07/21/017 PRESS AND ANALYST MEETING Q2/2017

Transcription

1 07/21/017 PRESS AND ANALYST MEETING Q2/2017

2 2 Contents Sales Report Q2/2017 Financial Results Q2/2017 Outlook for 2H2017 Q&A

3 1. Sales report Q2/2017 3

4 1. SALES REPORT Q2/2017 MARKET SHARE Accounts for 16% share of Vietnam pangasius exports, sustaining the leading position Top 10 Vietnam pangasius exporters 1H2017 Vinh Hoan Group 16% 190 công ty khác 35% Hung Vuong Group 11% Cadovimex II 3% Trường Giang 3% Gò Đàng Group Đại Thành Group 3% 3% IDI 5% Hung Ca Group 8% Biển Đông 8% Nam Việt Group 5% Source: Vietnam Customs 4

5 5 1. SALES REPORT Q2/2017 EXPORT VALUE 1H17 sales slightly increased by 2% yoy, in which Q2 alone up 12% yoy, mostly contributed by sales growth in Apr and June Monthly exports value +14% % Jan Feb Mar Apr May Jun Export value 2016 (USDm) Export value 2017 (USDm) Source: Vinh Hoan

6 6 1. SALES REPORT Q2/2017 PRODUCTS Strong growth of value-added products (338%), Collagen & Gelatin (309%) Export value breakdown by product segments Fishmeal & Fish oil 8% Others 2% Value-added products 3% Collagen & Gelatin 1% Value-added products Collagen & Gelatin Export value by product segments1h17 vs 1H H2016 (USDm) 1H2017 (USDm) H2017: USD142.65m Pangasius Fishmeal & Fish oil Pangasius 86% Others Source: Vinh Hoan

7 1. SALES REPORT Q2/2017 PRODUCTS Marinated Breaded Grilled Collagen & Gelatin 7

8 8 1. SALES REPORT Q2/2017 PRODUCTS Exponential growth of marinated products (1H17 sales rose > 3-fold vs 2016) Breakdown of value-added products Marinated Breaded Grilled (*) Others 7% 3% 12% 0% 22% Export value of value-added products (USD 000) 2016A 1H17A Marinated , % 2016: USD3.68m 1H17: USD4.77m Breaded Grilled (*) , , % 66% Others Source: Vinh Hoan (*): Commercial sales of grilled pangasius fillets started in early 2017

9 9 1. SALES REPORT Q2/2017 PRODUCTS Collagen and gelatin surged by 338% yoy, gaining more new customers and markets in 1H17 South Korea Sales grew strong and reached many prospects Europe Gelatin sales grew fast with many big customers Japan Stable purchases from existing customers but slow growth in market development India Finished import procedures China Developed broad network of new customers

10 10 1. SALES REPORT Q2/2017 MARKETS New markets saw stronger growth than traditional markets Market breakdown 1H17 vs 1H16-8% 65% 59% 1H17 1H16 +23% +35% +105% +109% 8% 8% 6% 5% 5% 5% 4% 4% 3% 3% 3% 5% 3% 3% 2% 2% 1% 2% 2% 3% USA UK China Canada Belgium Hong Kong Australia Mexico Japan Netherlands Others Source: Vietnam Customs

11 2. Financial results Q2/

12 12 2. FINANCIAL RESULTS Q2/2017 CONSOLIDATED P&L 1H2017 1H2016 Change (%) (VND bn) Net Revenue 3,970 3,681 8% Cost of Goods Sold -3,430-3,076 12% Gross Profit % Gros Margin (%) 14% 16% Financial Income % Financial Expenses % Selling, General and Administrative Expenses % Operating Profit, EBIT % Other profit (losses) % Pre-tax Profit % After-tax Profit % Earnings before interest, Tax, Depreciation and Amortization (EBITDA) % EBITDA Margin (%) 11% 13% Net Profit Margin (%) 6% 9%

13 3. Outlook 2H

14 14 3. OUTLOOK 2H2017 VIETNAM PANGASIUS INDUSTRY $ Expanding official trade value and narrowing crossborder trade Increasing average selling price in the US

15 15 3. OUTLOOK 2H2017 VINH HOAN 20% 5 20% yoy growth forecast in Q3 s export value Sales from grilled pangasius fillets expected to rise by 5- fold in 2H17 vs 1H17 From September, the nursery phase for newly-expanded farming area of 220ha will commence

16 4. Q&A 16

17 Question 1: What caused decline in Q2 s net profit margin? Due to increasing depreciation costs and raw materials price (over selling price). Q2 s raw materials price went up by 5% yoy and down 5% vs Q1/17. Question 2: Current raw materials self-supply ratio? With the current farming area of 500 ha (in which pangasius area is 405 ha), and an additional 220 ha expanded in 1H17, we can self supply around 60% of the raw materials required for production. In the long run, we target a ratio of 70-80% Question 3: How is the market development progress in China? Currently, Vietnam is exporting 70% of its pangasius to China via cross-border channel, the remaining 30% via official channel. Vinh Hoan only exports via the latter channel. Recently China government has exerted tighter control over the cross-border trading, which will translate to a downsizing in this channel and larger room for those trading in official channel. The demand from Chinese customers are huge: in 1H16 they are still ranked 3 rd among top exporting countries of Vietnam pangasius, but they have made into 1 st in the list in 1H17, accounting for c.17% of total Vietnam s export value. Question 4: Forecast sales to China in 2017? China is expected to account for 9% of our total sales in Question 5: Potential impacts of the Catfish Inspection Program (CFP) on exports to the US in 2H17? Vinh Hoan has coordinated with our clients and i-houses (official import inspection establishment approved by FSIS) to register for the inspection. Vinh Hoan s customers are also applying for FSIS s approval of their own storages as i-houses to mitigate the transportation and storage costs. In the initial months when CFP goes into full effect, certain delays are expected. Question 6: In the case if a certain company faces a warning or rejection from FSIS, how would that impact other companies export to the US? No such domino effect assumed, the warning or rejection only applies to that individual company. For further information, contact us at: ir@vinhhoan.com

18 Question 7: The difference between inspection process of FDA and FSIS? Difference in inspection scope: FDA inspected around 1-2% of the Siluriformes fish shipments to the US, while starting Aug 02, 2017, FSIS will inspect 100% of the Siluriformes fish shipments to the US. Question 7: Raw materials price trend? Due to unfavorable weather conditions (e.g. low temperature, extending rainy season), the raw materials pricing may go upward again in the coming months. Question 8: Profit forecast for 2H17? Q3 s average selling price: expected 5% increase vs Q2/17 Since the raw material costs made up 70% of the COGS, if there is no significant change in Q3 s raw materials pricing, we target a 5-10% increase in Q3 s profit vs Q2/17, Q3 s gross margin at c.16%, Q3 s profit at c.vnd170billion and Q4 s profit at c.usd190billion Question 9: Target for value-added products in 2017 and 2018? Approximately USD15million in 2017 and USD25million in 2018 Question 10: The environmental risk on Vietnam s pangasius industry? Vietnam pangasius is one of the fish with the most certifications in the world; GAP, BAP, ASC to name some. For customers who place environmental concern their first priority, Vinh Hoan is able to meet their orders with certified supply in the long term. Question 11: Revenue and profit of the subsidiary Thanh Binh in 1H17? Operations at workshop No.1 of Thanh Binh is on track, with normal capacity of MT (of raw materials) per day. In 1H17, the revenue reached 33% of the target, and we forecast a higher result in 2H17. Question 12: What is the sales strategy for domestic market? At the moment, the logistics and storage system for frozen seafood products in Vietnam is not fully developed. When the system catches up, we will consider expanding the domestic sales Question 13: Export markets of value-added products? The EU, Japan, China, the US, Canada For further information, contact us at: ir@vinhhoan.com

19 Thank you Disclaimer: All information and responses implying forecast or prediction for future events/data in this material is subject to Vinh Hoan s opinion and only serve as a reference source. It should not be taken as an investment recommendation. Vinh Hoan will not be held responsible in any way for investment decision made based on our forecast/prediction presented in this material. For further information, contact us at: ir@vinhhoan.com