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Dong Hai Ben Tre (DHC VN) – 9M 2025 Earnings – Powerful Margin Expansion and Strong Packaging Demand
Summary of 9M 2025 results and outlook of Dong Hai Ben Tre JSC (DHC VN)
- Earnings growth driven by stronger packaging utilization and margin gains: Core revenue rose 3.7% y/y; net profit surged 33.8% y/y to VND258bn. Kraft paper remained the main contributor at 79.1% of sales (+1.2% y/y), with full-capacity operations benefiting from DHC’s strategic Mekong Delta location. Growth was led by the packaging box segment (+14.4% y/y; 20.9% total revenue), driven by higher utilization (86.0% vs. 72.9%) amid robust e-commerce and export activities. Profit growth was fueled by (1) a higher contribution from the higher-margin packaging segment, (2) lower OCC input costs, and (3) increased financial income from a larger cash balance.
- Industry tailwinds support pricing power: Vietnam’s packaging paper oversupply has eased following stricter environmental enforcement that removed ~1 million tons of annual capacity (~15% of 2024 output). With relatively minimal new capacity expected through YE2026, larger compliant producers like DHC are positioned to gain pricing power, supporting higher average selling prices (ASPs). The oversupply mainly affects medium and testliner products, while Vietnam continues to import higher-grade kraftliner—the segment DHC will enter with its upcoming Giao Long 3 (GL3) mill.
- Long-term growth drivers remain intact: The packaging paper consumption industry is forecasted to grow at a 15% CAGR, supported by: (1) sustained double-digit retail sales growth from rising incomes; (2) a fast-growing e-commerce market ; (3) robust export activities, especially from Mekong Delta; and (4) a regulatory push toward sustainable packaging.
- Q4/2025 forecast: Revenue is projected to be driven by kraft paper and near-full box packaging utilization. With stable operations but lower financial income after cash disbursement for GL3, net profit is estimated to increase year-over-year.
- 2026 outlook: Net profit is expected to remain stable as higher earnings from increased packaging box contribution offset the impact of (1) a higher effective tax rate (tax incentive for GL2 expires in 2025) and (2) lower financial income due to cash deployment for GL3 investment.
- Giao Long 3 project: We maintain our estimate that the GL3 will begin commercial operation date (COD) starting Q3/2027, with expected groundbreaking in late Q4/2025 upon construction permit receipt.
Click here to read our comments on DHC’s previous quarterly performances.
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