Title PLC_BUY_TP 34,700_Upside 42%_Surging Asphalt_BSC company update_checked
Report Type Phân tích công ty
Source BSC
Bussiness PLC
Detail Date : 22/07/2021
Total pages : 8
Language : English
File Type : .PDF
FileSize : 481 Kb
Download: 97
Download
Vote (You must be logged in to vote)
Short Content
Valuation
BSC raised its recommendation from MONITOR to BUY for PLC stock and raised its 2021 target price to 34,700 VND/share (+42% compared to the price on November 10, 2020) due to stock reevaluation and forecast improvement of the 2021 business results report. We raise our 2021 target PE from 10x to 11x
 
Performance forecast 
 2020: Revenue = 5,498 billion VND (-11% yoy) and NPAT = 170 billion VND (+17% yoy), 
EPS FW 2020 = 2,106 VND/share. Assume (1) asphalt production +25% yoy, (2) lubricant production -10% yoy, and (3) chemical yield -35% yoy.
 2021: Net Revenue = 6,649 billion VND (+21% YoY) and NPAT = 255 billion VND (+50% YoY), EPS FW 2021 = 3,153 VND/share. Assume (1) asphalt production +30% yoy ,and (2) lubricant production and light recovery chemicals +10% yoy.
 
Catalyst
 The North-South Expressway investment project brings growth prospects to the material 
industry, including asphalt.
 
Investment thesis
  •  Low oil prices help improve PLC’s GPM. It is estimated that for every 1 USD decrease in oil price, PLC’s gross profit margin improves by 0.3%
  • Trung Luong – My Thuan Expressway project accelerates progress, crNPATing +25%yoy  growth in short term (2020-2021) for PLC’s asphalt segment.
  •  North South Expressway project accelerates progress and converts to Public Investment, crNPATing and average growth engine of +30% yoy in the period 2021-2023 for PLC’s asphalt segment.
 
Investment risk
Bad debts from public investment projects due to procedures and slow disbursement 
progress.
 
Business update
Revenue and NPAT of 9M2020 reached VND 3,914 billion (-10% yoy) and VND 124 billion (+10% yoy), respectively, completing 78% of the revenue plan and 120% of the 2020 profit plan thanks to a strong increase in asphalt demand and low oil prices