Revenue and Net Income Development of NTP by Quarter Since 2019
Despite a significant revenue decline, the net income of Tien Phong Plastic Joint Stock Company (HNX: NTP) only slightly decreased by 8%, recording 109 billion VND. This is mainly due to several reasons.
Firstly, the plastic manufacturer maintained a stable gross profit margin compared to the same period last year, at around 28.9%. However, this margin decreased compared to the last quarter of 2023 (33.2%). The main driver in Q1 2024 was still revenue from the sale of semi-finished products, including plastic pipes and accessories, with 900 billion VND.
Secondly, compared to the same period last year, interest income from deposits and loans brought NTP over 10 billion VND. Interest expenses of 13 billion VND decreased by more than half. The same is true for payment discounts and deferred sales revenue, which amounted to 7.5 billion VND.
Finally, selling and administrative expenses narrowed by 30%. NTP spent only 142 billion VND on these expenses in the recent period, compared to 202 billion VND in Q1 2023.
 Source: VietstockFinance
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There were no significant changes in NTP’s balance sheet after the first 3 months of 2024, except for non-term deposits and short-term receivables from customers, both of which decreased by around 200 billion VND, amounting to 252 billion VND and 682 billion VND respectively. Debt also decreased accordingly, mainly due to repayments on loans and short-term financial leases, to 1.4 trillion VND at the end of the period.
NTP’s net cash flow from operating activities after Q1 reached only 127 billion VND, significantly lower than the 932 billion VND in the same period in 2023. This is largely due to the Company’s payment for inventories and accounts payable, totaling 242 billion VND, while last year it recorded 573 billion VND.
At the end of Q1 2024, receivables from customers of Tien Phong Plastic JSC Southern Branch amounted to 369 billion VND, accounting for more than 50% of NTP’s total accounts receivable. This is an associate company in which NTP holds 27.39% of the shares.
NTP has not yet disclosed detailed information about its consolidated business plan for 2024. However, the plastic manufacturer is expecting a pre-tax profit of 555 billion VND for its parent company, which is 13% lower than its performance in 2023.
This cautious outlook is due to the fact that policies for the real estate sector, such as the control of real estate corporate bonds and credit “room” for lending to the real estate sector, have not yet been resolved, which will reduce construction demand and subsequently make it difficult for demand for plastic pipes to grow significantly.
In addition, NTP believes that the price of key raw materials such as PVC powder, HDPE resin, and PPR resin is currently low and is unlikely to rise significantly as it did in the final months of 2021. Therefore, there will be no increase in revenue due to price increases. If the price of raw materials remain at current levels, the company may consider further price reductions on some product lines to remain competitive.
To achieve this year’s production plan, the company, which holds over half of the plastic pipe market share outside the North, said it will focus on promoting sales of new product lines, organize seminars to introduce products, and establish distribution systems in weaker regions.
According to data from Future Market Insight, the size of Vietnam’s plastics market is estimated to reach 10.9 million tons in 2024 and is projected to reach 16.3 million tons by 2029, representing an average growth rate of 8.4% per year during the period. This year, the construction plastics sector is therefore expected to increase slightly. In the near future, this segment is expected to drive the growth of the industry and account for about 25% of the total plastics industry.
