At the seminar “Analysis and Investment in DPM Stock” held by Vietinbank Securities JSC (VietinbankSc) on the afternoon of October 14, Ms. Nguyễn Thị Hiền – Member of the Board of Directors of PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo) – estimated the business results for the first 9 months with revenue reaching VND 5,383 billion, fulfilling 93% of the annual plan, and profit of VND 1,130 billion, equivalent to 104.2% of the plan.
In addition, in the first 9 months, DPM’s Urea production volume reached 550,000 tons, equal to 73% of the plan, while consumption volume reached 528,000 tons, equal to 68%. Imported fertilizer volume in 9 months also reached 253,515 tons, equivalent to 101% of the annual plan.
Ms. Hiền stated that with the early completion of revenue and profit targets ahead of schedule, the company’s Board of Directors decided to retain 700,000 tons of finished Urea in 2009 and transfer it for consumption in 2010, thereby reducing the 2010 consumption target to 710,000 tons.
Answering investors’ concerns about operations, Ms. Hiền revealed that DPM’s management board is preparing a takeover plan after the completion of the Cà Mau Fertilizer Plant project in 2012, which will be submitted to the 2010 Annual General Meeting of Shareholders for approval.
DPM is also implementing the Cửu Long Trade Center project in Cà Mau with an investment of USD 18 million, which will commence operations and recognize revenue in Q1/2010; as well as the Urea production project using CO₂ emissions from the Phú Mỹ Fertilizer Plant, with a total investment of USD 27 million, expected to increase DPM’s production capacity by 60,000 tons of Urea per year once completed.
In the near future, DPM will develop an Office Building on Mạc Đĩnh Chi Street in Ho Chi Minh City with an investment of USD 13 million; and projects to produce NPK, SA fertilizers… at the Phú Mỹ Fertilizer Plant area.
Regarding the depreciation of Phú Mỹ Fertilizer Plant, Ms. Hiền said that the remaining VND 700 billion would be fully depreciated by Q1, Q2, or at the latest Q3/2010.
One topic of great interest to investors was the price of input gas sold by PetroVietnam (PVN) to DPM. According to Ms. Hiền, the committed price of USD 2.2 per million BTU will remain unchanged until the end of 2009.
From 2010 onwards, PVN will apply a new price aligned with market prices but will ensure that DPM’s return on equity is not lower than 14%. At the same time, PVN also committed to stable and permanent gas supply for the Phú Mỹ Fertilizer Plant. Thus, in 2010, when the plant’s depreciation is completed, the increase in input gas prices will not significantly affect the production cost of Phú Mỹ Urea.
Analyzing DPM stock, Mr. Huỳnh Minh Trí, representative of VietinbankSc, commented: “Operating in a fertilizer manufacturing sector with strong growth prospects, being a leading enterprise with a reputable brand over the years, Phú Mỹ Fertilizer promises sustainable growth in the future.”
Mr. Trí assessed that with steady growth in revenue and profit maintained at high levels, and a sound financial situation with P/E of 17.8x, P/B of 3.5x, ROS of 13.8%, and ROE of 20.4%, Phú Mỹ Fertilizer has built investor confidence to choose DPM stock as part of a long-term investment portfolio.
Currently, DPM stock is being traded with high liquidity and strong investor interest. The current price is around VND 49,000/share, which is relatively lower compared to VietinbankSc’s valuation of VND 54,980/share.
(Vietstock 15/10; Vietnam Economic Times 16/10)
