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- We reiterate BUY for DGC and raise our target price (TP) by 31% to VND110,000/share as we (1) increase our 2023F/24F/25F core EBITDA by 14%/27%/21% mainly due to our higher selling price assumptions and (2) roll our valuation horizon forward from mid-2024 to end-2024.
- DGC will put its new yellow phosphorus (P4) plant into operation in Q4 2023, which will expand its capacity by 16% in response to a surge in order volume that exceeds its current capacity.
- DGC’s P4 ASP slumped from USD5,000/tonne in Q1 2023 to USD4,000/tonne in July 2023 but has since remained stable. However, DGC expects prices to bounce back in early 2024 due to revived demand. We forecast a 2024F phosphorus ASP of USD4,800/tonne.
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