Equities | Vietnam | Consumer Discretionary - Durables & Apparel

Thien Long Group (TLG - HSX)

Flashnote

31 March 2025

 

Source: Company, HSC Research estimates

 

Share price performance

Source: Company, FactSet

 

Summary financials and valuation

Year end: Dec
12-24A
12-25F
12-26F
Net sales (VNDbn) 3,759 4,146 4,644
EBITDA adj. (VNDbn) 644 737 838
Pre-tax profit (VNDbn) 587 651 747
Net profit adj. (VNDbn) 561 615 696
FCF (VNDbn) 276 387 406
EPS adj. (VND) 4,806 5,312 6,100
DPS (VND) 2,500 2,500 2,500
BVPS (VND) 27,150 26,951 29,436
EBITDA adj. growth (%) 25.0 14.4 13.8
EPS growth adj. (%) 28.6 10.5 14.8
DPS growth (%) (28.6) 0 0
EBITDA adj. margin (%) 17.1 17.8 18.1
Pre-tax margin (%) 15.6 15.7 16.1
Net margin adj. (%) 12.3 12.3 12.6
Div. payout ratio (%) 52.0 47.1 41.0
Net debt/equity (%) (8.48) (3.65) (6.54)
ROAE (%) 20.8 21.8 24.0
Return on avg. CE (%) 24.3 26.7 29.6
EV/sales (x) 1.28 1.18 1.04
EV/EBITDA adj. (x) 7.45 6.67 5.76
P/E adj. (x) 12.0 10.9 9.49
P/B (x) 2.13 2.15 1.97
Dividend yield (%) 4.32 4.32 4.32

Source: Bloomberg, HSC Research estimates

 

Company description

TLG is the leading player in Vietnam's stationery market. The company owns diversified product portfolio including writing instrument, office supplies, school supplies and art materials

 

 

 

 

 

 

 

 

Event: 2M25 results announced

In Feb-25, net sales declined 6% y/y to VND217bn, driven by a 7% decrease in domestic sales and a 4% drop in export sales. The OEM business continued to be the bright spot, with sales doubling y/y (detailed number was not disclosed). Gross profit also fell 13% y/y to VND89bn, resulting in a GPM of 41%, compared to 44.5% in Feb-24.

For the first two months of 2025, cumulative net sales declined 21% y/y to VND370bn, with domestic sales down 24% and export sales down 18% (of which OEM sales increased 41% y/y). 2M25 gross profit came to VND152bn, down 25% y/y, with GPM of 41.1% vs. 43.1% in 2M24.

According to the company, the slowdown in 2M25 sales was primarily due to high inventories at distributors. However, this slowdown is temporary, and sales have begun to gradually recover since March, with positive y/y growth.

Detailed numbers in Feb-25 and 2M25 are laid out in Figure 1.

TLG sets a conservative profit target for FY25

TLG recently released its AGM documents. The company set a conservative net profit target at VND450bn, down 3% y/y, on net sales of VND4,200bn, up 12% y/y.

We understand that TLG may increase spending on selling expenses for branding activities. Additionally, the gross profit margin (GPM) could be slightly compressed due to a higher proportion of export sales in total revenue, as export sales typically have a lower GPM compared to domestic sales.

Our rating and TP are under review

For FY25, we are forecasting net sales of VND4,146bn, up 10% y/y and net profit of VND510bn, up 11% y/y. While our sales estimates come close to TLG’s target, our net profit forecast is 13% above the company’s guidance.

We put our rating and TP under review.

(Continued on page 2)

 

 

Figure 1: Feb-25 and 2M25 results, TLG

Sales declined 21% y/y in 2M25

VNDbn

24-Feb

25-Feb

Growth y/y

2M24

2M25

Growth y/y

Net sales

231

217

-5.9%

471

370

-21.4%

   Domestic

146

136

-6.8%

279

212

-24.0%

   Export

84

81

-3.6%

192

158

-17.7%

Gross profit

103

89

-13.2%

203

152

-25.1%

   Gross profit margin (%)

44.5%

41.0%

 

43.1%

41.1%

 

Source: TLG

Financial statements and key data

Note: *Excluding short-term investments.

Source: Company, HSC Research estimates

 

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Explanation of Institutional Equity Research Ratings

 

Buy: Expected to rise by more than 20% on an absolute basis in the next 12 months

Add: Expected to rise by between 5% and 20% on an absolute basis in the next 12 months

Hold: Expected to rise or decline by less than 5% on an absolute basis in the next 12 months

Reduce: Expected to decline by between 5% and 20% on an absolute basis in the next 12 months

Sell: Expected to decline by more than 20% on an absolute basis in the next 12 months

 

 

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