SSI Research: Seafood Industry’s 2024 Earnings to Grow by 20%-30%

DNHN - Vietnam's seafood exports are expected to continue their declining trajectory from 2023, leading SSI Research to predict a modest recovery pace in 2024, primarily in the second half of the year.

SSI Research has provided assessments of the Seafood industry. In 2023, seafood stocks have experienced a remarkable growth of 11.7%, nearly equal to the VNIndex. In general, investors have been anticipating the industry’s recovery, with some notable stocks such as FMC (+47%), ANV (+43%), and VHC (+7%). This reflects optimism about future prospects, despite facing significant challenges.

FMC continues to benefit from shrimp exports to the Japanese market, thanks to the expansion of new shrimp farms. Meanwhile, ANV has made a positive entry into the US market in 2023, strengthening the global position of the Vietnamese seafood industry.

However, according to SSI Research, despite positive signs, the recovery of the Seafood industry is expected to be gradual in 2024, mainly in the second half of the year. This is explained by the decline in seafood exports since 2023, where export turnover decreased by 20% in the first 11 months of the year.

Amidst declining average selling prices, particularly in the US and Chinese markets, the seafood industry faces significant challenges. Although the pace of decline has slowed since Q2/2023, there has not yet been a strong recovery and maintenance of selling prices compared to the previous year.

For the tra fish industry, SSI Research observes and predicts that the average selling price decline cycle lasts from 1.5-2 years to reach the bottom and takes about 4 years to go through a full cycle. It is expected that the average selling price may increase again in the second half of 2024, marking optimism about the market’s recovery.

On the shrimp industry side, SSI Research emphasises the focus of domestic shrimp export enterprises on value-added products. Vietnam, ranked 4th in the US market and 1st in Japan, is highly regarded for its ability to produce value-added products, thanks to its skilled workforce and the use of advanced processing technology.

Despite the decline in shrimp export prices to the US, they remain stable compared to Ecuador/India/Indonesia. Facing higher discount prices can be a challenge, but SSI Research expects shrimp selling prices to remain stable or increase slightly in 2024.

Although input prices have decreased, gross profit margin may still decline year-on-year in the first half of 2024 due to lower average selling prices. Despite the weak recovery in order volume, SSI Research believes that the supply of raw shrimp and fish will be sufficient, leading to a slight decrease in prices due to weak demand.

Overall, the Seafood industry is facing many challenges but also carries opportunities for recovery by the end of 2024. The market is awaiting agility and innovation to overcome challenges and seize opportunities amidst the volatility of the global market.

P.V