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PLX Update – NEUTRAL
01/08/2024 - 4:20:39 CHVietnam National Petroleum Group (PLX VN)
PLX announced its Q2/2024 business results with NPAT-MI reaching VND1,199 billion (+47.5% YoY and +11.7% QoQ), higher than our expectations. Cumulatively for 6M2024, NPAT-MI increased by 58.6%, reaching VND2,272 billion, completing 101.5% of PLX’s annual plan and 56% of our full-year forecast.
PLX recorded revenue in Q2/2024 of VND73,836 billion (+12.3% YoY) and NPAT-MI of VND1,199 billion (+47.5% YoY). This increase in revenue and profit was due to:
- Stable domestic selling volume, increasing by 0.5% YoY to 2.67 million tons.
- Gross profit margin increased to 6.2% from 5.9% in the same period, thanks to the increase in Regulated costs in the petrol price formula (applied from July 2023). In particular, the regulated cost for gasoline increased by 2.9% and diesel increased by 6.8% compared to the last adjustment from 2014.
- Other profit increased from VND50.6 billion in the same period to VND134 billion.
With this result, PLX recorded 6M2024 results with revenue of VND148,943 billion (+11.8% YoY) and NPAT-MI of VND2,272 billion (+58.6% YoY). In addition to the above factors, PLX also benefits from: (1) more stable gasoline sources, (2) many petroleum distributors and wholesale business had their licenses revoked and fined, (3) costs factor petrol price formula in are adjusted more regularly and appropriately.
Regarding the outlook for the 2H2024: in July 2024, gasoline prices movement are more positive than in June 2024. In addition, on July 4, MOIT approved an increase in the Regulated cost applied in the basic price formula for gasoline and oil, in which RON95 gasoline increased by 5.6% and diesel increased by 13.6% compared to the previous adjustment (July 2023). This increase will actively support the operations and business results of gasoline and oil wholesalers and distributors such as PLX. In addition, the draft amendment to Decree 80/2023 also has many support points for major petroleum wholesaler such as PLX.
Quick comment: With the new regulated cost, we adjust our 2024 revenue/profit forecast to increase by 1.8% and 5.9%, respectively, in which revenue expected to reach VND294,863 billion (+7.5% YoY) and NPAT-MI at VND4,023 billion (+35% YoY). Our target price for PLX by the end of 2025 is VND47,500/share, equivalent to a total profit margin of 7.1%.
View details in the attachment below.
