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* 2024 results: DRC reported net revenue of VND4.7tn (USD186.9mn; +4% YoY) and NPAT-MI of VND232bn (USD9.3mn; -6% YoY). These results fulfill 98% and 96% of our respective full-year forecasts, slightly falling short of our expectations.
* Q4 2024 results:
- Net revenue marginally increased 2% YoY in Q4 2024, driven by growth in most tire segments, except for radial tires, which saw a 6% YoY decline (per DRC). We attribute weak radial tire sales to US distributors stocking up on Thai truck & bus tires (TBR) ahead of the US anti-dumping duties (AD) on Thai TBR going into effect. We note that the final determination of US AD investigation on Thai TBR was announced on October 15, 2024, with official orders issued on December 17, 2024.
- NPAT-MI plummeted 37% YoY to VND59bn (USD2.4mn) in Q4 2024, primarily due to 5.5 ppts YoY lower GPM (caused by higher input costs YoY) and 129% YoY higher GA expenses (due to making allocations to the company’s science & technology fund, which had not been allocated in prior years).
- Profitability: GPM remained relatively unchanged QoQ at 12.6% in Q4 2024 but contracted by 5.5 ppts YoY due to continued elevated input costs. However, SG&A expenses/net revenue slightly eased by 0.5 ppts YoY to 7.3% in Q4 2024. As such, the EBIT margin fell by 5.0 ppts YoY to 5.4% in Q4 2024.
DRC’s Q4 2024 & 2024 results
VND bn | Q4 2024 | QoQ | YoY | 2024 | YoY | 2024/ Vietcap’s 2024F |
Net revenue | 1,118 | -8% | 2% | 4,673 | 4% | 98% |
COGS | -977 | -8% | 9% | -3,944 | 3% | 99% |
Gross profit | 141 | -7% | -29% | 729 | 12% | 94% |
Selling expenses | -49 | -7% | -31% | -348 | 30% | 91% |
GA expenses | -32 | 49% | 129% | -95 | 31% | 117% |
EBIT | 60 | -23% | -48% | 287 | -7% | 93% |
Net financial income & net other income | 13 | N.M. | 73% | 2 | N.M. | N.M. |
PBT | 73 | 22% | -40% | 289 | -6% | 95% |
NPAT-MI | 59 | 29% | -37% | 232 | -6% | 96% |
Gross margin | 12.6% | 0.1 ppts | -5.5 ppts | 15.6% | 1.2 ppts |
|
EBIT margin | 5.4% | -1.0 ppts | -5.0 ppts | 6.1% | -0.7 ppts |
|
NPAT-MI margin | 5.3% | 1.5 ppts | -3.3 ppts | 5.0% | -0.5 ppts |
|
Source: DRC, Vietcap
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