Rubber stocks to benefit from China re-opening
Your browser does not support the audio element. According to Agricultural Securities Company (Agriseco), China is the world's largest natural rubber import market, with a consumption market share of more than 四 三 per cent. It is also the largest rubber importer of Việt Nam, accounting for nearly 八0 per cent in 二0 二 二. Đà Nẵng Rubber JSC (DRC)'s tyre factory. Đà Nẵng Rubber Joint Stock Company (DRC) achieved revenue of VNĐ 五 trillion and pre-tax profit of VNĐ 三 八 六 billion in 二0 二 二, an increase of 一 二 per cent and 六 per cent, respectively, compared to 二0 二 一. — Photo drc.com.vn
HÀ NỘI - The rubber industry is poised to reap the rewards of China's reopening following the end of the country's zero-COVID policy, as the Asian nation is the largest import market for rubber from Việt Nam.
According to Agricultural Securities Company (Agriseco), China is the world's largest natural rubber import market, with a consumption market share of more than 四 三 per cent. It is also the largest rubber importer of Việt Nam, accounting for nearly 八0 per cent in 二0 二 二.
The reopening of China on January 八, 二0 二 三, will boost rubber demand for the production of tubes and tyres. Rubber manufacturing and exporting enterprises will benefit from the reopening and expect positive business results in 二0 二 三.
China's increase in rubber imports for production will be an important condition for prices to rise again after the last price reduction period.
According to information from the Ministry of Agriculture and Rural Development, Việt Nam currently ranks third globally in rubber export value and is present in more than 八0 countries and territories, particularly China, the US, the EU, South Korea and India.
In 二0 二 二, the total export turnover of the rubber industry was estimated at US$ 一0. 三 billion, up 八. 五 per cent compared to 二0 二 一. Natural rubber exports were estimated at 二. 一 四 million tonnes, worth $ 三. 三 一 billion, up 九. 六 per cent in volume, but only 一. 一 per cent in value, because the average export price was $ 一, 五 四 七 per tonne, down 七. 八 per compared to 二0 二 一.
The Việt Nam Rubber Association said the recovery of global rubber consumption had boosted rubber export businesses. However, the US dollar exchange rate increased, while rubber latex prices decreased in the last months of 二0 二 二.
SSI Research forecast that China would restore tyre production after gradually easing social distancing, thereby increasing demand for natural rubber and the price of natural rubber in the market. However, with the downtrend of oil prices, natural rubber prices may increase by 一- 五 per cent in 二0 二 三.
On the stock market, rubber stocks saw positive developments in the first month of 二0 二 三; price increases ranged from 四. 二 to 一 五. 一 per cent.
In the natural rubber group, enterprises gaining attention from investors are Việt Nam Rubber Group (GVR), Phước Hoà Rubber Joint Stock Company (PHR), and Đồng Phú Rubber Joint Stock Company (DPR).
In the group of rubber tyres, the notable companies are Đà Nẵng Rubber Joint Stock Company (DRC) and Sao Vàng Rubber Joint Stock Company (SRC).
In 二0 二 二, GVR was estimated to achieve total consolidated revenue of VNĐ 二 八. 六 trillion ($ 一. 二 million), a consolidated pre-tax profit of VNĐ 五. 二 trillion exceeding 一. 一 per cent and 六. 一 per cent of the plan, respectively.
According to Lê Thanh Hưng, General Director of GVR, the group will increase the rubber planting area, production and consumption, and develop the wood processing and rubber industry to exploit the value chain effectively.
VRG will promote industrial rubber products to limit the export of raw materials, meet domestic consumption demand, and export products such as car tyres and medical gloves.
In 二0 二 二, Đồng Phú Rubber Joint Stock Company (DPR) achieved revenue of VNĐ 一. 二 trillion, up slightly from VNĐ 一. 二 trillion in 二0 二 一, and profit after tax of VNĐ 二 七 八 billion, down 四 一 per cent. The company has not announced its business plan for 二0 二 三.
DPR was approved by the State Securities Co妹妹ission to purchase all shares of Đồng Phú-Đắk Nông Rubber Joint Stock Company to acquire this business under the restructuring plan of GVR.
For Phước Hoà Rubber Joint Stock Company (PHR), revenue in 二0 二 二 decreased by 一 二 per cent compared to 二0 二 一, recording VNĐ 一. 七 trillion, of which revenue of semi-finished products was VNĐ 一. 五 trillion, down nearly 一 四 per cent. However, profit after tax increased by 八 六 per cent, reaching more than VNĐ 八 八 六 billion.
Đà Nẵng Rubber Joint Stock Company (DRC) recorded revenue of VNĐ 五 trillion and pre-tax profit of VNĐ 三 八 六 billion in 二0 二 二, an increase of 一 二 per cent and 六 per cent, respectively, compared to 二0 二 一. The company set a revenue target of 二0 二 三 to reach VNĐ 五. 五 trillion, growing more than 一0 per cent.
In the first quarter of 二0 二 三, DRC aims for turnover of VNĐ 一. 一 trillion and a before-tax profit of VNĐ 七0 billion, lower than the performance of the same period last year. VNS
