Tiêu đề LTG_NEUTRAL_TP 45,300_Update business performances _BSC Company Update
Loại báo cáo Phân tích công ty
Nguồn BSC
Doanh nghiệp LTG
Chi tiết Ngày : 29/07/2022
Số trang : 12
Ngôn ngữ : English
Dạng tệp : .PDF
Kích thước : 741 Kb
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Tóm tắt

VALUATION

BSC recommends NEUTRAL for LTG at 45,300 VND per share (+8.4% upside compared to the price on June 08, 2022) with the DCF method.

BUSINESS PERFORMANCE FORECAST

BSC forecast that the Net Revenue and  Net Profit After Taxes of LTG will reach 10,753 billion VND (5% YoY) and 400 billion VND (-4% YoY), equivalent to diluted EPS excluding for provisioning of 4,010 VND. Meanwhile, PE fw = 10.5x. – Lower than the P/E of companies in the same industry equals 12.88.

INVESTMENT THESIS

§  The potential of the world food market, the goal of ensuring world food security, and the reopening of countries are the main reasons that help Vietnamese rice improve its export position in the world rice market. Therefore, the increase in selling price can improve the gross profit margin.

§  Having a value chain and effective cooperation model with farmers.

§  Optimize management activities and reduce costs effectively by applying ERP into operation. Phase 1 starts in Q1/2021 and phase 2 in 2022.

§  Stable dividend yield: ~6%

CATALYST

§  Expected to issue 10 million shares to strategic investors in 2022.

§  The Ministry of Finance approved the draft to increase fertilizer export tax from 0% to 5%, helping increase domestic supply and maintain stable input prices for rice production.

RISKS

§  Real EPS is hard to grow because the excess provision of reserves reduces the real profit of shareholders.

§  The risk of crop failure affects all core businesses.

BUSINESS UPDATE:

Net revenue and Net profit after tax in Q1/2022 reached 2,345 billion VND

(-2%YoY) and 184 billion VND (+0.2%YoY). In that:

(1)  Sales of plant protection drugs (Pesticides) decreased by 38%YoY. The main reason is that the supplier Syngenta stopped cooperating with LTG in the supply of pesticides because the cooperation contract expired in February 2022.

(2)   Revenue from agricultural products + 98% YoY, offsetting the drop in pesticide sales, mainly comes from orders in 2021. In early 2022, Loc Troi Agricultural Products Joint Stock Company - a member of LTG exported orders of more than 4,500 tons of rice with a unit price of ~15,133 million VND - higher 37% than the average export price of rice in Q1/2022.