Rice stocks diverge despite robust export results
LTG and PAN shares of Pan Group are currently the only two rice stocks that are actively traded on the market.
Even though domestic rice exports experienced growth in both production volume and value in the first quarter of 2024, stocks in the industry still struggled due to several reasons.
Việt Nam's rice exports reached over 2.18 million tonnes in the first three months, generating revenue of US$1.43 billion, up 17.6 per cent over last year in quantity and 45.5 per cent in value, according to the General Department of Customs.
The average export price of rice reached $653.9 per tonne, a 23.6 per cent increase year-on-year. The country mainly exports to the Philippines, Indonesia, China and Malaysia.
Việt Nam emerged as the largest rice exporter to the Singapore market for the first time, commanding a market share of 32.03 per cent. This figure surpassed both India (6.96 per cent) and Thailand (8.28 per cent) in terms of export value.
So far this year, the Vietnamese rice industry has seen many positive signals, such as seven companies secured ten out of 17 bidding packages, supplying over 300,000 tonnes of rice to Indonesia. This country plans to continue importing 2 million tonnes of rice this year.
Việt Nam also signed a Memorandum of Understanding (MoU) to sell 1.5 - 2 million tonnes of rice annually to the Philippines for five years.
Divergence picture
But despite these strong rice export figures, stocks of several companies are volatile.
TAR shares of Trung An Hi-Tech Farming JSC face trading restrictions, AGM shares of An Giang Import - Export Company (Angrimex) are under scrutiny while LTG shares from Loc Troi Group have decreased due to adjusted profits for 2023.
TAR shares are also at risk of delisting as auditors refused to provide opinions on its financial reports. Trung An High-Tech Agriculture awaits verification on issues raised by the Securities Commission.
Trung An High-Tech posted a loss of nearly VNĐ15.6 billion (US$614,370) in 2023. Currently, the company has not disclosed the schedule for the shareholders' meeting or the business plan for 2024.
As for AGM shares, they were placed under control on April 5, due to the negative net profit in the past two years (2022-2023). It also received a qualified opinion from the auditing firm regarding the 2023 financial report.
Angrimex is actively striving to restructure its operations and generate positive profits, taking advantage of favourable conditions in the rice export market amid global supply shortages. Some traditional rice-importing countries of Việt Nam, such as Indonesia and the Philippines, have shown rising demand for imported rice.
LTG and PAN shares of Pan Group are currently the only two rice stocks that are actively traded on the market, analysis team of Viet First Securities Corporation told Việt Nam News.
At 1.45pm (local time), LTG was traded at VNĐ24,400 a shares, down 7 per cent from the beginning of the year, while PAN reached VNĐ21,450 per share, a 5.1 per cent increase.
The rice segment is a major contributor to the revenue of Loc Troi Group, accounting to 70 per cent, but the profit margin in this segment is relatively low, ranging from 2-3 per cent. As a result, the agricultural supplies segment has become the backbone of the company.
In contrast, Pan Group has a more extensive and diverse agricultural product ecosystem, with rice products only contribute 23 per cent to their revenue. While the profit margins of the rice segment have expanded compared to the previous year, it do not make a significant contribution to the company's overall profits.
As a result, stocks in the sector are mainly driven by speculative trading based on rice price trends rather than business prospects, primarily due to the thin profit margins and the challenge of achieving substantial profits, said the analysis team of Viet First Securities.
However, the industry's general outlook remains highly optimistic, characterised by rising export volumes and the growing recognition of Vietnamese brands, Viet First Securities added. In addition, the global warming and the influence of El Niño are expected to maintain the rice prices at a high levels.
India, which accounts for 40 per cent of global rice trade, continues to restrict rice exports.
According to the World Bank's report Global Commodity Outlook, global rice prices are unlikely to decrease before 2025. — VNS
