Century Synthetic Fiber Corp. targets 38% profit growth, bets on recycled fiber

Century Synthetic Fiber Corporation (HoSE: STK) aims for a 37.7% increase in 2026 pre-tax profit to VND128.5 billion ($4.88 million), driven primarily by its recycled fiber segment and a newly operational plant invested by its subsidiary Unitex.

The plan was approved on April 17 at the company’s 2026 annual general meeting of shareholders, where all proposals were passed.

Chairman Dang Trieu Hoa said the company’s 2025 performance was anchored in stable orders with high added value, particularly for environmentally friendly products such as recycled, colored and specialty fibers. Operational efficiency also improved, with tighter cost control and reduced waste.

Those efforts translated into solid financial gains. Revenue in 2025 reached VND1,353 billion ($51.41 million), up 11.8% year-on-year. Gross profit rose 67.5% to VND273.3 billion ($10.38 million), while net profit surged more than fourfold to VND49.99 billion ($1.9 million). Domestic sales accounted for 60% of revenue, with exports making up the remaining 40%.

The chairman disclosed that STK targets revenue of VND2,366 billion ($89.9 million) in 2026, a sharp 74.9% year-on-year increase. A key growth engine will be phase 1 of the Unitex plant in the southern province of Tay Ninh, which has a designed capacity of 36,000 tons annually. The facility, with a total investment of VND3,379 billion ($128.4 million), officially came online on January 23, 2026.

Market conditions, however, remain challenging, he noted, citing since early March, prices of PET resin and PET fiber have jumped more than 20% due to disruptions in petrochemical supply chains.

Despite this, STK has maintained stable supply for customers while adjusting selling prices in line with market movements, he said. Orders for the second quarter of 2026 have been secured since late March, with additional bookings continuing through April and May, Hoa revealed.

Recycled fiber is expected to contribute about 68% of total sales across its three plants: Trang Bang, Cu Chi, and Unitex. Meanwhile, the firm plans to issue more than 14 million shares to pay a 10% dividend for 2025.

The Unitex plant is currently operating at 60-70% of capacity, depending on market conditions. Phase 2 of the project may be delayed to ensure optimal performance of the first phase. “At this stage, it is still too early to discuss phase 2 given ongoing global and market volatility,” Hoa said, adding that the capacity could ramp up to 70-80% if input costs and demand improve.

Shifting to domestic financing to reduce currency risks

Another key issue raised by shareholders concerns the company’s financing strategy. In September 2025, STK arranged for its subsidiary Unitex to secure a VND1,413 billion ($53.69 million) loan from private lender OCB’s Tan Binh branch.

The funds are used to refinance and cover costs related to the Unitex project, with collateral including land-rent rights, facilities, and equipment in Tay Ninh. STK is guaranteeing the full amount.

A significant portion - VND993.2 billion ($37.74 million) - will be for refinancing existing loans previously obtained from five foreign banks: KasikornBank of Thailand, CTBC Bank, The Shanghai Commercial & Savings Bank, Entie Commercial Bank, and E.SUN Commercial Bank of Taiwan.

According to Hoa, the move is aimed at reducing exposure to U.S. dollar exchange rate risks. Although domestic borrowing may come with higher interest rates, it provides greater stability amid currency fluctuations.

On the Ho Chi Minh Stock Exchange (HoSE), STK closed Friday at VND13,800 ($0.52) per share.

Century Synthetic Fiber is one of Vietnam’s leading manufacturers of high-end polyester filament yarn, having built a strong reputation and brand presence in both domestic and international markets over more than 15 years.

The company has become a key supplier to premium fabric manufacturers that serve world-renowned brands such as Nike, Adidas, Uniqlo, Under Armour, Decathlon, Puma, and Guess.

One of the firm’s key advantages lies in its recycled yarn products. Despite ongoing market challenges, it has continued to record positive growth in the recycled yarn segment, with 2025 revenue increasing by 25.2% year-on-year.