Company Quarterly Earnings Update – VSC VN – 2020

Summary of the 2020 results of Vietnam Container Ship. (VSC VN)

2020 results highlights:
  • VSC’s net revenue declined by 5.8% y/y to VND1,689bn in 2020 mainly due to lower port throughput volume, which fell by 10.8% y/y. However, the recovery of other businesses such as trucking, and C/Y has supported sales since Q4/2020. The operating margin was nearly flat at 18.9% compared to last year, while the EBITDA margin improved to 32.8% from 31.9%. The company has restructured operation costs and invested some in-house equipment in 2020. All in all, net profit inched up by 2.7% y/y.
  • By the end of 2020, VSC has paid all debts and maintain a cash and cash equivalent amount of VND501bn, accounting for 20.4% of total assets.
  • Our forecast is based on the view that the global economy and its trade will recover in 2021. Vietnam’s trade activities should expand faster than the international average, thanks to strong FDI inflow. We believe that Vietnam’s trading activities will resume with double-digit growth from 2021 onwards.
  • Port demand will outpace supply in the Hai Phong area for the next three years, causing overall port utilization to increase from 74% in 2020 to 86% by the end of 2023, and even more if new ports cannot set up soon. The authority will likely increase stevedore price in the coming time, benefiting port operators in Hai Phong. We expect the current shortage of container equipment situation will have a small impact on VSC.
  • We expect VSC’s bottom line to grow 15.0% y/y to VND276bn in 2021, thanks to the port volume recovery. Then net profit should advance sightly by 3.9% y/y to VND287bn in 2021.

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