AN PHAT PLASTIC (AAA): 2016 CHAIRMAN'S LETTER
Dear Shareholder and Investors,
We have just gone through one year that is regarded as the most difficult year since the shares AAA was listed on Hanoi Stock Exchange.
The sharp and rapid decrease of oil in the late 2014 made The Company fall into a difficult situation because many customers asked for reducing the price to share risks with their inventory. To ensure market shares and maintain customers, we decided to share difficulties with customers and bear a loss in Quarter 4/2014 and Quarter 1/2015.
By the end of the first half of 2015, we had more than 1 billion loss and trading result only really recovered from Quarter 3/2015. Outgoing volume increased over the months and reached a record of 3,800 tons in October, 2015 and keep growing next months. For the whole of 2015, we estimated consolidated revenues reached 1,500 billion and profit after consolidated tax was 50 billion.
Although the oil price fell which made product price decreased, revenue was still remained thanks to flexible sales strategies that helped to keep market and customers. To overcome the difficulties, we must thank to loyal customers and new clients from Japan increasing purchasing orders in the past year.
Decrease of oil price is such a valuable experience to the Board of Management and our staff. In the period of the deep price fall, we and customers have found a common ground on decision of prices according to input cost when big fluctuations occur so as to avoid negotiating again with customers as before. This solution helped us to limit risks ultimately when oil price falls abnormally and also avoid loss for the company.
Up to now, we are having Factory No5 in Hai Duong; other factories are running almost full capacity. Many customers, especially Japanese customers visit An Phat weekly and want to increase orders but we cannot produce more. To meet with the urgent demands together with transference trend which can be considered as a golden opportunity, “China+1” of many customers, we decided to build another factory with capacity of 37,000 tons/year on the current land of the Company. The new factory is invested properly with modern machines to serve and meet with customer’s demand.
Development orientation from 2016 to 2018
We have seen more optimistic factors in 2016 than last year. Which oil price continues decreasing help our input price fall relatively, increase capacity with low price for customer but profit still remains. Therefore, we expect to present to the coming Annual General Meeting 2016 by the plan:
Capacity is 52,800 tons, increasing 16,000tons compared with 2015
Consolidated revenue is 2,100 billion VND, increasing 600 billion Dong compared with 2015
Earning after consolidated tax is 100 billion VND, up 50 billion VND compared with 2015
Expected dividend payment: 15%/share in cash
With the new factory, we are determined to boost the company’s sales, particularly in Japanese and US market. Looking forward to 2018, we expect to become a plastic packaging exporter with revenue of over 150 million USD, even Chinese manufacturers also want to be. We do expect profit will group faster than increase of capital and ensure shareholders not to concern much on risk.
Japan is a huge market with a more convenient geographic position than European market and also joins in TPP, so we are increasing exporting volume to this market that will contribute 45%-55% of company turnover until 2017.
Besides, we are doing a research on new products with high quality and technology such as food bags. Demand of bags is increasing more and more but production capabilities of Vietnamese enterprises are still limited. We are researching and studying toward such products with high profit margin.
We have received your feedback when you visited our company. Although the company has been listed on the stock market for 6 years, information about operation and company scale has not been known much. This is a shortcoming of shareholder relationship team. We are currently improving shareholder relationship, editing content of shareholder relationship on website. We also intend to provide information more frequently for investors through website or they can contact us through an email address of Secretariats- email@example.com.
Again, we would like give New Year greeting to you. I hope that you will always be with Board of Management and staffs of company to achieve target of 150 million dollars in next 3 years and AAA becoming blue chip on stock.
PHAM ANH DUONG