- We upgrade our rating for BMP to BUY from OUTPERFORM and raise our target price (TP) by 24% to VND192,500/share. The share price has risen 14% over the past two months.
- Our higher TP is due to (1) rolling our TP forward to end-2026 and (2) raising our 2026-30F NPAT-MI forecasts by ~20% each year. The higher earnings forecast is mainly driven by our higher GPM forecasts of ~3.5 percentage points each year during this period, respectively. This reflects our more bearish view on the outlook of PVC prices in this Update, given the worsening supply-demand imbalance of China’s PVC industry, and our revised assumption that PVC is unlikely to be targeted under the anti-involution policy. We also raise our revenue forecast by ~8% p.a., but that is offset by higher discount expense assumptions.
- We raise 2025F NPAT-MI by 9%, driven by higher margins, given (1) strong 9M results and (2) an expected QoQ margin expansion in Q4. Quarter-to-date, average Chinese PVC prices have dropped ~6-7% vs Q3’s average. We also raise revenue, but that is offset by higher discounts.
- Given BMP’s 100% dividend payout track record from 2019-2024 and higher 2025F earnings, we raise our FY2025 cash dividend forecast to VND16,000/share (vs VND14,500/share previously), implying a 99% payout ratio and an attractive next-12M dividend yield of 9.2%.
- Given BMP's robust earnings and high dividend yield, we see the stock’s valuation as attractive, with a 2026F P/E of 10.1x. Our TP implies a 2026F P/E of 11.3x, aligning with its 10-/5-year average P/Es of 11.4x/11.3x, respectively.
- Downside risk: China’s PVC capacity cut due to its anti-involution policy, raising PVC prices and narrowing BMP’s margins, but short-term impact is likely limited as supply cuts take time.
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