AsemconnectVietnam - The market price of PTB shares of Phu Tai Joint Stock Company is higher than the forecasts of some securities companies, because investors expect the company's main business areas to grow again.

The wood sector has bottomed out
In the past 2 years, Phu Tai's revenue mainly came from production and trading activities of wood, stone, and Toyota cars, while real estate revenue decreased when existing projects were handed over and new projects are being implemented and cannot yet account for profits.
In 2023, Phu Tai's profit after tax will decrease by 48.3%, to VND259.4 billion, this is the lowest profit since 2016. Considering the gross profit of main areas: stone field increased by 2, 2%, up VND512 billion; The real estate sector decreased by 87.8%, to VND20.7 billion; Toyota automobile business decreased by 58%, to VND20.6 billion; The wood sector decreased by 29.4%, to VND558.3 billion.
Entering 2024, the wood production sector shows signs of improvement. According to data from the General Department of Customs, in the first 5 months of this year, Vietnam's export turnover of wood and wood products increased by 18% over the same period last year, reaching more than VND6 billion.
Some wood industry enterprises shared that consumption of goods in many large markets such as the US and Europe has shown gradually better signs, thereby promoting export orders.
At the 2024 annual general meeting of shareholders, Ms. Le Hai Lieu, Chairman of the Board of Directors of Duc Thanh Wood Processing Joint Stock Company, said: "Through many crises, the sinusoidal law is still very true. The wood industry has reached the bottom of the sinusoid. Currently, importers have used up all their inventory and have to place orders, even urgently, even though the economic situation is not optimistic in 2024. Up to this point (mid-May 2024), orders Duc Thanh Wood's is full until the end of August and if before the Company accepted every order, now is the time to select orders, only making good orders with high profit margins.
For Phu Tai, gross profit in the wood sector in the first quarter of 2024 increased by 19.2% compared to the same period in 2023, reaching VND185.9 billion.
The fact that the sector with the largest proportion of wood production is on the recovery path helps investors expect that Phu Tai's 2024 business results will grow strongly, despite the gross profit of other sectors in the first quarter of this year recorded a decrease compared to the same period last year: real estate sector decreased by 61.8%, to VND3.4 billion; The automobile business sector decreased by 49%, to VND3.2 billion; Stone products sector decreased by 0.5%, to VND104.7 billion.
Regarding the stone field, in the fourth quarter of 2023, Phu Tai increased the capacity of Dong Nai Quartz Factory from 200,000 tons/year to 450,000 tons/year to meet the needs of customers in the US and Korean markets due to the Competitors exporting to the US from the Chinese and Turkish markets are subject to anti-dumping taxes. In addition, the Company plans to participate in bidding to supply stone for infrastructure projects such as providing granite or marble for Tan Son Nhat Airport, paving stones for Long Thanh Airport.
At the end of the first quarter of 2024, Phu Tai reached VND108.4 billion in consolidated pre-tax profit, an increase of 42% over the same period in 2023. The company estimates that profit in the first half of this year will reach VND225.7 billion, increased 13% over the same period last year. Phu Tai's 2024 plan is to reach VND462 billion in consolidated pre-tax profit, an increase of 43% compared to 2023.
BIDV Securities Company (BSC) forecasts that Phu Tai's furniture and stone furniture segment will prosper in the period 2024 - 2025 based on increased consumption demand in export markets and the domestic market. , thanks to the real estate market showing signs of recovery and people's consumption improving.
In the field of real estate, Phu Tai invests in Phu Tai Central Life project, total investment of VND615 billion, area of 2,920 m2, providing 380 apartments (12 residential apartments combined with commercial and 368 apartments). The company expects to hand over apartments and record a sudden profit in the real estate sector in the second half of 2025. In early 2024, the Phu Tai Central Life project was opened for sale for the first time, with 121 apartments customers register to buy.
With the Phu Tai Residence project, as of December 31, 2023, the project has handed over 453 apartments, leaving 181 apartments. This project has an inventory of VND220 billion in unsold apartments or waiting for handover.
The stock market price is higher than some forecasts
From February 23 to June 21, 2024, PTB stock price increased nearly 40%, to 75,100 VND/share. According to data on iBoard of SSI Securities Company, PTB stock valuation according to P/E is 14.8 times and P/B is 1.7 times. Looking back at the period 2017 - 2022, PTB stock valuation is based on P/E from 4.6 - 9 times and P/B from 0.9 - 2.6 times.
Notably, at the end of March 2024, the target price in the next 1 year of PTB stock given by SSI was 64,800 VND/share.
Recently, BSC raised its target price for PTB shares by 2%, to 78,000 VND/share.
When making assumptions to value PTB shares, securities companies have forecast the recovery of wood production activities in the period 2024 - 2025, the recovery of stone production thanks to investment projects such as expanding Terminal T3, Tan Son Nhat Airport and Long Thanh Airport project, and forecasting cash flow from the handover of Phu Tai Central Life project in the second half of 2025.
Thus, the expectation of recovery in the wood and stone sectors and the possibility of sudden profits in the real estate sector by the end of 2025 have helped PTB stock price increase rapidly, leading to P/E valuation no longer attractive.
N.Nga
Source: VITIC/Tinnhanhchungkhoan