Earnings Report /
Vietnam

Binh Dien Fertilizer: Positive outlook for 2022 but unlikely to continue in 2023

  • Stable gross margin in Q1 22 amid volatile raw materials

  • Flat ASP, decline in sales due to competition, weak purchasing power and potential new export tax policy

  • 2022 profit to grow but will be hard to maintain in 2023; recommend Hold with a TP of VND31,300

Vu Tran
Vu Tran

Oil & Gas, Fertilizers

Rong Viet
6 June 2022
Published by

After posting positive results in 2021, BFC announced Q1 22 earnings with growth of 46.8% and 19.3% in net revenue and NPATMI, respectively. 

However, revenue growth came from a higher ASP while sales volume fell 15.1% in Q1 22. The gross margin stayed at 12%, compared to 12.6% in Q1 21. 

BFC maintained huge inventories in Q2 21 to prevent fluctuations in raw material as well as to ensure enough input for production. 

Revenue and NPATMI are forecast to reach VND9,756bn (+26.6%yoy) and VND281bn (+28.1% yoy), respectively in 2022. However, there will be no significant earning growth from 2023 onwards barring a good cash dividend policy, which is a result of favourable business operation in 2021-2022. 

The target price for BFC is VND31,300. Combined with a cash dividend of VND2,000, we recommend Hold. At the current market price, investors could receive at least 4,000 cash dividends till 2023, equivalent to a yield of 11.9%.