Having risen quite sharply on the HOSE, the PLP code caused many investors to hate after the red sessions. Now that this stock has 6 consecutive gaining sessions, investors have reason to be concerned about the sustainability of PLP’s stock price growth.
The stock has been growing recently
From the session of 15/8 onwards, PLP’s share price of Crystal Plastic Manufacturing and Technology Joint Stock Company continued to grow strongly. With the closing market price on August 22, reaching VND 16,950 / share, PLP has had 6 continuous increasing sessions and profit of nearly 27% for its shareholders.
Along with that, the liquidity of this stock also reached a good level when there were over hundreds of thousands of shares with billions of dong worth of transactions per session. The best price for nearly a month trading back here.
In particular, foreign investors also increased net buying of this stock. According to statistics from July 20 to August 22, foreign investors net sold only 17,240 shares (VND 239.2 million) on July 23 and 900 shares (equivalent to 13.3 million shares). VND) in the session of 20/8, the remaining sessions, they mainly net bought PLP. Notably, at the ceiling hit on August 21, they net bought 10,750 shares (equivalent to 169.8 million dong).
So, what factors have made PLP increase recently? It can be seen that there has been no noticeable supportive news affecting PLP stock price, except for Q2 / 2018 business results.
Accordingly, PLP’s net profit after tax increased by 126% to over VND 31.1 billion, this profit level has completed 51% of the set target according to criteria of Annual General Meeting of Shareholders 2018.
Is the stock market growth sustainable?
The PLP’s restructuring of revenue from limestone and stone powder products to Filler Masterbatch plastic granules costs 6 times more than stone powder products and 10 times more than traditional CaCO3 stone products that have brought a great source of revenue and profits to the Company.
Along with that, businesses can actively input the quality of raw materials to produce Filler Masterbatch. According to one share, the process of making this plastic bead is as follows.
Raw material from CACO3 stone will be ground into super fine powder, this powder accounts for 80-85% of raw materials, plus primary plastic and some additives to the Filler Masterbatch.
The active input of CACO3 stone materials helps PLP ensure quality and stability. This is considered an absolute competitive advantage of PLP with other businesses in the same industry.
Information from VPBS shows that Crystal Plastic owns 2 Granite quarries in Ninh Thuan, 3 white marble quarries in Nghe An and especially mines CaCO3 limestone in Thung Hung mountain, Quy Hop has a total area of over 10 hectares, abundant reserves and a whiteness of over 98.7%. Sharing with nhadautu.vn, it is reported that PLP’s mine is licensed for 23 years, with a mine output of 5-7 million tons of rock per year.
Main contribution to PLP’s revenue are two factories in Hai Phong with a specific capacity of nearly 5,000 tons / month, this factory is currently waiting to install 2 production lines. new technology filler with a capacity of 1,500 tons / machine, thereby raising the total output of the factory to about 8,000 tons / month producing 100% of plastic granules additives.
The factory in Nghe An has been transferred 4 powder lines from Hai Phong and is currently focusing on developing the domestic market for stone powder. The current capacity of stone production reaches 20,000 tons, of which stone A accounts for 65%, the rest is AB stones.
This is a great advantage for PLP in competing with domestic businesses. The report from VIRAC of the plastic industry in the second quarter of 2018 said that Vietnam’s plastic industry is currently importing raw materials from abroad. Specifically, statistics from VIRAC show that this figure accounts for more than 80% of the demand for plastic materials of all kinds due to the inability of domestic production and this dependency will continue to cause many difficulties for businesses. industry.
Plastic consumption revenue increased rapidly in the period of 2013 – 2016 with CAGR of 21.1%, plastic consumption in 2017 is estimated to increase 5.97% over the same period in 2016. Currently, Vietnam’s plastic industry is in a state of trade deficit when the import turnover of plastic products is much larger than exports.
That is not to mention, information from VPBS said that the Government has passed Decision No. 2992 / QD-BCT for giving financial incentives to businesses. Plastic from now until 2025, so PLP is enjoying many incentives from the State’s policies such as: exemption of corporate income tax for the first 4 years, a reduction of 50% of payable tax amount for the next 9 years. (calculated from 2016), free of import and export tax …
The potential from the Chinese market and the risk of rising oil prices
PLP’s revenue in the near future may boost from exports to foreign markets. Owning the number of mines with large reserves also helps PLP in the world. It is known that currently the enterprise mainly exports to Dubai, Brazil, Poland, China, Spain, etc.
In addition, “The recent Chinese ban on mineral mining and scrap plastic production, due to environmental impacts, has given the Company an advantage in the market.” This ”, the source shared with Nhadautu.vn.
Financial report of the second quarter of 2018 showed that revenue from foreign sector reached over VND 119.3 billion, accounting for over 49.1% of the Company’s total revenue. </ p>
In the near future, PLP plans to expand its two factories in Hai Phong and Nghe An to increase capacity. The money is expected to be mobilized through a plan to issue shares to the public. Specifically, PLP will issue 15 million shares to existing shareholders at the ratio of 1: 1, the expected issuance price is VND 12,000 / share.
The number of factory-specific upgrade details is not disclosed. However, the previous source from VPBS said that the company plans to increase the total number of production lines here to 10 lines, equivalent to a capacity of 15,000 tons per month. In addition, the company will bring production and crushing points to Nghe An to optimize logistics and production processes.
An existing risk of PLP is recognized by Securities Companies from the primary plastic resins – the necessary material for producing Filler Masterbatch. These companies assess that the primary plastic is a product made from oil, thus subject to the impact of oil prices. Given the recent developments in oil prices, will this affect PLP’s profit margins? The source said that with Nhadautu.vn, the higher the price of oil, the higher the price of plastic will support this particle.
“The final manufacturers (plastic tables and chairs, plastic bags) use virgin plastic as raw materials. Therefore, the price of this material has increased so they have to use filler seeds to mix and reduce the production cost of the product, so the company still has a great advantage. “