Vietnam Rubber Group’s stock price soars as Q4/2023 profit rebounds strongly

Vietnam Rubber Group’s stock price surged 58% in the past two months as its net profit reached VND1,164 billion ($47.45 million) in the last quarter of 2023, the highest level of the year.

The group, listed on the Ho Chi Minh Stock Exchange (HoSE) as GVR, recorded revenue of VND7,591 billion ($309.4 million) in Q4/2023, down 16.7% year-on-year since its main business lines - rubber latex production and trading, and wood production - saw revenue fall from VND7,572 billion to VND6,065 billion ($247.3 million), and from VND833 billion to VND660 billion ($$26.91 million), respectively, according to its financial statement.

However, the company’s financial activities prospered, with revenue expanding 43% to VND351 billion ($14.3 million) thanks to increased interest income from deposits and lending and a 42% decrease in costs to VND131 billion ($5.34 million).

At the same time, profits from joint ventures and associate companies increased from VND33.5 billion to VND85 billion ($3.47 million), and other activities from VND554 billion to VND649 billion ($26.5 million).

In 2023, the group reported VND22,080 billion ($900 million) in revenue and VND3,370 billion ($137.38 million) in after-tax profit, down 13% and 30% year-on-year, respectively.

Thanks to strong profit recovery in the last quarter of 2023, GVR rallied in the stock market. Closing the Friday session, this stock hit its ceiling price of VND26,650 ($1.08) per share, marking a surge of 58% from the VND16,900 recorded in early November 2023.

At the group’s year-end conference, GRV chairman Tran Cong Kha said that the rubber market in 2024 is yet to see positive signals in terms of selling prices and demand. “Objective factors affecting the group's production and business activities still linger,” he noted.

Therefore, GRV has set a year-on-year growth target of 2-3% or more in terms of revenue, profit and other indicators, he said.

Specifically, revenue and other incomes are expected to reach VND24,999 billion ($1.02 billion), a rise of 2.1% from 2023; while after-tax profit will hit VND3,437 billion ($140 million), up 0.9%.

The group aims to exploit 445,200 tons of rubber, purchase 75,290 tons and sell 520,490 tons, with the average latex selling price expected to reach about VND34.6 million ($1,410) per ton.

It is set to harvest 6,430 hectares of rubber wood, a year-on-year increase of 1.1%; and process nearly 1.25 million cubic meters of wood of all types.

The output of other industrial products such as gloves, conveyor belts, sports balls, mattresses and rubber pillows is expected to be equivalent to 92-106% of the 2023 figures.

The group is striving to have 245 hectares of new industrial park areas for lease, soaring 468% from last year.

Financially, the company's total assets may reach VND78,385 billion ($3.2 billion) in 2024, similar to the figure at the beginning of the year. Of which, cash and deposits will be VND16,900 billion ($688.95 million), an increase of VND1,300 billion.

Respective short-term and long-term loans are estimated at VND2,844 billion ($115.94 million) and VND3,735 billion ($152.3 million).