Company Quarterly Earnings Update – DHC VN – 2021 Q1

Summary of the 2021 Q1 results of Dong Hai Ben Tre JSC (DHC VN)

Q1/2021 results highlights

  • Revenue went up by 51.6% y/y, thanks to both volume growth (paper volume +18.4% and carton box +30.9% y/y) and price increases as the company passes on surged raw material costs. Revenue of packaging paper accounted for 90.6% of the total revenue, up by 54.8% y/y. Selling volume of packaging paper reached 78,800 tons (+18.4% y/y), with domestic sales accounting for 85% and export 15%. The robust volume growth is attributed to both increased capacity and strong domestic packaging paper consumption. Noteworthy is that thanks to its technical optimization, DHC has been able to gradually increase the productivity of its both factories: Giao Long 2, the newer factory, currently reaches a capacity of 740tons output/ day vs. its 660tons/ day at its inception in 2019.
  • Net profit increased 93.9% y/y to VND 172bn. On y/y basis, operating margin stayed at a similar level. Less financial expenses and lower effective tax rate are the reasons for the stronger net profit growth.
  • Financial position at the end of 2020 remained healthy with a low leverage (D/E and D/A of 0.31x and 0.19x).


  • In Q1, Vietnam’s consumption of packaging paper was 1.1mn tons, up by 30% y/y. DHC’s market share is 6.9%. This strong performance corresponds to mostly the robust growths in trade activities, e-commerce, food and beverage delivery since the beginning of the pandemic as people reduced eating out, and paper packaging materials to replace plastic packaging for environmental protection purpose.
  • We revise up our 2021 revenue estimate by 22% to VND4,051bn thanks to 1) the optimization that led to the new capacity; and 2) higher selling price due to the surged in OCC price, which was not expected. Net profit was also revised up by 11% to VND 502bn, the revision rate is, nevertheless, only close to volume growth revision.
  • For 2022, we estimate revenue to decline by 6.4% y/y mainly because of normalized selling prices while carton box volume is to increase thanks to the commence of the new carton box factory. Net profit is to grow by 4.1% to VND523bn.

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