DGC Flash note – OUTPERFORM

DGC announced Q3/2025 business results with NPAT reaching VND804 billion (+8.9% YoY and -9.6% QoQ), in line with our expectations. For 9M2025, NPAT increased 9.1% YoY to VND2,532 billion, fulfilling 84.4% of the full-year plan and 75.5% of our forecast. We maintain our 2025F and 2026F projections, but adjust our target price for 2026 to VND 108,000/share, representing a +19.4% upside from the current market price. Rating OUTPERFORM.

DGC recorded revenue of VND2,816 billion (+10.1% YoY) and NPAT of VND804 billion (+8.9% YoY). Revenue growth was driven by:
• Selling prices of DAP/MAP fertilizers remaining high QoQ and estimated to have increased by 35% YoY.
• P4 (yellow phosphorus) sales volume estimated to have grown by 10% YoY.
Meanwhile, gross profit margin fell to 31% from 34.4% in the same period last year due to: (1) higher electricity input costs (accounting for 25–30% of total COGS), rising 4.5% since May 2025; (2) P4 selling prices estimated to have decreased by 3% YoY; (3) sulfuric acid prices (used in fertilizer and animal feed production) estimated to have increased by 61% YoY.
As a result, NPAT growth was supported by: (1) financial income increasing 27.6% YoY to VND 192 billion; (2) selling expenses declining 41.3% YoY to VND 99 billion, lowering the selling expense-to-sales ratio to 3.5% from 6.5% in the same period last year, thanks to lower transportation costs.
For 9M2025, revenue reached VND8,521 billion (+14.4% YoY) and NPAT reached VND2,532 billion (+9% YoY). DGC continues to pursue the same strategy as in 2024, focusing on increasing P4 and fertilizer output, aligned with the context of China suspending DAP/MAP fertilizer exports from December 1, 2024. High DAP/MAP prices remain the main positive driver supporting 9M2025 results.
Outlook
Input electricity prices are expected to continue rising gradually. Meanwhile, China P4 prices in October have fallen by 3% MoM and are unlikely to increase significantly due to potential production expansion in China (currently operating at only 50% P4 capacity) and declining input production costs. For 2025, we maintain our forecast for DGC’s revenue at VND11,388 billion (+15.4% YoY) and NPAT at VND3,353 billion (+7.8% YoY), supported by the expectation that DAP/MAP fertilizer prices will remain high and that input VAT deductions for fertilizers will help offset rising electricity costs. Using the discounted cash flow method, we value DGC at VND108,000/ share by the end of 2026. However, in the medium to long term (2026F–2028F), DGC may benefit from the Nghi Son caustic soda project and its real estate development plans.