Company Quarterly Earnings Update – DHC VN – 2021

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

2021 results highlights

  • Revenue advanced by 44.2% y/y to reach VND4,164bn thanks to both price increases (as the company passed on surged raw material costs) and sales volume growth. The volume of paper sales was up 10.4% y/y owning to both increased capacity (thanks to technical optimization) and strong export volume, while the domestic volume was flat due to the lockdown in all Q3. The volume of cardboard box sales increased by 16.8% y/y from a low base in 2020, while the utilization rate improved to 98.6% in 2021.
  • The gross margin declined from 19.0% to 16.2%. On a quarterly basis, the gross margin narrowed towards the end of the year as OCC prices (Old Corrugated Cardboard) trended upwards throughout the year due to collection disruption caused by the pandemic. Net financial expenses dropped by 92.2% y/y as the company paid off its long-term loans. Overall, net profit was VND481bn (+22.8% y/y).
  • DHC’s financial position remains solid with no long-term debts and low leveraging (D/E and D/A ratios of 0.22x and 0.15x, respectively). The company has a Capex plan of VND250bn to develop another cardboard box facility (115mn units/year) from 2022 to 2024. As for the next packaging paper mill, Giao Long 3, there is no concrete plan yet.


  • Both of DHC’s packaging paper and cardboard box facilities were running at full capacity by the end of 2021 as all pandemic-related disruptions had passed. The new cardboard box facility (60mn units/year) will begin commercial operations in April 2022. We estimate it will run at full capacity from 2024. In 2025, the next cardboard box project is expected to enter commercial operations. As the cardboard box capacity rises, some paper output will be used to produce boxes and improve the company’s gross margin.
  • For 2022, revenue is expected to increase by 11.9% y/y thanks to (i) higher selling prices as OCC prices are forecast to increase, and (ii) higher cardboard box volumes as the new facility is expected to run at 50% of capacity. Net profit is projected to rise by 11.9% y/y to VND539bn owning to a higher gross margin. For 2023, we project that selling prices will normalize while cardboard box volumes will increase as the facility increases its utilization to 70% from 2022. The gross margin is expected to improve to 18.7%, and net profit is forecast to grow by 6.1% y/y to VND571bn.

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