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- VHC announced its H1 2024 results with revenue of VND6.1tn (USD237mn; +22% YoY) and NPAT-MI of VND484bn (USD19mn; -27% YoY), fulfilling 50% and 34% of our respective full-year forecasts. Revenue slightly tracks ahead of our expectation while earnings trailed our forecast as weak selling prices continued in Q2 2024. We see potential downside risk to our forecasts, pending a more comprehensive review.
- In H1 2024, VHC’s revenue was led by robust recovery across segments, including a 23% YoY increase in sales of frozen pangasius filets and related products (e.g., breaded fish, fish fat, fish meal, and feed), 32% YoY growth in sales of collagen and gelatin (C&G), coupled with a 69% YoY jump in rice (Sa Giang) products. The company experienced positive growth across key markets, including in the US (+8% YoY), Europe (+20% YoY), China (+16% YoY), and other countries (+45% YoY).
- Per our estimate, in H1 2024, GPM before inventory provisions decreased 6.6 ppts YoY to 13.4% vs 20.0% in H1 2023. This is chiefly because VHC’s pangasius filet’s ASP has been depressed at USD2.9/kg (-20% YoY) due to price-cautious global consumer spending in H1 2024. We note that between quarters, VHC typically recognizes inventory provisions and reversals of those provisions, which could complicate the interpretation of GPM movement in relation to selling prices and input costs.
- In Q2 2024, VHC’s gross profit and NPAT-MI jumped 73%/85% QoQ, respectively. This is due to (1) GPM improvements of 5.1 ppts QoQ which we believe to be driven by lower feed and farming costs, and (2) operating efficiencies as SG&A/sales declined 20 bps QoQ.
VHC’s Q2 and H1 2024 results
VND bn | Q2 2023 | Q1 2024 | Q2 2024 | YoY | QoQ | H1 2023 | H1 2024 | YoY | H1 as % of 2024F |
Net revenue | 2,724 | 2,856 | 3,196 | 17% | 12% | 4,945 | 6,051 | 22% | 50% |
*By market |
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- US | 927 | 723 | 1,049 | 13% | 45% | 1,634 | 1,772 | 8% |
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- Europe | 405 | 553 | 537 | 33% | -3% | 910 | 1,090 | 20% |
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- China & Hong Kong | 324 | 339 | 300 | -7% | -12% | 550 | 639 | 16% |
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- Others | 452 | 629 | 822 | 82% | 31% | 569 | 827 | 45% |
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- Vietnam | 694 | 807 | 927 | 34% | 15% | 1,252 | 1,734 | 38% |
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*By product |
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- Collagen & gelatin | 169 | 238 | 219 | 30% | -8% | 347 | 457 | 32% |
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- Frozen filets & others | 2,495 | 2,572 | 3,033 | 22% | 18% | 4,567 | 5,605 | 23% |
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- Rice products | 91 | 176 | 189 | 108% | 7% | 216 | 365 | 69% |
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Gross profit | 580 | 266 | 462 | -20% | 73% | 964 | 728 | -25% | 36% |
SG&A | -115 | -132 | -141 | 23% | 7% | -234 | -273 | 17% | 44% |
EBIT | 465 | 134 | 320 | -31% | 139% | 730 | 455 | -38% | 33% |
PBT | 521 | 217 | 393 | -25% | 81% | 780 | 610 | -22% | 37% |
NPAT-MI | 439 | 170 | 314 | -29% | 85% | 658 | 484 | -27% | 34% |
Gross margin | 21.3% | 9.3% | 14.4% |
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| 19.5% | 12.0% |
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SG&A/sales | 4.2% | 4.6% | 4.4% |
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| 4.7% | 4.5% |
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EBIT margin | 17.1% | 4.7% | 10.0% |
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| 14.8% | 7.5% |
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NPAT-MI margin | 16.1% | 5.9% | 9.8% |
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| 13.3% | 8.0% |
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Source: VHC, Vietcap’s forecast (*Revenue breakdowns by market and product are based on VHC’s preliminary results, of which the total revenue figure is slightly different from the official number)
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