SBT — Analyst Meeting Takeaways

Sugar prices: Still high, but under pressure. Management notes that sugar prices remain high (for details as to why), see our company visit report of May 28). However, prices are trending downward due to decreased global demand, anticipated oversupply, and ongoing taxes on sugary beverages, which are pressuring selling prices.

Net-net, SBT is guiding for FY25 revenue to decline by -9.8% YoY to reach VND26.2tn, with a slight PBT decrease of -0.9% to VND 900bn. This is based on SBT’s assumption for Vietnam sugar consumption to grow by a rather unexciting 2-3% YoY in FY25.

However, 1Q25 preliminary revenue grew by +7% YoY to reach VND 6.8tn, representing 26% of SBT’s target for the full fiscal year. Gross profit margin in 1Q FY25 reached an estimated 12.4%, up +1.4ppt from 1Q FY24.

SBT’s preliminary 1Q FY25 PBT rose by +3% YoY to reach VND 260bn, which represents 29% of full-year guidance.

Longer term, SBT remains committed to its revenue target of VND60tn by 2030. The company plans to expand its raw material area to 90k ha (+25% from the current 71.8k ha) and targets sugar shipments of 1.7mn tons annually by 2030 (+70% from current levels).

Plans for M&A to expand FBMC products SBT plans to increase its focus on food, beverages, milk, and confectionery products to support margins in the year ahead. FBMC products were c.6.6% of SBT’s total revenue in FY24, and the company aims to boost this share to 40% by 2030 significantly.

Valuation: SBT is trading at a TTM PER of 12.7x, slightly below the regional peer median. Currently, SBT is trading at nearly -1 standard deviation below its historical mean PE and PB ratios.

We do not cover the stock and have no investment recommendation.

Key risks: Sugar price volatility, interest rates, execution of M&A.

Please access the link for our complete report: SBT Analyst Meeting takeaways

Analysts:

An Nguyen, An.nguyen@yuanta.com.vn

Binh Truong, Binh.truong@yuanta.com.vn