Having just increased its charter capital by 17% to nearly 1,700 billion VND, what is BaF Vietnam's ambition?

BAF Agriculture increases capital to nearly 1,700 billion VND

BaF Vietnam Agriculture Joint Stock Company (stock code BAF - HoSE) has just announced a change in charter capital from VND 1,435.2 billion to VND 1,679.2 billion, an increase of 17%.

BaF Vietnam's capital increase took place in the context of the company's business activities continuously receiving many positive signals, especially with high pork prices.

Currently, the price of live pigs in many places across the country is hovering around 68,000 - 70,000 VND/kg, the highest level in the past 5 years, up 30% compared to the beginning of this year.

Previously, BaF Vietnam's business situation in the first quarter of 2024 was very positive. Net revenue in the first quarter reached VND 1,292 billion, up 58% over the same period.

Although the cost of goods sold increased more slowly than the revenue increase, BaF Vietnam's gross profit in the quarter was 2.7 times higher, up to VND171 billion.

In the first quarter of 2024, BAF's after-tax profit was VND 118 billion, 30 times higher than the same period last year. This is BAF's peak profit in the past 6 quarters.

In the 2024 Annual General Meeting of Shareholders document, BAF Vietnam Agriculture JSC plans to have revenue of VND5,544 billion, up nearly 7% over the same period. The target profit after tax is VND306 billion, 9.9 times higher than last year.

Provisionally calculated according to the above plan, at the end of the first quarter, BAF completed 23% of the revenue target and 38% of the profit target.

BAF aims to double the total herd by the end of 2024 compared to the end of 2023, bringing the total herd to 75,000 sows and 800,000 pigs (by the end of 2023 there will be 37,000 sows and 330,000 pigs).

BAF plans to start new projects such as Phu Yen 3 with a scale of 5,000 sows and 60,000 pigs; Giai Xuan project with a scale of 5,000 sows and 60,000 pigs; Tan Hop project with a scale of 60,000 pigs; Hung Phat Farm project with a scale of 5,000 sows; Thanh Dat Gia Lai project with a scale of 5,000 sows and 60,000 pigs; Tan Phat 2 project with a scale of 48,000 pigs; and the Animal Feed Factory project in Binh Dinh, the project provides 200,000 tons of animal feed/year.

BAF Vietnam Agricultural Joint Stock Company (Code: BAF) has a prosperous business situation.

Many opportunities for domestic livestock enterprises such as BaF Vietnam

According to VPBankS Research data, the current cost of pig farming of BaF Vietnam is only 40,000 VND/kg - quite low compared to the industry average.

Mr. Ngo Cao Cuong - CFO of BaF Vietnam said that it is forecasted that the price of live pigs may remain stable at around VND70,000/kg until the third quarter of 2024 and will be maintained for most of this year. Thereby, BaF Vietnam's profit in the following quarters is expected to improve compared to the first quarter of 2024.

According to a recent assessment by Maybank Securities, the domestic pig farming industry is opening up many opportunities for domestic farming enterprises such as BaF Vietnam. The large-scale industrial farming model will gradually replace the small-scale, household farming model and become the leading factor in the market.

In particular, according to the new regulations of the Law on Animal Husbandry, from January 1, 2025, livestock farms in areas where livestock farming is not permitted in cities, towns, townships, and residential areas will be forced to relocate.

Experts assess that small-scale, dispersed livestock farming is no longer suitable, especially in conditions where there are many epidemics and food safety and environmental hygiene standards are increasingly demanding. Therefore, the relocation of small-scale livestock farms in areas where livestock farming is not allowed in cities, towns, townships, and residential areas is an inevitable trend. This is also an opportunity for Vietnam to form a large, modern livestock industry that can participate more in the world 's food production chain.

In addition, the Law on Animal Husbandry also introduces the concept of livestock unit and livestock density. These are new concepts, consistent with international practices, aiming to improve the quality of livestock farming activities, minimize the risk of disease outbreaks and impacts on the surrounding environment.

This legal environment facilitates the restructuring of the livestock industry towards industrialization, suitable for businesses following the 3F (Feed, Farm, Food) closed safe production model, from animal feed to the livestock farming and food processing process.

According to Maybank Securities, smallholder farmers are leaving the market due to high costs associated with biosecurity procedures to prevent diseases and price volatility.

The current consolidation process in the pig farming industry benefits listed livestock processing enterprises such as BAF Vietnam. Therefore, it is no coincidence that BAF Vietnam has continuously increased investment to expand the scale of livestock farming and processing in the past and present.

Previously, in its plan, BAF Vietnam said that it would use hundreds of billions of VND to supplement capital for the company's pig farming activities; hundreds of billions of VND to supplement capital for agricultural business activities and to increase charter capital at its subsidiaries, Tan Chau Investment Company Limited and Tam Hung Production, Trade and Service Company Limited. In case contributing capital to the two above-mentioned subsidiaries is not feasible or not accepted by the authorities, BAF proposed to replace this option by investing in increasing charter capital in Song Hinh High-Tech Livestock Company Limited to invest in a pig farm project and supplement capital for business activities...

Source: https://danviet.vn/vua-nang-von-dieu-le-them-17-len-gan-1700-ty-dong-baf-viet-nam-tham-vong-nhung-gi-20240621105832503.htm