SSI Research: AAA waits for revenue from industrial parks

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SSI stated that the business results of An Phat Xanh Plastic in the first 6 months of the year decreased mainly due to lower oil prices and no new industrial park for lease.

Updating the first half of 2020 business results of An Phat Xanh Plastic JSC (Ticker: AAA), SSI Research analysts believe that AAA’s profit will recover in the second half of the year and 2021 thanks to the merger with An Vinh industrial packaging JSC and an improved industrial zone segment.

Specifically, AAA’s semi-annual financial report showed that net revenue and profit after tax decreased by 33% and 62%, respectively, compared to the same period last year, to VND 3,382 billion and VND 137 billion.

In which, revenue from industrial zone leasing decreased 94%, gross profit in this segment correspondingly decreased by 89% due to no new industrial park for lease.

According to SSI Research’s analysts, AAA has handed over 23,000 square meters of factory space to new tenants in the end of the second quarter of 2020 and expects to record this portion of revenue in the third quarter of 2020. In the second half of 2020, the company plans to hand over 100,000 – 150,000 m2 of industrial parks and factories in An Phat high-tech industrial park (IZ).

Along with that, AAA is also developing another industrial park named An Binh Quoc Tuan in Hai Duong province, with a land fund of about 180 hectares and an investment value of VND 1,273 billion, of which AAA owns 92% of the shares.

The site clearance phase for this industrial zone is expected to start in 2020, and can contribute to revenue starting from 2021. The estimated rental price for this project is 65 – 85 USD / m2 for 50 years.

On the other hand, the business results at the end of the second quarter and next year of An Phat Xanh Plastic are also supported by the merger of An Vinh packaging, according to SSI analysis team.

Specifically, last July, AAA Board of Directors recently approved a plan to increase its ownership in An Vinh Packaging Joint Stock Company, a member of An Phat Group, to 56.51% of its charter capital.

This consolidation is expected to take place in the second half of 2020. The main products of An Vinh include industrial plastic packaging used to package industrial products, such as agricultural products, fertilizers, and cement. The company has a capacity of about 9 thousand tons / year, and is currently operating about 60-70% of capacity.

Source: – Translated by