On June 29, An Phat Bioplastics JSC (Ticker symbol: AAA) succesfully held the Annual General Shareholders’ Meeting 2021 at An Phat Bioplastics manufacturing plant, Hai Duong Province.
The meeting approved the business result in 2020, expected to pay 5% dividend, 10% bonus share for existing shareholders and approved the business plan for 2021, along with other contents in the reports related to the management and operation of the company.
Revenue in 2020 reached VND 7,429 billion (~$ 316 million), 5% cash dividend, 10% bonus share
In 2020, AAA reported consolidated revenue of VND 7,429 billion (~$ 316 million), consolidated profit after tax of VND 283 billion (~$ 12 million), which did not meet the target revenue plan due to profit from the industrial real estate segment has not been recorded. AAA’s leader said that despite the decrease in total profit, profit in the core business field remained stable during the year.
In the context of the Covid-19 pandemic, the packaging segment still maintained its growth compared to the previous year. Total packaging sales in 2020 reached 102,708 tons, up 7.4% over the same period in 2019, of which thin monolayer film grew by nearly 4% over the same period.
The approved dividend payout plan in 2020 is 5% in cash. At the same time, the meeting also voted to approve the plan to issue bonus shares to existing shareholders at the rate of 10%, with the goal of ensuring long-term benefits for shareholders and the sustainable development of the Company.
Positive revenue plan in 2021 thanks to industrial real estate segment
Also at the meeting, the meeting approved the 2021 plan with total revenue of VND 9,000 billion (~$ 383 million), profit after tax of VND 550 billion (~$23.5 million)., payout ratio rate of 15%.
Responding to comments that this is a quite optimistic business plan during the epidemic, Mr. Nguyen Le Trung – Vice President, General Director of An Phat Bioplastics said: “Before setting out the business plan in 2021, we have considered a number of factors and predictable impact caused by the pandemic. Core areas such as packaging and green products still maintain stable growth, especially the industrial real estate segment has a strategic partner, which is expected to make a breakthrough in 2021.
In 2021, AAA plan to promote the development of green packaging and products, focusing on researching new product lines as well as developing high-tech and environmentally friendly products. According to business leaders, the profit margin of AAA’s packaging segment can be improved as the contribution of green packaging and products may increase to 20% in 2021 and is expected to account for 50% in packaging revenue structure by 2023.
On the other hand, the acquisition of An Vinh Packaging in 2020 has helped AAA gets revenue from the industrial packaging segment, which is expected to contribute significantly to AAA’s total revenue this year.
In the industrial real estate segment, besides the goal of filling 100% of An Phat Complex Industrial Park, AAA plans to exploit the new An Phat 1 Industrial Park (180 ha) by the end of 2021. Mr. Trung stated that after going into operation, An Phat Industrial Park is estimated to bring AAA about VND 2,560 billion (~$ 109 million) in revenue and VND 795 billion (~$ 34 million) in profit in the next 5 years.
According to the development plan to 2030, the company will expand its industrial land bank to more than 2,000 hectares to seize opportunities from relocating production to Vietnam.
Earlier, Actis – the global investment fund will invest more than 20 million USD in An Phat 1 Industrial Park to own 49% of its shares and cooperate in the development of expansion projects, RBF/RBW for lease worth up to 250 million USD have shown positive signals from AAA’s new industrial park.
“The partnership will not only see Actis providing the initial capital, but also provides resources to implement new projects and maximise the potential of the industrial real estate segment for the area. Along with that, we can improve reputation, product and service quality, and maximize operating capacity of An Phat 1 Industrial Park,” said Mr. Dinh Xuan Cuong – member of the Board of Directors of AAA.
Thanks to those factors, AAA’s leaders expect the company will make a breakthrough in 2021 with the highest profit in the business’s history, surpassing the record number set in 2019 (VND 491 billion ~$ 20.8 million). At the end of the first quarter of 2021, AAA reported positive results when consolidated revenue reached VND 2,284 billion (~$ 97 million), profit after tax reached VND 90 billion (~$ 3.8 million), up 45% and 43% respectively over the same period in 2020 and growth of 7% and 48% compared to the fourth quarter of 2020.
Discussion session at the Annual General Shareholders’ Meeting
Question 1: Sir, what is the company plan for the industrial real estate segment? What role does Actis Investment Fund play after investing in An Phat 1 IP?
– Mr. Pham Anh Duong: In recent years, AAA has restructured and strongly developed environmentally-friendly plastics, supporting industries and industrial real estate. In the coming years, the company will develop a large land bank in Hai Duong, up to 2,000ha for the development of the industrial real estate segment.
Currently, the company has built a business ecosystem including companies operating in the field of packaging, molds, plastic injections, especially supporting industries… supporting major industries such as televisions and phones… Thus, the development of industrial real estate not only bring profits but also help the Group to develop supporting industries segment, contributing to further profit growth from this segment.
About the role of Actis, this is the investment firm of the UK, specializing in investment in industrial real estate. This is the first time this fund has invested in the industrial real estate segment in Vietnam. Actis also has long experience in industrial real estate for lease and currently, Actis cooperates with AAA in a joint venture to develop industrial parks for lease.
Therefore, Actis will invest over $200 million. The ready-built warehouse and factory for lease of the company are currently operating efficiently, whereby the cooperation with Actis will give AAA a great advantage. At the same time, Actis will support AAA in attracting investors.
Actis currently participates 49% in An Phat 1 Industrial Park. The profit information will be published according to the regulations on information disclosure, expected this year or next year.
Question 2: Sir, does the company have plan to list on foreign stock market?
– Many Vietnamese enterprises are looking for listing on foreign stock market, including An Phat Bioplastics. The company has been studying this opportunity for more than 2 years. Currently, we set sight on listing in foreign markets, specifically in the US. As for the way, the company has worked with experienced brokers. There are 2 forms of listing through depository certificates or indirect listing. We are working on legal frameworks and working with stakeholders.
The US stock market requires enterprises to have high transparency. Therefore, AAA is trying to be the first company to list in the US. AAA also has the advantage of being a green business that in line with the criteria in the US.
In the US market, there is a company in the same industry, Danimer Scientific (DNMR), with a revenue of $ 50 million but capitalization has increased to $ 2.1 billion. $50 million in revenue is a small number.
Question 3: Could you please share AAA’s estimated profit for the first 6 months of 2021?
– AAA reported a 45% increase in profit in the first 6 months of 2021 over the same period. This profit does not include the upcoming profit from the industrial park divestment. The company expects that in the near future when the Covid-19 epidemic stabilizes, profits will be even better.