of the slow recovery of the overall yarn demand in H2 20 and 2021, we revise down our target price for STK to VND15,900/share from VND20,000/share. With a cash dividend of VND1,500/share in the next 12 months, the total return is 13%. Th...
“The pandemic has hurt the world’s demand for yarn and STK’s sales more seriously than our expectations. However, the strategy of focusing on recycled yarn continue to prove its efficiency amid the headwinds. Based on the prospect of the slow recovery of the overall yarn demand in 2H2020 and 2021, we revise down our target price for STK from VND 20,000/share to VND 15,900/share. With a cash dividend of VND 1,500/share in the next 12 months, the total return is 13%. The large adjustment of the ma...
The pandemic has hurt STK more seriously than our expectations. However, the strategy of focusing on recycled yarn continue to prove its efficiency amid the headwinds. Based on the prospect of the slow recovery of the overall yarn demand in H2 20, we revise down our target price for STK from VND20,000/share to VND15,600/share. With a cash dividend of VND1,500/share in the next 12 months, the total return is 17%. We recommend Accumulate. H1 20 revenue fell by 21% yoy, reaching VND869bn. Consum...
While the entire textile industry’s value chain is badly affected by the pandemic, STK is not an exception and the worst time, in our opinion, will be 2Q when many large markets enter the drastic phase of fighting the pandemic. Consumers' uncertainty about the economic prospects after the pandemic could lead to lower spending on some types of goods, including apparels. Low demand for apparels would indirectly affect yarn demand. However, we believe that STK can somewhat limit the impact of this ...
The entire textile industry value chain has been badly affected by the coronavirus pandemic and STK is no exception. In our opinion, Q2 will be worse as many large markets continue to fight the pandemic. The economic uncertainty brought on by the pandemic could lead to lower spending on some types of goods, including apparels, which would indirectly affect yarn demand. However, we believe that STK can somewhat limit the impact of this trend thanks to: (1) its production shift towards highly p...
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