Plastics firm Binh Minh posts highest quarterly profit in 6 years

Binh Minh Plastics JSC reported a post-tax profit of VND280.7 billion ($11.94 million) in the first quarter of 2023, a new record since it became a subsidiary of Nawaplastic Industries, a member of Thailand’s Siam Cement Group (SCG), in 2018.

The figure was 2.2 times higher year-on-year and extended its positive growth cycle to five consecutive quarters.

The company, listed on the Ho Chi Minh Stock Exchange (HoSE) as BMP, earned net revenue of VND1.44 trillion ($61.24 million) in Q1, up 6%, according to its Q1 consolidated financial statement.

Ho Chi Minh City-based BMP aims to reach a revenue of VND6.36 trillion ($270.3 million) this year and an after-tax profit of VND651 billion ($27.7 million). By the end of the first quarter, the company had completed 23% and 43% of these targets, respectively.

In 2022, BMP's after-tax profit hit VND696 billion ($29.7 million), up 224%, and net revenue reached VND5.81 trillion ($247.7 million), up 27% over the previous year.

At Wednesday's closing session, the BMP share price stood at VND66,500 ($2.8) per unit.

Meanwhile, Tien Phong Plastic JSC (NTP) reported net revenue of VND1.32 trillion ($56.2 million) in Q1, up 17%, and after-tax profit of VND118 billion ($5 million), down 21% year-on-year.

According to NTP, in Q4, its profit received from associates in Q1 decreased by VND32 billion ($1.36 million) year-on-year.

In 2023, NTP has set a revenue target of VND5.88 trillion ($249.9 million), up 3%, and a pre-tax profit of VND535 billion ($22.8 million), down 5% compared to 2022.

In 2022, the company's net revenue reached VND5.69 trillion ($242.4 million) and after-tax profit hit VND480 billion ($20.5 million), up 18% and 3%, respectively.

On the Hanoi Stock Exchange (HNX), the NTP share price hit VND32,600 ($1.4) per unit at Wednesday's close.

In a construction plastic industry report, Vietcombank Securities (VCBS) predicts that the price of PVC resin, the main material used for making plastic pipes and wires, in the second half of 2022 and in 2023 will remain at a low price level in the range of $800-1,000 per ton, helping to improve profit margins among plastics enterprises.

According to VCBS, PVC accounts for 70% of the cost of all construction plastic sales. Vietnam sometimes has to import PVC due to a lack of supply, so prices fluctuate on global demand.

This is mainly due to a supply recovery in the U.S. and global inventories rising strongly due to the expansion of major enterprises. Large manufacturers in India, the U.S. and China invested in expanding PVC production in 2022. From now until 2026, PVC output is forecast to increase by 17% to 70 million tons per year.

China accounts for 50% of PVC production and consumption worldwide. PVC demand has declined in China due to a sluggish real estate market, of which PVC demand for construction in the country accounts for 62%.

VCBS is of the view that by the end of 2023, demand for PVC will continue to be weak, with the number of projects starting in China low (plastic pipes are generally used when projects are completed, which can take more than one year from the start of construction).