20171208_BSC_Vietnam Company Visit Note_EN_DPM_ICB1350

On 08, Decemer, 2017, DPM shares were traded at VND21,300 per share, equivalent to a PE of 13.64x, much higher than the average PE fertilizer producers.

Company updates
• 10M2017, DPM sold out 700 thousand tons of urea, 330 thousand tons of other fertilizers, 27 thousand tons of other chemicals. Net revenue and EBT of 10M2017 reached VND7,078 billion and VND 800 billion, respectively.
• Average selling price of urea is about VND 6,800-6,900 / kg, up 11% compared to the average price in 2016.
• Gas input prices increased by 31%, to around $ 5.1 / MMBTU. Gas prices are forecasted to remain high in 2018, negatively impacting DPM's urea business.
• Gross revenue and EAT are forecasted to be at VND 8,571 billion (+ 8% yoy) and VND 698 billion (-39% yoy) respectively due to high gas prices and debt repayment for PVtex of VND 80 billion.
• The NH3-NPK plant is expected to be officially put in to operation in early 2018.
• Advance payment of 10% cash dividend for the fiscal year of 2017.

Catalysts:
• PVN divestment of DPM.

Risk
• Operational risk with regard to new factory
• Having to make debt repayment for PVtex