CSV with the ambition of raising major funds

CSV shares closed trading on June 19 at VND 72,500 per share, with a trading volume of nearly one million units. Notably, foreign investors have been consistently buying CSV shares in recent sessions.

According to a recent Agriseco Securities study, demand is recovering as sectors resume normal operations. Currently, the caustic soda business in Vietnam only fulfills around half of domestic demand, with companies primarily supplying the local market to service the textile, chemical, and metal sectors. This is projected to accelerate the recovery of domestic demand for caustic soda and its derivatives.

Caustic soda prices fell and then rebounded substantially. Caustic soda prices in China have climbed by around 20% over the last five months. As a result, sectors such as textiles, chemicals, and metals, which rely heavily on caustic soda in this nation, are experiencing robust output recoveries. Meanwhile, the cost of caustic soda in Vietnam is determined by global and Chinese market pricing. Thus, caustic soda producers such as CSV and many other businesses may gain from the present high pricing trend.

CSV intends to transfer its facility from Bien Hoa Industrial Zone to the chemical plant in Nhon Trach. CSV has already paid the land leasing charge at the Nhon Trach Industrial Zone; nevertheless, the move is still proving challenging, but a solution is being devised. CSV is now pursuing a new investment proposal to boost capacity at the Nhon Trach facility by 50,000 tons of 100% NaOH per year (equal to 50% of existing capacity). This will allow the company to retain consistent business operations during the migration process.

A review of CSV's financial structure reveals that the company has a significant amount of cash and cash equivalents despite having almost no debt. In addition, CSV's Bien Hoa manufacturing has nearly completely depreciated, allowing the corporation to minimize expenditures in the coming years.

For the 2024 business plan, CSV's Board of Directors sets an annual revenue target of VND 1,640 billion, up 103% from 2023, and a consolidated pre-tax profit of VND 261 billion, up 90% from 2023. It has also set the ex-dividend date for July 2, 2023, with a dividend distribution of 150% in stock and 25% in cash.

Agriseco Securities predicts that in 2024, CSV will encounter both obstacles and possibilities. First, in terms of obstacles, the local market's pricing of basic chemicals is now competitive due to low-cost imported commodities, particularly Chinese caustic soda. Furthermore, CSV may relocate all three primary production units from Bien Hoa Industrial Zone 1 to Nhon Trach Industrial Zone 6 this year, disrupting manufacturing activity for a brief period and hurting company operations. The ban on industrial salt imports has long been an unsolved issue for CSV.

However, from a positive standpoint, scientists feel that CSV offers several benefits. Although not totally obvious, the domestic economy is showing many good indicators, and the predicted rebound in industrial activity will provide the foundation for the basic chemical group to profit. CSV's capital growth plan, a highlight in 2024, is scheduled to complete on track, assisting the firm in securing financial resources for manufacturing relocation, as well as investment and restoration of virtually totally depreciated gear. As a result, CSV shares are advised for medium-term investments.