Expanding the Chinese market, Vinh Hoan Corp boost other categories to compensate for pangasius loss
Vinh Hoan Corp plans to expand other market shares to compensate for pangasius on the start of downward trend. Vietnam has just connected with new fisheries customers in China and and plans to increase revenue by 35% in this country
Vietnam exported 298,000 tons of pangasius in the first four months, down 28% from the same period last year. And as such, a total USD 724 million worth was achieved, down 40% from the same period last year. This is due to low demand, shipping congestion, and the on-going Zero COVID in China.
Vietcombank Securities (VCBS) said that inflation in the US was cooling down. This might trigger consumption in this country. Besides, the end of quarter II is the time for local retailers to stockpile for busy shopping during the year end festival. This will also drive an increase in pangasius prices in North America.
In China, a short supply of fish fries and pangasius material was reported in Feb 2023 as processing businesses started to increase capacity by 15-30% as compared to earlier this year.
Moreover, there is an oversupply of ships and containers, the exportation of Vietnamese seafood to western countries will be enabled in 2023.
Forecasting the business result of Navico, VCBS supposed that Navico is having constant orders to assure 100% of the capacity until late June 2023. After the 19th Antidumping Duty Administrative Review, the Corporation will plan to boost their sales in the US and sell their key product at a double price as compared to former markets. This will help improve their profit margin.
Besides, Navico expects to increase prices in the Chinese market when inventories reduce and consumption goes up amid the local economic recovery. VCBS said that the Corporation has just connected with new customers in China and planned to raise revenue by 35% in this country.
As for Collagen and Gelatin (C&G), after completing stage 1 at the Amicogen factory, Navico plans to continue stage 2 and 3 to raise the capacity from 780 ton/year up to 1,200 and 2,400 tons/year, expecting to bring in 85 billion dong in revenue and 4,25 billion dong in profit in 2023.
Vinh Hoan Corp plans to stop rising prices and improve the product quality so as to enhance the competitiveness of pangasius. However, the Corporation still expects that demand for pangasius will recover in quarter IV when inventories reduce and the year-end festival demand in western countries is higher.
VCBS anticipates that Vinh Hoan’s revenue and gross profit will be 11,498 and 1,255 billion dong in 2023, down 13% and 38% respectively year on year. In 2022, Vinh Hoan built the Surimi factory to produce crab sticks, with a capacity of 5,000 tons/year, contributing to the revenue of Vinh Hoan’s value added products up to 95 billion dong this year.
Vinh Hoan Corp plans to expand other segments to compensate for the loss from pangasius sales on its downward trend. Thành Ngọc agricultural processing factory intends to launch commercial products in late 2023 and expects to bring in 350 billion dong in revenue and account for 15% of the gross profit margin.
Besides, the Corporation is planning to expand the production system of C&G factory which is expected to make 835 billion dong in revenue and 342 billion dong in profit in 2024, hence a double profit margin against the pangasius sector.
Leaders of Vinh Hoan Corp issued the plan of 2023 with 680 billion dong revenue, up 2.5 times and 153% year on year.
VFM
