High output prices are expected to continue in 2025. In addition, investors expect Dong Phu Rubber (DPR) to benefit from increased compensation from land use conversion.
Dong Phu Rubber Stock: Expectations from rubber prices continuing to be high in 2025
High output prices are expected to continue in 2025. In addition, investors expect Dong Phu Rubber (DPR) to benefit from increased compensation from land use conversion.
The 2024 financial report of Dong Phu Rubber Joint Stock Company (stock code DPR) shows that the company had a year of business growth with revenue of VND 1,224 billion, up 17.6% over the same period, profit after tax of VND 344 billion, up sharply by 35.4% thanks to a sharp increase in output price of 37%, averaging about VND 48 million/ton. In December 2024 alone, rubber prices increased sharply to VND 55 million/ton. Positive rubber price developments helped the company's profits increase sharply, even though sales volume was nearly 12,500 tons, down slightly by 4% compared to 2023.
In addition, income from compensation and indemnity received in the second quarter of 2024 contributes to high profits in 2024.
In 2024, rubber export prices will increase significantly, fluctuating by 20-30% compared to 2023, mainly due to supply shortages and adverse weather conditions. Adverse weather conditions in major production areas in Asia (especially Thailand), Hainan, China's main rubber production area, suffered damage to an area of about 2.1% of China's total rubber area, while China's electric vehicle manufacturing industry gradually recovered and increased demand for tires. This trend is expected to continue in 2025.
According to VCBS calculations, DPR's output rubber price will remain at over VND38 million/ton in 2025. With an average exploitation yield of over 2 tons of rubber/ha, we expect the rubber product business segment to bring over VND900 billion in revenue to DPR in 2025.
Accordingly, the rubber segment will be the main driving force contributing to DPR's business results. Meanwhile, the industrial park segment is expected to slow down due to slower-than-expected approval of investment policies for industrial park projects (expected in the fourth quarter of 2025, but in reality, it will be transferred to 2025-2026), so compensation for self-developed projects Bac Dong Phu expansion and Nam Dong Phu expansion will also be delayed to 2026-2027.
In early January 2025, the Bac Dong Phu Industrial Park expansion project was approved for investment policy. It is expected that phase 1 of the project, with a scale of 133 hectares out of a total of 317 hectares, will start construction in the first half of the year.
Securities companies predict that progress will be fast because they can take advantage of the existing infrastructure and human resources of the existing Bac Dong Phu Industrial Park.
As for the Nam Dong Phu Industrial Park expansion project, it is known that it is being submitted to the Prime Minister for approval of the investment policy. Currently, the project has been allocated 75 hectares out of a total area of 480 hectares.
When the industrial parks come into operation, they are expected to bring in a fairly abundant and stable land rental income stream for DPR.
Investors expect DPR to benefit strongly from increased compensation from land use conversion. In 2025 alone, DPR is forecast to receive VND85 billion in compensation from the Tien Hung 1 Industrial Cluster project.
DPR currently owns about 1,600 hectares of rubber land in Binh Phuoc that can be converted for other purposes. With a compensation price of about VND1 billion/ha, the company can record an income of about VND100-200 billion/year from now until 2030.
For the tree liquidation segment and other business segments of DPR, there are not expected to be many breakthroughs with an average liquidation plan of 350 - 400 hectares/year, with liquidation prices ranging from 250 - 300 million VND/ha.
Source: https://baodautu.vn/co-phieu-cao-su-dong-phu-ky-vong-tu-gia-cao-su-tiep-tuc-cao-trong-nam-2025-d244086.html
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