Possessing a solid business foundation and many outstanding advantages, An Phat Bioplastics (Ticker symbol: AAA) is not at the market price that businesses and investors expected. So what is the intrinsic value of AAA when its revenue and profit targets are recording positive growth?
Evaluated as the key business of An Phat Holdings (Ticker symbol: APH), AAA is at a lower market price than APH’s member companies and other enterprises in the plastic industry.
However, investors are expecting that AAA will soon regain its position and make a breakthrough in 2021. In a recent interview, Mr. Nguyen Le Trung – General Director of An Phat Bioplastics JSC cum Vice Chairman of An Phat Holdings gave a piece of his mind.
Sir, in 2021, AAA sets a profit target of VND 550 billion, the highest profit in the business’s history. Until present, is this plan is feasible?
It is expected that by the end of the second quarter, we will complete nearly 40% of the profit plan. However, AAA’s revenue and profit will increase sharply after An Phat 1 Industrial Park officially comes into operation and starts commercial exploitation. Recently, after increasing capital by more than VND 1,000 billion (~$ 42.5 million), financial expenses have been rebalanced. Therefore, we are confident that we can complete the set profit plan.
What factors help AAA expect a breakthrough with the industrial real estate segment in the second half of 2021, sir?
Regarding the industrial real estate segment, newly released statistical reports of many market research companies showed that the rental price of real estate in industrial zones in the North is increasing. However, Hai Duong province is still having a lot of advantages in investment attraction. In particular, Vietnam is studying and implementing the “vaccination passport” measure, which is a good opportunity for foreign investors to promote investment in Vietnam.
Currently, An Phat 1 Industrial Park of AAA is speeding up to complete site clearance to start construction in July. Currently, we are also connecting and working with many investors to seek business cooperation opportunities.
Besides industrial real estate, will industrial packaging and green products bring positive-growth to AAA, Sir?
In short term, the industrial packaging segment will make more contribution to the company’s packaging revenue structure this year when the factories of AAA member company – An Vinh Packaging operate at full capacity.
In terms of green products, we have a broader vision in this area and are seeing many positive changes. In fact, the value of orders of compostable products continued to grow strongly in the first months of 2021, the export volume of green products in the first quarter of 2021 doubled compared to the same period in 2020.
The main markets for these products such as Europe, Japan, the United States… also recorded positive growth in the last 2 months when the epidemic was gradually brought under control. In particular, the successful registration of trademark protection for AnEco’s compostable products in the United States has opened up many opportunities to trade AAA’s green products in this market.
AAA is considered to be the most beneficial from the PBAT Green Material Factory project that An Phat Holdings is implementing. Could you please be more specific?
Currently, we are urgently preparing to start construction of Southeast Asia’s largest green material (PBAT) manufacturing plant and at the stage of completing the licensing procedures. With a capacity of 30,000 tons per year, the factory will meet the demand for input materials for AAA instead of importing as before. This helps AAA save 40 – 50% on raw material costs.
Expected to consume 70% of the raw materials produced in APH’s project, AAA will be the most beneficial from this project thanks to improving profit margins as well as taking initiative in raw materials, making it easier to reach out to big customers.
AAA is also building factory number 8, specializing in producing compostable bags. This plant is expected to have a capacity of 9,600 tons per year, increasing the company’s production output by 9%.
On the stock market, AAA shares are at the price range of 15,000 – 16,000 VND per share. However, investors are expecting a better price for AAA shares. What is your opinion, Sir?
With the advantages and potentials mentioned above, I think the value of AAA shares on the stock exchange is reflecting 50% of the company’s real value. Realizing that there is still a lot of growth potential for AAA, An Phat Holdings will continue to buy more shares and increase its ownership in AAA. I believe that the market will soon reflect the intrinsic value of the company.
Thank you very much!