AN PHAT PLASTIC (AAA): 2016 Q3 FINANCIAL AND BUSINESS RESULTS AND Q4 PLAN
2016 Q3 FINANCIAL AND BUSINESS RESULTS
AN PHAT PLASTIC AND GREEN ENVIRONMENT JSC
(Security code: AAA)
Dear Shareholders and Investors,
An Phat Plastic and Green Environment JSC would like to announce ‘Report on 2016 Q3 Results and Q4 Plan’, details as follows:
I. 2016 Q3 Results
In the third quarter of 2016, the Company maintained the volume of orders, production capacity and effectiveness of the machine, as well as optimized cost control. As a result, the Company has accomplished the Q2 plan set forth.
According to estimates, the volumes sales of the Company in third quarter of 2016 reached 18,831 tons, 4,3% higher than 2016 Q2 (18,062 tons). Revenue is estimated at VND 526.4 billion, up 1.8 % from 2016 Q2 (VND 517.2 billion). Profit after tax is estimated at VND 35 billion, up 3.2% compared to the Q2 of 2016 (VND 33.9 billion).
In comparison with the 2015 Q3 results, production grew 26.8% (from 14,846 tons), revenue rose 12.4% (from VND 468.1 billion) and net profit increased 75.9% (from VND 19.9 billion).
At the end of the third quarter, the Company has produced 51,122 tons, generated VND 1,468 billion of sales and completed 70.2% of the target revenue (VND 2,100 billion) and gained 97.3 billion of profit, equivalent to 97.3% of target profit (VND 100 billion).
II. 2016 Q3 Company Updates
1. Construction of Factory No. 6 and No. 7
The Company has speeded up construction progress of Factory No. 6 and No. 7. The first phase of the Factory No. 6 – Factory 6A has been completed in June 2016. At the moment, machinery has continuously been installed for trial operation and complete production lines. The average output of trial operation reached 300 tons/month. The second phase of Factory No. 6 – the Factory 6B has finished construction, the Company has been procured and install machinery to keep up with the schedule. Besides, administration building and lake is in progress.
Constructed at the same time with Factory No.6, the projects of Factory No.7 has finished wall and roofing, and floor is in progress, expected to complete and go into operation in 2016 Q4.
2. Private placement of corporate bonds
On September 6th 2016, the Company signed a Bond investment contract with Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) - Hai Duong Branch. The issued bonds are inconvertible and secured corporate bonds with a total value of VND 150 billion, for a period of 5 years. The interest rate applicable to the first year is 7% and floating in the following years. Funds obtained from the bond issue would be used to increase the working capital of the Company, serving the construction project Factory No. 7. According to issue announcement released on September 12th, the total 150 corporate bonds of An Phat Plastic and Green Environment JSC have been possessed by credit institutions.
3. An Phat Plastic and Green Environment Joint Stock Company Roadshow in Hochiminh City
Recently, despite that the Company has focused on IR activities to provide sufficient and accurate information for investors interested in production and business status of the Company by organizing investor conferences, in which investors were invited to visit the Company to directly learn about the product and gain deeper insight of typical production of the Company. However, a lot of investors in the South was unable to attend the event due to unfavorable conditions. Thus, on July 22th, the Company held an event, An Phat Plastic and Green Environment JSC Roadshow, to make direct contact and discussions with investors in Hochiminh City.
During the event, the Company's leaders openly answered all the questions of investors and shared about the goal of becoming the biggest packaging manufacturer in Southeast Asia and development plans until 2019. Accordingly, the Company expected profit growth of about 38%, revenue and profit after tax would be respectively VND 4,000 billion and VND 300 billion at the time the plant No. 6 and No. 7 operating at full capacity in 2019.
The plan was built based on careful assessment of the Company's strategic product, production capacity, and market demand to ensure no wastage. To take advantage of Vietnam joining the TPP, the Company is redirecting exports from the European market to the Japanese market. In respect to the Japanese market, products create large profit in spite of high demands on product quality and strict regulations on hygiene standards. Also, in order to match consumption trends of environmental-friendly products, the Company has developed biodegradable bags and considered it as strategic item of the future. Traditional customers of the Company now accounts for 79% of the customers, and big demand of this group is the motivation for the Company to expand production.
4. Major customers visited the Company
During the third quarter of 2016, the Company has welcomed large customers to visit and sign contracts with the Company, especially the traditional customers from Japan as Hanwa, Mitsubishi, Sojitz, Itochu, Japacks, etc or major clients from Europe and USA as Evenplast, Comcoplast, Dollar General, etc. In particular, Japanese customers had a deep impression on the the responsible attitude and working style of the workers, comfortable working environment in factories which were equipped with efficient cooling system and kept in clean conditions, as well as the production process to ensure quality and meet typical high standards of consumption goods in the Japanese market.
Major clients from Europe, USA and Japan expressed their desire to increase the volume of orders for their importing navigation from the Chinese market which offered competitive price to potential market of Vietnam. After verifying the quality of products and production process of An Phat along with discussion on the particular requirements of the product, the partners had full confidence in the production capacity and quality of An Phat. As a result, customers made proposals to raise purchase volume, which created incentives for investment projects of An Phat.
III. Q4 Plan
1. Production, Revenue and Profit
The fourth quarter annually is the peak time of production and business of the Company because of highly increasing demand and consumption on big holidays. Based on existing production capacity, the number of orders and forecasts of market performance in the end of the year, the Company set out the plans of 2016 Q4 with the following specific criteria:
- Production: 20,454 tons
- Revenue: VND 634 billion
- Profit: VND 42 billion
2. Progress of transferring listing from HNX to HOSE
The Company transfers the listing exchange so as to seek opportunities to cooperate with potential partners and investors currently trading on Hochiminh Securities Exchange. In the last quarter, the Company has implemented obtaining shareholders’ opinion in written ballots and received majority approval on the plan to transfer the listing from Hanoi Securities Exchange (HNX) to Hochiminh Securities Exchange (HOSE).
In July, the Company applied for transfer listing to Hochiminh Securities Exchange and received in-principle approval from the exchange. Currently, the Company is in the process of finalizing additional document and perform necessary procedures to delist on HNX for listing on HOSE. As expected, the Company will complete the transfer in October of 2016.
3. Accelerate completion of Factory Projects No. 6 and No. 7 to put into operation this year
Factory No. 6 is rushing to complete phase 2 in parallel with the construction of Factory No.7. Machinery installation and test running of the Factory 6B is expected to start in the fourth quarter. This factory applies the most modern and advanced technologies of the Company with high standards of hygiene and quality, and fully meet the standards of food packaging and health care products manufacture. It is about to manufacture new product lines of high quality and large profit margins to bring about huge profits for the Company.
The operation of the two factories will double production scale of the Company, raising the total design capacity of the Company to 96,000 tons/year, enabling the Company to become the largest plastic packaging manufacturer in Southeast Asia.
IV. Stock price movement with positive outlook
Following the positive performance in the second quarter, AAA share price in the third quarter peaked at VND 35,800 on August 1st. After the peak, AAA stock prices has witness fluctuation but still recorded an increase compared to the last period. The closing price of AAA share in the trading session on September 30th on Hanoi Securities Exchange was VND 31,100/share, up 3.7% compared to the last trading session of the second quarter.
|Indicators||2016 Q3||2016 Q2||Growth|
|Average Trading Volume/ day (share/day)||407,203||577,985||-29.6%|
|Net Foreign Purchases/ Sales (share)||-1,377,220||157,600|
|Closing Price (VND)||31,100||30,000||+3.7%|
NGUYEN LE TRUNG