Vietnam livestock giant Dabaco targets revenue of $1.04 bln in 2024

Vietnam’s leading livestock firm Dabaco said it targets to earn VND25.38 trillion ($1.04 billion) in revenue and VND730 billion ($29.94 million) in after-tax profit this year.

Dabaco, listed on the Ho Chi Minh Stock Exchange (HoSE) as DBC, set these ambitious plans in the context of its stock price surging from VND18,000 to VND27,000 ($1.11) since early November 2023.

At the same time, stock liquidity has also improved significantly, with more trading sessions recording up to 10 million units changing hands from only about 3-5 million previously.

This is the third consecutive year Dabaco has set a total revenue plan of over VND20 trillion ($820.4 million). Last year, it aimed for VND24.56 trillion ($1 billion). However, the revenue figure shown on the consolidated financial statements was only about VND11 trillion ($541.2 million) in 2021 and 2022 and VND8.5 trillion ($348.65 million) in the first nine months of 2023.

Dabaco is a livestock giant in northern Vietnam, owning a system of animal feed factories with a total capacity of 1.5 million tons per year and brands such as Dabaco, Topfeeds, Nasaco, Kinh Bac and Nutreco. The group has developed pig and poultry breeding farms across the country. It has also engaged in veterinary medicine and vaccines; invested in retail systems through supermarkets, Dabaco clean food stores, and real estate projects.

The livestock breeding and food processing segment has made the largest contributions to Dabaco's net revenue, with a proportion of up to 42%. It is followed by animal feed and raw materials for animal feed production. The real estate segment earns the company about VND1 trillion ($41 million) in revenue each year.

In the 2020-2022 period, Dabaco's revenue grew but profit shrank due to falling pork prices. The firm’s net profit reached only VND5.2 billion ($213,290) in 2022 and VND18.6 billion ($762,920) in the first nine months of 2023, representing sharp year-on-year decreases.

From the beginning of Q3/2023, live hog prices could not maintain the upward momentum of the previous quarter, falling from VND60,000 to VND50,000 ($2.05) per kilogram. This significantly affected Dabaco's business results in the last quarter of the year.

Broker DSC Securities attributed dropping prices to cheap products imported from Thailand and Cambodia, complicated African swine fever (ASF) developments, and falling consumption demand.

It forecast that the prices will recover from the first quarter of 2024 thanks to cooling inflation and improving demand prior to the Lunar New Year holiday (Tet).

In addition, the group's African swine fever (ASF) vaccine project is expected to bring in sustainable revenue from 2024.

DSC Securities said Dabaco completed field tests for three batches of ASF vaccine in farms in Bac Ninh in November. If licensed for commercial use, the vaccine will be produced on a large scale.

The ASF vaccine market holds great potential because there is only one commercial vaccine for this disease in the world, it said, adding Dabaco aims to not only circulate its vaccine domestically but also export it to major pig-raising countries.

With the nine-month business results and the falling pork prices in the last quarter, Dabaco is predicted not to complete the after-tax profit plan of VND569 billion ($23.34 million) in 2023.