US tariffs overshadow plastics major An Phat Holdings' AGM agenda

An Phat Holdings, a leading maker of high-tech and environmentally-friendly plastic products in Vietnam, says it is preparing for a challenging year as the company's industrial park business and exports to the U.S. will be affected by President Trump's reciprocal tariffs.

"An Phat Holdings will continue to face many challenges in 2025," Pham Do Huy Cuong, a board member and CEO, told the company's (HoSE: APH) 2025 AGM on Wednesday.

Global economic growth is forecast to slow down, leading to a decline in consumer demand. Moreover, geopolitical tensions and increasing trade protectionism increase the risk of trade defense tariffs, which may affect the group's export markets.

Therefore, An Phat Holdings sets a consolidated revenue target of VND9,179 billion ($353 million) and after-tax profit for the parent company shareholder of VND60 billion ($2.31 million) in 2025, both lower than the 2024 results.

The group plans to reduce its ownership in the plastic resin trading business from Q2/2025, thereby reducing consolidated revenue.

As a result, planned profit will drop due to the restructuring of the non-core investment and increased depreciation costs of the eighth plant which was recently put into operation, the company said in a report.

Cuong noted that the U.S. administration's imposition of tariffs will certainly affect the group's industrial park segment.

“All research activities to make investments in Vietnam have slowed down after President Trump announced the tariffs. Foreign investors will wait for the rate to be finalized. Only when the rate is defined, the board of directors can clearly assess the impacts,” he told shareholders.

An Phat Holdings is implementing two industrial real estate projects: the 46-hectare An Phat High-Tech Industrial Park (An Phat Complex) in Hai Duong province and the 186-hectare An Phat 1 Industrial Park (phase 1) in the communes of Quoc Tuan, An Binh and An Lam of the same province.

In October 2024, the group acquired Luong Dien Ngoc Lien Industrial Park JSC, thereby owning the industrial park of the same name. By the end of 2024, it had invested nearly VND1,000 billion ($38.46 million) in basic construction costs for this project.

An Phat Holdings' export to the U.S. is also affected by the tariff information. Cuong said that the U.S. market accounts for 7% of the group's revenue and the tally is expected to increase to 10% in 2025.

"There will definitely be impacts from the U.S. imposition of tariffs. We will continue to find alternative markets," he added.

The group's CEO said that the revenue in Q1 is expected to reach VND3,900 billion ($149.84 million), up 15% year-on-year. Pre-tax profit hit VND46 billion ($1.77 million) and after-tax profit for the parent company shareholder VND10 billion ($384,700), both down over 72% and 76.2%, respectively.

With these results, An Phat Holdings completed 42.4% of the year's revenue target, but only reached nearly 17% of the profit plan.

In the context of the industrial park business and exports to the U.S. affected by the information on reciprocal taxes while the plastic pellet trading segment to see reduced ownership from Q2, shareholders asked the company's leaders about the driving forces to help the group erase the accumulated undistributed loss of more than VND74.8 billion ($2.88 million) in 2026.

In response, CEO Cuong only said that the accumulated loss situation is expected to be resolved by the end of 2025 or early 2026.

Regarding the plan to cooperate with South Korea's SK Group to build a factory to produce biodegradable material PBAT (polybutylene adipate terephthlate), chairman Nguyen Le Thang Long said that the group initially wanted to build the factory on its own and produce PBAT (the project stopped in September 2024), but then accepted an invitation from SK to build the factory with a capacity of 70,000 tons.

"This is an opportunity for the group to join such a giant as this project requires financial resources, human resources, and R&D," said Long.

An Phat Holdings participates in the project through its subsidiary PBAT An Phat Company. As of October 2024, PBAT An Phat contributed 5.1% of capital to Ecovance Vietnam Co., Ltd., while SK holds the remaining 94.9% stake.

At the 2025 AGM, shareholders asked why An Phat Holdings' biodegradable recycled plastic products had not appeared in supermarkets, chairman Long said that the new Environmental Protection Law from 2022 built a roadmap for conversion.

Accordingly, from 2024, biodegradable products will officially be deployed in supermarkets. However, the eco-label will not be applied until the end of 2024. The group has registered for it since October 2024, but the use of such products is not yet mandatory.

Long said: "The roadmap for mandatory use of these products is expected to start from January 2026. The group will continue to monitor the Ministry of Agriculture and Environment's new plans and expect everything to be clearer in 2026."