PAN : The profit of The PAN Group in 2022 has been boosted thanks to the consolidation of VFG and the growth of all business segments

• After the M&A phase, The PAN Group is expected to develop rapidly thanks to owning a complete ecosystem with distinct advantages in the agricultural sector.

• At the beginning of the fourth quarter, the Group will implement the plan to increase its charter capital to VND 4,102 billion by offering a bonus issue and a rights issue to existing shareholders.

According to SSI Research, after being severely affected during two years of the pandemic, the global economy continues to face challenges due to ongoing political conflicts, soaring inflation and climate change. The current situation has prompted governments to re-evaluate the vital role of the agricultural sector in the context of food security and sustainable nutrition. The FAO Food Price Index (FFPI) has reached its highest level in ten years. In the context of household incomes decline, supply chain disruption, and commodity prices increase, countries need to guarantee supplies of their staple foods for domestic consumption and keep inflation under control. Thanks to a long history of agriculture, Vietnam can attain food self-sufficiency to provide enough essential foods such as rice, beef, poultry, seafood and others.

The PAN Group ( HoSE: PAN) is a leading enterprise in the agricultural sector, pursuing a sustainable development strategy by working closely with farmers, with a vision to ensure a stable supply of agricultural products such as rice, cashew, and aquatic products. The enterprise owns a complete ecosystem with distinct advantages in the field of agriculture. Currently, the Group aims to apply technology application to farming and production activities, thereby helping to improve traceability and increase brand awareness of the products sold.

In the period of 2013-2018, The PAN Group mainly focused on mergers and acquisitions activities. The company acquired Aquatex Ben Tre (HoSE: ABT) in 2013, Vinaseed (HoSE: NSC) in 2014, Bibica (HoSE: BBC) in 2015, Sao Ta Foods (HoSE: FMC) in 2017 and Vietnam Fumigation (HNX: VFG) in 2021.

Between 2018 and 2020, The PAN Group applied solutions to reinforce the company's core values by strengthening its R&D capabilities, increasing manufacturing production capacity, and changing production technology to improve efficiency as well as recruiting new customers. So far, The PAN Group has completed the merger and acquisition phase, and is currently focusing on business development.

Therefore, SSI Research believes that in the period of 2021-2025, the Group will witness double-digit profit growth.

Profit for the period 2021-2025 is expected to grow by double digits.

In 2021, this agricultural group recorded revenue of VND 9,463 billion, up 11%; net profit of VND 296 billion, up 57%, compared to 2020. In the first half of this year, the Group continued to achieve outstanding results with consolidated revenue of VND 6,200 billion, up 60%; profit after tax attributable to shareholders of the parent company of VND 175 billion, up 112%. Net profit increased across all business segments such as seeds (up 24%), agrochemicals (up 45%), shrimp (up 42%), pangasius and clams (up 120%), fish sauce (up 17%).

The financial consolidation of VFG helps The PAN Group to further promote its growth, in addition to the one-time income recognition of BBC's asset disposal. SSI Research believes that the packaged food sector (including confectionery, nuts and dried fruits, spices) has an encouraging revenue growth of 11% in the first half of the year and is expected to accelerate in the second half of 2022 which is its peak season. Meanwhile, profit from nuts & dried fruits decreased by 29% compared to the same period last year due to exchange loss.

In the third quarter, The PAN Group sets a net revenue target of VND 3,600 billion, up 43%; a net profit target of VND 53 billion, up 38% compared to the same period in 2021.

Hence, according to SSI Research, The PAN Group's growth for the full year 2022 is driven by the financial consolidation of Vietnam Fumigation's full-year business results and profit growth across all operating segments.

In addition, at the beginning of the fourth quarter, the company plans to increase its equity capital by the following methods: issuing shares to pay dividends with the execution rate of 5:2 and issuing purchasing rights with subscription ratio of 2:1 at an offering price of 15,000 VND/share. A part of the estimated value of issuing (VND 1,600 billion) will be invested in subsidiaries, M&A and short-term debt reduction.

In particular, The PAN Group will issue about 83.6 million shares to increase capital from capital premium in the audited financial statements in 2021, also offering more than 104.4 million shares to existing shareholders. From the two offering methods, the Group's charter capital is expected to increase to VND 4,102 billion. According to the Resolution of the Extraordinary General Meeting of Shareholders at the end of last year, the Group also announced a private placement of 41.1 million shares to increase its capital to more than VND 4,500 billion.

Source: Ndh.vn