Vietnam firm Son La Sugar reaches $88 mln in market capitalization

Shares in Son La Sugar JSC (SLS) finished at VND212,100 ($8.8) per unit on Monday, up 73% compared to the beginning of the year and bringing its market capitalization to VND2.12 trillion ($88 million).

SLS shares surged after news that India had banned sugar mills from exporting sugar from the next crop of the year, which coincided with anti-subsidy and anti-dumping policies against sugar from Thailand taking effect.

Son La Sugar JSC, formerly known as Son La Sugar Factory, was established in 1995. Its main products are sugar A1, A2, B, C and molasses sugar which are distributed directly to confectionery companies like Hai Ha Confectionery JSC, Hai Chau Confectionery JSC, Kim Ha Viet Co., Ltd., and Mocchau Dairy Cattle Breeding. The company's main market is Hanoi, accounting for 75% of output.

On October 16, 2012, Son La Sugar shares were officially floated on the Hanoi Stock Exchange (HNX) with the code SLS.

Son La Sugar JSC recorded net revenue of VND550 billion ($22.9 million) in Q4 of the fiscal year 2022-2023 (April-June), up 152%, and after-tax profit of VND225 billion ($9.4 million), up 261%.

In the fiscal year, the company earned net revenue of over VND1.68 trillion ($69.8 million), up 93%, and post-tax profit of VND523 billion ($21.8 million), up 179%.

This record profit was made possible because of a corporate income tax exemption for agricultural product processing activities in Son La province, a locality experiencing extremely difficult socio-economic conditions.

As of June 30, SLS's total assets had reached VND1.34 trillion ($55.8 million), of which cash and cash equivalents stood at VND116.2 billion ($4.8 million), up 17 times compared to July 1, 2022.

From September 2022 onwards, the anti-subsidy and anti-dumping policies for cane sugar originating from Thailand has positively impacted sugar enterprises in Vietnam, the trade ministry report said.

The business picture for the sugar industry in the fiscal year 2022-2023 shows that it is gradually recovering with increased consumption and revenue. However, the recovery is also being hampered by the pressure of increased costs, especially interest expenses and corporate management costs.

According to broker Tien Phong Securities, the world sugar price has fluctuated at around $520 per ton in 2023 due to a supply shortage caused by adverse weather in some sugar-exporting countries such as Brazil, India, Indonesia and Thailand; the Russia-Ukraine conflict; and the trend of increasing bio-alcohol production from sugarcane. In the crop year 2023-2024, the global supply and consumption of sugar is forecast to reach about 178.8 million tons and 178.9 million tons, respectively.

High global sugar prices have had a positive impact on domestic sugar prices and consumption has remained positive. Compound annual growth of around 5% in terms of value is expected in the 2023-2028 period.