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BSR Update – NEUTRAL
19/02/2025 - 2:23:59 CHBINH SON REFINING AND PETROCHEMICAL JSC (BSR VN)
BSR announced its Q4/2024 financial results with net loss of 89 billion VND (compared to NPAT of 2,406 billion VND in the same period last year), lower than our expectations. For the full year 2024, NPAT decreased by 93.2% to 585 billion VND, achieving 208% of the company’s adjusted plan and 19% of our forecast.
BSR reported Q4/2024 with revenue of 35,968 billion VND (-14.2% YoY) and a loss of 89 billion VND (compared to NPAT of 2,406 billion VND in the same period last year). Although sales volume increased by 3% YoY, the slump in revenue and NPAT was mainly attributed to a significantly narrower crack spread (the difference between crude oil prices and product prices).
For the full year 2024, BSR achieved revenue of 123,027 billion VND (-16.5% YoY) and NPAT of 585 billion VND (-93.2% YoY). This decline was due to: (1) a 10% YoY decrease in sales volume stemming from the 5th plant maintenance starting from March 15 to May 1, 2024 (48 days), (2) a 2.3% YoY decrease in the average Brent oil price in 2024, leading to a reduction in crack spread and 3) negative gross profit margins of Ron 95 & 92 gasoline at -4.5% and -7.1%, respectively.
Regarding the refinery upgrade and expansion project, BSR plans to complete FEED design (by May 2025), approve EPC bidding documents, select EPC contractor and prepare the site for construction in 2025.
For 2025, BSR targets to achieve revenue of 107,003 billion VND (-13% YoY) and NPAT of 752 billion VND (+28.5% YoY).
The average Brent oil price is projected to decrease by 8.1% YoY to 74 USD per barrel in 2025 due to impacts from the U.S. President Donald Trump’s potential policies. With the current oil price around 75 USD per barrel, we believe BSR’s 2025 business results will gradually recover from the low levels in 2024, as oil prices are unlikely to decrease much further and BSR is not undergoing plant maintenance. However, the performance will still be lower than the 2021-2023 period.
We forecast BSR’s 2025 results with revenue of 124,412 billion VND (+1.1% YoY) and NPAT of 1,993 billion VND (+241% YoY). Using the discounted cash flow method, we estimate BSR’s valuation by the end of 2025 at 20,300 VND per share, equivalent to a total return of 2.5%.
