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Dong Hai Ben Tre (DHC VN) – Q1 2025 Earnings – Net Profit Soars 36%, Margins Expand on Lower Input Costs
Summary of Q1 2025 results and outlook of Dong Hai Ben Tre JSC (DHC VN)
- Net revenue was VND826bn (+1.9% y/y) and net profit came to VND76bn (+36.1% y/y) thanks to margin improvement. Kraft paper revenue accounted for 81.1% of total revenue, increasing 1.4% thanks to a slightly higher average selling price (ASP) while volume was flat as its kraft paper mills are running at full utilization. Packaging revenue made up the remainder of 18.9% and increased by 4.1%. Net profit growth was thanks to (1) gross margin increased due to lower price of the main input material, Old Corrugated Container (OCC), following a strong decline in global shipping cost, and (2) interest income increased from a higher cash position.
- The recent easing of China–U.S. tariff tensions signals a more favorable outlook and the likelihood of practical tariff rates for Vietnam, minimizing impacts on the kraft paper industry. We view that Vietnam will finalize a trade deal soon, supported by its proactive negotiation stance. Meanwhile, the country’s strong fundamentals—such as skilled, low-cost labor and deep integration into global supply chains—provide resilience against short-term trade volatility.
- DHC is well-positioned to navigate external risks while benefiting from favorable cost dynamics. While the company could be indirectly impacted if its export-oriented clients face weaker global demand due to Trump’s tariffs, its strategic location in the Mekong Delta—an agricultural export hub with diversified markets—gives it a competitive edge over peers in other regions. Management is also actively seeking new clients to mitigate external risks. On the cost side, DHC benefits from lower OCC input prices, which declined in Q1 and are expected to remain stable.
- For the last 9M/2025, business performance is expected to be driven by sustained kraft paper sales at full capacity, rising packaging box volumes, and lower average input costs, as OCC prices are expected to remain at Q1’s low levels throughout the year.
- 2026 and 2027 will see stable profits. Higher profit from growth of the higher margin packaging boxes segment offset the higher tax rate (tax incentive for GL2 ends in 2025) and lower financial income (lower cash position as GL3 investment is disbursed).
- Strong profit growth is expected from 2028 onward, driven by the GL3 paper mill. Once commercially operational, the mill will focus on producing kraftliner—largely imported in Vietnam today—and testliner.
Click here to read our comments on DHC’s previous quarterly performances.
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