Seafood stocks expected to grow in 2022 on bullish outlook

With a relatively attractive valuation and a bullish industry outlook, seafood stocks are expected to grow positively in 2022.
Seafood stocks expected to grow in 2022 on bullish outlook ảnh 1Illustrative image (Photo:
Hanoi (VNS/VNA) - With a relatively attractive valuation and a bullish industry outlook, seafood stocks are expected to grow positively in 2022.

The prospect of the seafood industry in 2022 is expected to continue to be optimistic, with export turnover forecast to reach 9 billion USD, An Binh Securities Joint Stock Company said.

According to analysts, the recovery and reopening of the global economy, especially in the US and Europe, thanks to the promotion of vaccinations, will boost demand for Vietnamese seafood exports.

The seafood sector also benefits from multilateral and bilateral trade agreements. As the EU-Vietnam Free Trade Agreement (EVFTA) comes into effect, some shrimp products exported to the EU with a tariff rate of 12-20 percent will be reduced to 0 percent, such as frozen black tiger shrimp.
This will reflect in the positive upcoming business results of seafood exporters in the fourth quarter of 2021 and the whole of 2022.

In addition, as stock valuation is not high, the seafood industry is still attractive to investors.

On the stock market, except for Vinh Hoan Corporation (VHC), seafood stocks witnessed a strong correction in January after surging last year, with Minh Phu Seafood Corporation (MPC) down 15 percent, Navico (ANV) dropping 25 percent, Camimex Group (CMX) down 33 percent and Sao Mai Group Corporation (ASM) down 27 percent. However, these stocks started to recover and gained quite sharply from the beginning of February.

Especially, on February 14, while the market benchmark VN-Index dropped nearly 30 points, seafood was one of the rare stock groups posting positive performance.

Of which, VHC and ANV hit the ceiling price of 6.9 percent, while many other stocks rose such as I.D.I International Development & Investment Corporation (IDI) up 6.5 percent, Cuu Long Fish JSC (ACL) up 5 percent, and CMX up 4.4 percent.

Despite difficulties, especially during many months of social distancing due to the pandemic, the seafood industry has experienced a successful year in 2021.

Most businesses in the industry recorded positive business results in the past year, with revenue and profit margins increasing thanks to the recovery of export seafood prices.

In the last quarter of 2021, the leading exporter of the industry, Vinh Hoan, posted consolidated net revenue of 2.69 trillion VND, up 33.8 percent over the same period in 2020, resulting in a gain of 175 percent in profit after tax to 461.2 billion VND. This was the company's highest quarterly profit since mid-2018.

For 2021, Vinh Hoan saw net revenue of 9.05 trillion VND with profit after tax reaching 1.1 trillion VND, up 28.6 percent and 54.3 percent on-year, respectively.

Sao Ta Foods JSC(FMC) also reported good results in the last quarter of 2021. The company’s revenue exceeded the milestone of over 1.44 trillion VND, while its profit after tax reached over 110 billion VND; up 19.4 percent year-on-year and 73.4 percent, respectively.

For the whole of 2021, Sao Ta Foods posted record revenue of nearly 5.2 trillion VND, while its profit after tax also hit an all-time high at 285.6 billion VND.

Similarly, Camimex Group reported revenue in the fourth quarter of 2021 double the same period of 2020 and profit increased 23.6 percent over 2020 to 23.78 billion VND. 

For 2021, the company’s net revenue jumped 53.7 percent to 2.19 trillion VND, with profit after tax up 38 percent to 82.9 billion VND.

Meanwhile, Minh Phu Seafood, which has yet to announce the fourth quarter's consolidated financial statements, would like to extend the deadline for submitting business results until February 25.

In the first nine months of the year, Minh Phu recorded net revenue of 8.9 trillion VND, up 11 percent year-on-year, with profit after tax of 565.6 billion VND, up 19.1 percent. In 2021, Minh Phu targeted a revenue of 15.7 trillion VND, with profit after tax of 1.09 trillion VND.

According to a report from SSI Securities Corporation, the industry's average price to earnings ratio (P/E) increased to 11-13x in 2021, from 7-9x./.

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