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Company Quarterly Earnings Update – PHR VN – Q1 2025
Summary of Q1 2025 results and outlook of Phuoc Hoa Rubber JSC (PHR VN)
- PHR operates two main business segments: rubber plantations and IP development. The rubber segment is its traditional business, generating most of the revenue and stable annual profits. Meanwhile, the IP segment has become the key earnings driver, mainly through the conversion of existing rubber land. PHR develops IPs via three approaches: self-developed projects, cooperating with other developers, and selling rubber land to other developers. Among these, rubber land sales provide substantial but irregular earnings.
- In Q1/2025, net profit rose to VND95 bn (+30.8% y/y), driven by both the IP and rubber segments. IP growth was supported by higher management fees from self-developed projects, while cooperating projects are still completing basic infrastructure. The rubber segment also benefited from high global rubber prices amid continued supply shortages.
- The U.S. reciprocal tariff on Vietnam may temporarily slow FDI inflows. However, Vietnam’s long-term fundamentals remain intact. Structural advantages, such as skilled, low-cost labor and deep integration into global supply chains, are difficult to replicate within a single U.S. presidential term. Recent signs of easing U.S.-China tensions, including a 90-day reciprocal tariff reduction agreement, may help restore investor sentiment. As global manufacturers adjust to new normal, FDI inflows are expected to regain momentum.
- PHR is well-positioned to capitalize on the conversion of its rubber land in Binh Duong province, a key manufacturing hub in the Southern region. With IP occupancy rates at 94% in Binh Duong and 89% across the South, and only 200 ha of new supply added over the past nine quarters, the need for additional land is becoming more urgent.
- From 2025 to 2029, we project net profit growth to be largely driven by rubber land sales and IP leasing. During this period, we forecast PHR will sell a total of 1,867 ha of rubber land to other developers for the development of infrastructure, industrial parks, and waste treatment facilities. For valuation purposes, we only factor in projects with clear execution plans in the coming years, while the value of the remaining rubber land is reflected under the rubber segment.
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