VDSC In 2023, Phuoc Hoa Rubber's profit may grow negative

DNHN - Phuoc Hoa Rubber and Rong Viet Securities made assumptions in the fields of rubber latex, wood treatment, Industrial Parks (IZ), and project compensation.

Rong Viet Securities Joint Stock Company (VDSC) has just released a report analyzing Phuoc Hoa Rubber Joint Stock Company with a revenue and profit forecast of VND 1,749 billion and an increase of 2.4% over the same period in 2023. Estimated after-tax revenue is 528 billion dongs, down 40.4% from the same period last year.

In the areas of rubber latex, wood treatment, Industrial Parks (IZ), and project compensation, VDSC makes assumptions. As the Chinese market has fully opened, it is anticipated that VDSC's latex business will recover; however, the Chinese market's weak demand significantly impacts the global price of rubber.

With wood processing expected to remain challenging, the consumer market shows no signs of improvement. Currently, the Truong Phat wood processing factory (a subsidiary of Phuoc Hoa Rubber) only maintains less than fifty percent of its capacity by supplying wood to small business households in the region to keep transportation activities running. manufacturing operations.

For the industrial zone segment, Phuoc Hoa Rubber will generate revenue from 5 hectares leased for $135/m2 in 2022.

Phuoc Hoa Rubber will sell 285 hectares of rubber trees for 200 million VND per hectare to generate additional income. In addition, the remaining compensation from the agreement with VSIP will be recorded in 2023. Specifically, VSIP transferred the remaining 207 billion dong of fixed compensation to Phuoc Hoa Rubber in February, and it will be reflected in the income statement for the first quarter of 2023. In addition, the compensation based on the rental progress of the VSIP 3 project (currently 60 hectares leased to Lego and Pandora) is expected to be paid this year. The amount received is approximately 72 billion VND or 1.2 billion VND per hectare.

In 2022, Phuoc Hoa Rubber recorded compensation totaling approximately VND 698.3 billion for the VSIP 3 Industrial Park project. Consequently, in 2023, the revenue from the compensation money for the VSIP 3 Industrial Park project may decline significantly compared to the same period in the previous year.

VDSC assesses that compensation income from the deal with VSIP will continue to be the profit fulcrum of Phuoc Hoa Rubber in 2023, given that the rubber business is expected to experience a slight improvement despite the slow impact of China's opening, which may cause rubber prices to recover more slowly than anticipated. In addition, input prices will decrease this year as a result of commodity price adjustments; the wood processing segment has not shown any signs of recovery due to consumer demand; and the industrial zone land business is anticipated to remain flat as Phuoc Hoa Rubber has only recorded leased area through 2022.

PV (t/h)