After 8 months, Tien Len Steel has exceeded 55% of the annual profit plan.
Tien Len Steel Joint Stock Company (Code: TLH) has just announced its business results in August with consolidated net revenue of VND 291 billion, down 13% from the previous month.
Revenue from financial activities increased to 3 billion dong, while July only reached 854 million dong. Profits from joint ventures and associates increased by 73% compared to the previous month to nearly 2 billion dong.
As a result, Tien Len Steel’s after-tax profit reached VND33.4 billion, down 12% from the previous month. Accumulated in the first 8 months of the year, Tien Len Steel’s net revenue reached VND 3,001 billion, profit after tax of VND 388 billion. Thus, the company has achieved 60% of the revenue target and exceeded 55% of the annual profit plan.
According to Mirae Asset (Vietnam), besides the growth engine of the domestic construction industry, the gradual removal of social distancing in major markets such as North America and Europe has helped Vietnam’s steel industry benefit greatly.
However, not to mention the impact of the COVID-19 epidemic, Mirae Asset believes that a too high steel price will slow down the construction industry and public investment. In fact, many businesses have decided to postpone construction to wait for the decision to offset the price of materials, which can slow the progress from 6 to 18 months.
Resonance with the impact of the epidemic will create oversupply pressure on domestic steel manufacturing companies in the last 6 months of 2021, leading to a divergence in growth.
In general, however, Mirae Asset believes that 2021 is still a year of positive growth for companies in the industry, the post-COVID-19 recovery demand will support the industry in the period of 2022 onwards. Vietnam’s steel industry is currently at P/E and EV/EBITDA of 9.2 times and 5.6 times, respectively, 36% lower than the average of the steel industry in Asia.
At the end of the trading session on September 10, Tien Len Steel’s TLH stock fluctuated around VND21,100/share. Compared to mid-July, the share price has increased by 50%.
Source: vietnambiz.vn – Translated by fintel.vn