Blog & Media

Company Quarterly Earnings Update – DBC VN – 2019 Q2

Summary of the H1/2019 results of Dabaco (DBC VN) 

African Swine Flu (ASF) outbreak update
  • 4.4 mn pigs (15% of Vietnam’s herd size) were culled since the disease was first discovered in February 2019. However, there was no reported case yet at an industrial-size farm of a large company such as  CP or Dabaco.
  • After  bottoming  in Q2, live pig prices have  started to increase in Q3, because of lower supply and increased cross-border trade to China, which supported  record-high prices. The ASF was discovered 6 months earlier in China than in Vietnam. China’s ban of meat imports from the U.S. helped to keep pig prices high
H1/2019 results: highlights
  • DBC’s revenue increased by 11.5% y/y, but growth decelerated in Q2 due to  lower pig prices. On a y/y comparison, core business profitability was similar as in H1 of last year. However, the lack of real estate revenue/profit and higher interest expenses lowered the company’s bottom line by 64.6% to VND37bn.
  • Leverage increased moderately in Q2 from Q1: Short and long-term loans amounted to VND 4,700bn (+6% q/q), leading to a D/A and to a D/E of 0.50x and of 1.71x respectively.
  • DBC moved its listing to the Ho Chi Minh Stock Exchange on  26 Jul 2019.
Outlook
  • We expect live pig price to stay elevated till at least Q2 of next year when the new breed can be slaughtered, helping to support the profitability of DBC’s pig breeding and farming activities.
  • We retain our latest profit forecasts for 2019 and for 2020. We expect net profit to fall to VND203 bn (-43.5% y/y) this year as there will be no real estate profit, but  higher interest expenses. However, net profit is projected to rise to VND 240bn (+18.1%) in 2020
Recommendation

Company ratings and target prices are accessible for clients only.

If you are interested in getting full access to our paid Primary Research Materials feel free to get in touch with us at your convenience.

Our team is actively covering 50 companies in the listed Vietnamese equity space for our clients.

 

Featured image credit: pixabay.com

Related Article

Summary of the 9M/2019 results of Vietnam Container Ship. (VSC VN) 

Summary of the 9M/2019 results of Imexpharm Pharma. JSC (IMP VN)