DBC - TP 69,600 - Post Peak Period

VALUATION

We recommend NEUTRAL for DBC with target price of VND 69,600/share, 11% upside compared to the price on September 15, 2021 with DCF and P/E methods, with a weight of 40% - 60%.

FORECAST OF BUSINESS RESULTS

BSC forecasts revenue and NPAT in 2021 is expected to reach VND 10,750 billion (+7.3% YoY) and VND 1,127 billion (-19.5% YoY), equivalent to EPS fw of VND 9,683, PE fw of 6.5x, PB fw is 1.5x.

INVESTMENT THESIS

§  Take advantage of scale and control the value chain in the 3F segment: proactively supply internal feed from 80-90% of DBC livestock demand, optimize gross profit margin compared to small businesses and livestock farmers. feed.

§  Long-term growth potential, thanks to (1) Livestock segment: capacity expansion of 3 project complexes in the pork segment in the period 2022-2023 (2) Vegetable oil segment: Expected oil press plant Phase 2 is expected to come into operation in Q4/2022 (3) Real estate segment: Promote investment in projects in Bac Ninh.

CATALYST

The potential comes from investment cooperation with large enterprises (Masan, CP, ...)

RISKS

§  Raw material price fluctuations affect profit margin.

§  Animal and poultry diseases.

§  Live hog price fluctuations.

COMPANY UPDATE