Workers processing pangasius for export at a plant of Vĩnh Hoàn. — Photo vinhhoan.com

HÀ NỘI — Vĩnh Hoàn Corporation, a major player in Việt Nam's pangasius industry or tra fish, has seen a significant rebound in the selling price of its product from the end of last year, pushing its net profit expectation to above VNĐ1 trillion (US$39.3 million). 

The country's pangasius industry has seen a solid recovery in the first four months of this year, with export volume increasing by 14.2 per cent from the same period last year to 270,000 tonnes. Export value also grew by 2.4 per cent to $587 million.

As the leading pangasius exporter in Việt Nam, Vĩnh Hoàn has reported positive business results. The company's net revenue in the first four months surged by 25 per cent to over VNĐ3.9 trillion. 

As a result, the company now accounts for 15 per cent of the country's total pangasius export value, significantly outpacing the second-largest player.

However, the gross profit margins of Vĩnh Hoàn and other pangasius exporters remain under pressure. 

In the first quarter, the average selling price of pangasius dropped by 10 per cent year-on-year to around $2.2 per kg, even as raw pangasius material costs edged up slightly due to the rebound in export activities and rising transportation costs from the second half of 2023.

Vĩnh Hoàn's gross profit margin in the first three months dropped sharply to 9.3 per cent, down 800 basis points from the same period in 2023. This led to a 16 per cent decline in the company's net profit to VNĐ189 billion.

Nevertheless, some financial institutions believe the company's business results have now hit the bottom and expect a stronger recovery in the second half of the year. This optimism is driven in part by positive signs emerging in the US market, which is a major export market for the company.

Indeed, the US, European Union (EU) and China remain Vĩnh Hoàn's top three export markets, accounting for 29 per cent, 19 per cent and 10 per cent of its revenue respectively, in the first four months of 2024.

Its export revenue to the US market has been on a positive trajectory, with three straight monthly gains. While the pangasius export price to the US is still lower than the same period last year, it has shown signs of recovery, reaching around $3 per kg - a 20 per cent increase from late 2023.

The advantage is gradually shifting in favour of Vietnamese pangasius exporters. This is due to the US ban on imports of Russian seafood, as well as the EU's decision to apply a 13.7 per cent tariff on all Russian fillet of pollock products, compared to the previous zero per cent rate.

Looking ahead, Phú Hưng Securities Corporation forecasts that Vĩnh Hoàn's average pangasius selling price in the US market will recover to around $3.3 per kg this year, representing a 4 per cent gain from 2023 levels.

While its export revenue to the US market has been on a bullish trend, the company is facing increased competition in the Chinese market from Russian pollock fish.

On the other hand, the pangasius selling price in China is projected to continue declining to an average of around $1.9 per kg - a 13 per cent decrease from 2023 levels. 

However, the company's domestic business is showing bright spots. In the first four months of 2024, its domestic revenue grew by 43 per cent to nearly VNĐ1.1 trillion. This was driven by increased warehouse rental activities, contributions from its subsidiary Sa Giang, as well as revenue from the recent expansion of its fish feed production capacity.

Given the current market dynamics, the securities firm expects Vĩnh Hoàn's full-year net revenue to increase by 13.8 per cent to VNĐ11.4 trillion in 2024, while net profit is expected to grow by 17.6 per cent to more than VNĐ1.1 trillion. — VNS