Company Quarterly Earnings Update – BMP VN – 2018 H1

Factory at Binh Minh Plastic JSC

Summary of the H1 2018 results of Binh Minh Plastic JSC (BMP VN) 
H1/2018 results: highlights

  • BMP resumed momentum in Q2/2018. For H1/2018 though, net sales reached VND 1,730 bn (-0.4% yoy) as the sales volume and the average selling price remained unchanged. Although higher input prices caused some margin pressure in Q2, the gross margin in the first half of this year remained unchanged (24.2%). Net profit was VND 227 bn (-0.7% yoy).
  • By the end of H1/2018. BMP’s financial status remained solid. Cash & short-term investments accounted for 19.2% of total assets. The D/E ratio was 0.02x.
Other development
  • Nawaplastic Industries Ltd further increased its stake in BMP to 54.39% by 5 July 2018.
  • Volume growth gathered strength in Q2/2018 although still a tad lower than in Q2/2017. Demand for construction materials from both residential development and infrastructure is strong. Many new residential apartment projects have just started, this time in affordable segments such as the VinCity project from Vingroup with 40’000 units. On the other hand, government spending on investment has picked up significantly in Q2 after a lackluster Q1.
  • As for all 2018, we estimate BMP’s net sales to grow by 7.2% yoy; in contrast, net profit is expected to decline by 10.7% as margins continue to tend lower because of new players, which recently entered the market. We do however not expect margins to erode much further.
  • We estimate an EPS CAGR of 12% for the period of 2019-2022.

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