• Plan for 2020: Revenue of VND 10,000 billion, profit after tax of VND 550 billion.
• Expected dividend payout ratio of 15%
• Approving APH of increasing AAA’s ownership to 65%
• Propose a maximum purchase of 15% of treasury shares
On 25th March, 2020, at Hai Duong, An Phat Bioplastics JSC (Ticker AAA) successfully organized the 2020 Annual Shareholder Meeting at An Phat Bioplastics’ factory, Hai Duong province.
The meeting reviewed its 2019 business performance and approved the 2020 business plan, as well as the reports related to the its management and operation activities.
Revenue in 2019 reached VND 9,258 billion, increasing by 16% over the same period
– Regarding business results, the whole year’s packaging output reached 94,110 tons, increasing by 9% over the same period. The consolidated net revenue reached VND 9,258 billion, going up 16% over the same period, the consolidated profit after tax reached VND 491 billion, increasing by 132% compared to 2018, reaching 98.43% compared to the original plan.
– The revenue in 2019 was lower than expected due to a 20% drop in plastic resin prices in 2019, but remained a strong growth rate mainly due to the company’s expansion of the industrial real estate business with the An Phat Complex project. Specifically, in 2019, the revenue from the sales and lease of industrial park land reached VND 707 billion, contributing 7.58% of the total consolidated revenue.
– In 2019, the company also boosted the packaging production, dominating the market by the increased capacity of two packaging factories (Factory No. 6 and Factory No. 7), along with a Calbest and stone powder plant. In particular, the revenue from semi-finished products reached VND 4,018 billion, an increase of 6% compared to 2018.
In general, in 2019, AAA’s production and trading activities have been maximized and gained significant achievements in the new field – industrial real estate.
Expected dividend payout ratio of 15%
Through this meeting, AAA is expected to have a dividend payout ratio of 15%, of which, 10% will be paid in cash and 5% in shares to ensure the long-lasting benefits for shareholders and the sustainable development of the company.
Dividend payout is expected to be carried out by AAA in Quarter II / 2020.
Approving An Phat Holdings (APH) of increasing AAA’s ownership to 65%
The meeting also approved a proposal to allow APH to increase its ownership ratio in AAA from 51% to 65% in 2020. In addition, the company also suggested a plan to repurchase up to 15% of the shares as treasury shares for the purpose of finding a strategic resale partner with a price not lower than the book value of AAA.
2020 strategy – Continue to develop green products, promote the compostable product line
By 2020, AAA will achieve VND 10,000 billion of the consolidated revenue and VND 550 billion of the consolidated profit after tax. In addition to the production improvement, the company has strategies for all business areas as follows:
– The product structure and revenue: with plastic products, the net revenue in 2020 is planned to grow strongly by 18.4% to VND 4,700 billion; partly due to a 4.4% increase in sales volume to 100,000 tons. In particular, compostable bags will be the main growth engine of this segment, and traditional products will be gradually replaced by compostable products including: bags, knives, spoons, forks, gloves, etc. The expected plastic product profit is VND 330 billion, contributing 60% to the total profit plan.
– Trading segment: Trade revenue is planned to be flat, is VND 4,600 billion (increase by 2.4%). Trading activities will continue to be restructured to reduce short-term receivables and improve the profit margins. Accordingly, AAA expects to increase the gross profit margin of the trading segment from 2.6% to 3.5%. The company sets a target of VND 40 billion in profit from trading, contributing 7.3% to the total profit plan.
– Market expansion: Focusing on big foreign markets in Europe, Australia, especially Japan and the United States. The EU is currently AAA’s largest market, contributing 50% of its plastic bag revenue in 2019. In addition, thanks to the EU-Vietnam Free Trade Agreement (EVFTA), the import tax of Vietnam’s plastic bags into the EU at a tax rate of 3% will be removed, which will create a significant competitive advantage for AAA, especially when compared to the 6.5% import tax imposed on Chinese plastic bags when imported into the EU market.
– Industrial real estate: The company plans to achieve a net profit of VND 180 billion, contributing 32.7% to the total net profit. An Phat Complex Industrial Park is expected to reach 100% leasing rate in 2020 (currently 65%), thereby setting an industrial park revenue target of VND 700 billion. Furthermore, the company will invest in another industrial park in Hai Duong named An Binh – Quoc Tuan, phase 1 is expected to be 180 hectares wide and will be put into operation by the end of 2020.
At the meeting, shareholders were interested in the issue of 50,000 ESOP shares at VND 17,000 / share while canceling the 5% ESOP program at VND 10,000 / share in 2019, AAA General Director – Mr. Nguyen Le Trung said: “The application of ESOP for 50,000 shares at book value is the right to buy shares, which balances the interests of existing shareholders and the company employees. If effective, we can both ensure the benefits of shareholders and employees”.
The purchase of treasury shares, in his opinion, is immediate to support the stock price when it is too low compared to the real value. The ultimate goal is to find the strategic partners and transfer them at the price not lower than book value. This is still in the negotiation stage, so it has not been disclosed in details.
Regarding the impact of the COVID-19 disease outbreak on the company’s business performance, Mr. Trung said that the company’s products are essential, related to food and health, so it is less affected. Ms. Hoa Thi Thu Ha, Deputy General Director in charge of finance said that the company’s output in the first 2 months grew by 7.6% compared to the same period in 2019.
The AAA 2020 Annual Shareholder General Meeting was successfully organized.