2024 BUSINESS UPDATE AND FORECAST
Dabaco Group is one of Vietnam's leading companies in the food production and processing sector, specializing in pork and poultry products. Additionally, DBC is involved in industrial park infrastructure development, urban area construction, and real estate business.
- 2024 Business update. DBC recorded Net revenue of 3,611 billion VND (+38.2% YoY) and Net Profit after tax of 239 billion VND (+36x YoY). Cumulatively for the whole year 2024, Net revenue and profit after tax reached 13,574 billion VND (+22.2% YoY) and 769 billion VND (+30x YoY), respectively, exceeding the business plan target by 5%. The profit after tax margin for 2024 is 5.7%, marking a recovery after the challenging period of 2022-2023, when the profit margins were 0.04% and 0.23%, respectively. In Q4/2024, DBC recorded after-tax profit margin of 6.6% is higher than the average for the entire year of 2024.
- 2025 Financial Forecast. Taking a conservative approach, we estimate DBC’s 2025 net revenue at 14,564 billion VND (+7.3% YoY) and net profit after tax at 976 billion VND (+27% YoY). The expected profit margin improvement of 1.03 percentage points will be driven by: (1) Continued high pork prices; (2) Low average feed costs; (3) Initial success in commercializing the ASF vaccine, which has high profit margins.
INVESTMENT THESIS
- High Pork Prices Support Business Performance. We assess the outlook for the pig farming sector as positive through at least the end of 2025. Live hog prices are expected to remain high due to: (1) Supply constraints caused by disease outbreaks and the time required for farmers to rebuild herds after natural disasters; (2) Strong demand for pork, driven by economic growth. On February 14, 2024, pork prices ranged between 68,000–73,000VND/kg, maintaining a high level and continuing the upward trend in the begin of Q4/2024.
- Favorable Input Costs. The prices of key feed ingredients, such as grains, remain at attractive levels for livestock businesses. While corn prices have risen recently, oat and soybean prices remain low compared to the five-year average. The 2025 supply-demand balance is expected to favor a favor supply surplus, supporting low raw material costs.
- Expansion of Large-Scale Farming for Efficiency and Biosecurity. DBC is accelerating the development of several large-scale pig farming projects, including: Quảng Ninh (5,200 sows); Thái Nguyên (5,000 sows); Bắc Kạn (3,000 sows); Hòa Bình; Quảng Trị. The company aims to expand its sow herd to 60,000 and gradually phase out small-scale household farming partnerships.
- African Swine Fever (ASF) Vaccine – A Potential Breakthrough. DBC’s Dacovet vaccine plant is awaiting product registration for commercialization. The plant is expected to begin commercial production in 2025, with a maximum capacity of 200 million doses per year.
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