Investment Recommendation

DGC_BUY_TP 233,000_Benefit from high anchor export prices_BSC Company Update

Date

12/04/2022
Language

Tiếng Việt
Number of Downloads

195

Detailed report

Valuation

We maintain our BUY recommendation for DGC stock with a 2022 target price of VND233,000,+31% from the March 3, 2022 price of VND177,600 due to adjusted business forecast (core segment) of the company. in 2022 (+55% compared to the latest forecast) due to the adjustment of export prices with the expectation of high anchor commodity prices in 2022 (+10% compared to the last report).

Forecasting business results

BSC forecasts revenue and profit after tax (core business) in 2022 to reach 11,605 billion (+22% YoY) and 3,851 billion (+53% YoY). EPS FW 2022 = 22,200 VND, PE FW 2022 = 8.0 times.
BSC forecasts RNAV value of Real Estate Project 44 Duc Giang at 349 billion.

Outlook for 2022

Continuing to benefit from high anchored commodity prices.
Production costs continue to be reduced thanks to self-reliance in Apatite ore sources.

Risks

Policy risks related to the environment.
Risk of increasing input costs (coal costs).

Business Update

Business results in 2021 grow strongly. Revenue and profit after tax reached 9,550 billion (+53% YoY) and 2,514 billion (+165% YoY). Gross profit margin increased sharply to 33.3% from 23.7% over the same period.
BSC believes that the strong growth in business results comes from (i) The selling prices of all products have increased according to world prices: The price of yellow phosphorus doubled; Fertilizer prices increased by 82% YoY (i) Costs were partially reduced by going into ore mining at the site 25.