Title NKG_HOLD_TP 46,50_REACH A NEW PEAK_BSC Company Update
Report Type Phân tích công ty
Source BSC
Industry Basic Materials
Bussiness NKG
Detail Date : 26/01/2022
Total pages : 7
Language : English
File Type : .PDF
FileSize : 1012 Kb
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Short Content
VALUATION  
BSC  recommends HOLD NKG stock with a 2022 target price of 46,500 VND/share, equivalent to 17.8% upside from September 1, 2021 based on P/E = 5.5x valuation method.

FORECAST BUSINESS RESULTS
  • BSC forecasts that NKG's revenue and net profit in 2021 will reach VND 23,378 billion (+102% yoy) and VND 2,202 billion (+646% yoy), equivalent to EPS 2021 = VND 10,957/share with assumption (i) total sales volume reached 1.02 million tons (+44% yoy) and (ii) average selling price +40% yoy based on world HRC prices.
  • BSC forecasts NKG's net profit and net profit in 2022 will reach VND 24,066 billion (+3% yoy) and VND 1,928 billion (-13% yoy) respectively, equivalent to EPS 2022 = VND 8,524/share with the assumption (i) ) sales volume +14% yoy and (ii) Average selling price -10% yoy due to the recovery of world steel supply leading to price adjustment.
 
INVESTMENT THESIS
  • Export continues to be the driving force for NKG's business results in the future.
  • HRC steel price continued to remain at a high level, helping to improve NKG's profit margin.
 
RISKS
HRC price fluctuations can directly affect the profit margin of enterprises.
 
COMPANY UPDATE 1H2021
  • NKG's net revenue and NPAT in 1H2021 reached VND 11,862 billion (+149% yoy) and VND 1,166 billion (19.7x yoy) respectively, 94% higher than the 2021 plan.
  • Consumption volume in 1H2021 reached 564,500 tons (+91% yoy) thanks to strong growth in export volume.
  • Inventory at the end of Q2/2021 +130% compared to Q2/2020 as NKG boosted production activities to meet market demand.