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As wooden export turnover is rebounding with rising demand within the home market, the revenues of wooden enterprises are anticipated to advance.
Nonetheless, skyrocketing costs of uncooked supplies and logistics prices will weigh on these corporations’ gross revenue margin in 2022.
VNDIRECT Securities Company (VNDIRECT) estimated that the overall income of listed wooden and wooden merchandise corporations within the first quarter (Q1) of 2022 rose by 10.2 per cent year-on-year because of the restoration of wooden producers within the south.
After the social distancing order was lifted, most wooden corporations within the southern area resumed operations at 90 per cent capability within the first quarter of 2022, whereas within the second half of 2021 it was solely 60-65 per cent.
The export wooden enterprises achieved higher enterprise leads to Q1 of 2022. Particularly, Truong Thanh Furnishings Company (HoSE: TTF) and Phu Tai JSC (HoSE: PTB) witnessed spectacular development through the interval, primarily boosted by robust demand from US prospects and excessive inventories in This fall of 2021.
Monetary statements confirmed that web revenues of Truong Thanh and Phu Tai reached VND537.5 billion (US$23 million) and VND1.72 trillion, respectively up 71.8 per cent and 22.5 per cent over final 12 months.
An Cuong Wooden – Working JSC (UPCoM: ACG)’s web income and web revenue in Q1 of 2022 climbed 8.7 per cent and 18.7 per cent on-year, respectively, because of positive factors in export income and declines in promoting prices.
In the meantime, home wooden producers equivalent to Vinafor (HNX: VIF) and GEWOODCO (UPCoM: MDF) posted destructive development, as a consequence of excessive enter supplies and rising aggressive stress from the wooden plank phase as different companies constantly expanded capability through the 2021-22 interval.
However, there’s a widespread issue amongst wooden trade companies, that’s whether or not their income will increase or decreases, the gross revenue margin of most corporations declined in 2022 as a consequence of greater enter supplies and logistics prices.
Of which, the gross revenue margin of the wooden phase of Phu Tai dropped 1.4 share factors in comparison with the identical interval in 2021, to 21.3 per cent, as a result of the costs of imported sawn pine and spherical pine rose 52 per cent and 38 per cent respectively. The rise in wooden costs is because of the influence of the Russia-Ukraine battle and excessive logistics prices.
The gross revenue margin of GEWOODCO additionally slid 6.2 share factors throughout the identical interval, as a consequence of a 20 per cent achieve in enter wooden costs since January 15.
Increased demand however prices soar
Market analysis and consulting agency Grand View Analysis forecast that the US picket furnishings market worth would develop by round 7.9 per cent within the 5 years from 2022 to 2027, pushed by vital development in single-family homes, whereas dwelling loans within the US are on the highest stage since 2018, with dwelling mortgage contracts up 8 per cent over final 12 months in April.
Analysts anticipated that prime demand for housing within the US would increase the acquisition of picket furnishings merchandise in 2022-2023.
The timber trade can be mentioned to learn from China’s discount in manufacturing capability.
Regardless of nations around the globe easing COVID measures, China continued to pursue the zero COVID coverage with extended lockdowns in lots of areas equivalent to Jiangsu, Jilin, Guangdong and Shanghai. Three of the ten largest wooden producers in China have needed to shut factories in Shanghai and Jiangsu because of the influence of COVID-19.
Consultants consider that the coverage will promote the shift of orders to Viet Nam. At present, China remains to be Viet Nam’s important competitor within the US furnishings market, accounting for 22.5 per cent of the US wooden furnishings import worth in 2021.
VNDIRECT anticipated that enterprises with a big proportion of picket furnishings exports to the US, equivalent to Phu Tai, Truong Thanh and Nam Hoa Buying and selling & Manufacturing Company, would have benefits over others.
Furthermore, demand within the home market may additionally get well because of the return from the residential actual property market.
The securities agency forecast that the actual property market would witness a restoration within the provide facet in 2022, as builders would deal with boosting gross sales to enhance money stream. This was mirrored within the prospects of robust development in gross sales of listed actual property corporations this 12 months.
Regardless that there are lots of benefits to income development, greater costs of uncooked supplies add stress on the gross revenue margin of enterprises in 2022.
The ban on exporting logs to European nations and the US by the Russian Authorities has tightened the worldwide uncooked supplies provide, resulting in hovering costs.
In accordance with monetary web site Buying and selling Economics, the worth of lumber within the US superior 25 per cent in Q1 to $1,412 a board foot. The gross revenue margin of most wooden and furnishings corporations was diminished in Q1 as a consequence of excessive enter supplies and post-logistics prices.
VNDIRECT believed that the gross revenue margin of wooden and furnishings corporations in 2022 could be affected, as the availability scarcity would proceed to push up the worth of wooden supplies. This 12 months, the gross revenue margin of wooden and furnishings corporations would proceed to fall 0.4-0.6 share factors, VNDIRECT mentioned.
Container transport prices have elevated from $1,500 per 40ft container (Shanghai-Los Angeles route) in July 2019 to just about $8,852 per 40ft container in March, six occasions greater during the last 5 years.
Though transportation prices have proven indicators of cooling down in April, down 10 per cent from the earlier month, the securities firm nonetheless anticipated that logistics prices would stay at a excessive stage, roughly $7,000 per 40ft container in 2022 as a consequence of present excessive oil costs.
“Excessive logistics prices might have an effect on the gross revenue margin of wooden and furnishings corporations in 2022”, mentioned VNDIRECT.
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