Danang Rubber (HOSE:DRC) - Share price, News & Analysis

Q: What is the Fair Price of DRC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

DRC (₫29350) is trading below our estimate of [[fair value]] (₫40036.94)

DRC fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	2/6
Financial Health	5/6
Dividends	2/6

DRC Stock Overview

Danang Rubber Joint Stock Company manufactures and sells tires in Vietnam and internationally.

Rewards

Trading at 26.7% below our estimate of its fair value

Earnings are forecast to grow 4.59% per year

Risk Analysis

Dividend of 5.79% is not well covered by earnings

Danang Rubber Competitors

Southern Rubber Industry

HOSE:CSM

₫1.8t

Sao Vang Rubber

HOSE:SRC

₫464.4b

Dry Cell and Storage Battery

HOSE:PAC

₫1.6t

Kirana Megatara

IDX:KMTR

Rp2.3t

Price History & Performance

Summary of all time highs, changes and price drops for Danang Rubber
Historical stock prices
Current Share Price	₫29,350.00
52 Week High	₫38,900.00
52 Week Low	₫25,000.00
Beta	0.79
1 Month Change	8.70%
3 Month Change	-2.97%
1 Year Change	-15.17%
3 Year Change	42.48%
5 Year Change	13.10%
Change since IPO	547.55%

Shareholder Returns

	DRC	VN Auto Components	VN Market
7D	2.6%	-1.2%	2.0%
1Y	-15.2%	-3.2%	-8.1%

Return vs Industry: DRC underperformed the VN Auto Components industry which returned -3.2% over the past year.

Return vs Market: DRC underperformed the VN Market which returned -8.1% over the past year.

Price Volatility

Is DRC's price volatile compared to industry and market?
DRC volatility
DRC Average Weekly Movement	5.6%
Auto Components Industry Average Movement	5.7%
Market Average Movement	7.4%
10% most volatile stocks in VN Market	10.0%
10% least volatile stocks in VN Market	4.2%

Stable Share Price: DRC is less volatile than 75% of VN stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: DRC's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
n/a	1,734	Nhut Hoang Le	https://drc.com.vn

Danang Rubber Joint Stock Company manufactures and sells tires in Vietnam and internationally. Its products include radial, light truck, heavy truck, agricultural, OTR, patch, and motorcycle and bicycle tires; car, bicycle, and motorcycle tubes; and technical rubber products. The company is headquartered in Da Nang, Vietnam.

Danang Rubber Fundamentals Summary

How do Danang Rubber's earnings and revenue compare to its market cap?
DRC fundamental statistics
Market Cap	₫3.50t
Earnings (TTM)	₫270.67b
Revenue (TTM)	₫4.69t

12.9x

P/E Ratio

0.7x

P/S Ratio

Is DRC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DRC income statement (TTM)
Revenue	₫4.69t
Cost of Revenue	₫3.93t
Gross Profit	₫759.72b
Other Expenses	₫489.05b
Earnings	₫270.67b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.28k
Gross Margin	16.18%
Net Profit Margin	5.77%
Debt/Equity Ratio	45.1%

How did DRC perform over the long term?

See historical performance and comparison

Dividends

5.8%

Current Dividend Yield

53%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is DRC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DRC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DRC. This is calculated by dividing DRC's market cap by their current preferred multiple.
What is DRC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₫3.50t

DRC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.8x
Enterprise Value/EBITDA	8.7x
PEG Ratio	2.8x

Price to Earnings Ratio vs Peers

How does DRC's PE Ratio compare to its peers?

DRC PE Ratio vs Peers

The above table shows the PE ratio for DRC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	27.4x
CSM Southern Rubber Industry	53.4x	n/a	₫1.8t
SRC Sao Vang Rubber	9.7x	n/a	₫464.4b
PAC Dry Cell and Storage Battery	9.5x	n/a	₫1.6t
KMTR Kirana Megatara	37.2x	n/a	Rp2.3t
DRC Danang Rubber	12.9x	4.6%	₫3.5t

Price-To-Earnings vs Peers: DRC is good value based on its Price-To-Earnings Ratio (12.9x) compared to the peer average (27.4x).

Price to Earnings Ratio vs Industry

How does DRC's PE Ratio compare vs other companies in the Asian Auto Components Industry?

Price-To-Earnings vs Industry: DRC is good value based on its Price-To-Earnings Ratio (12.9x) compared to the Asian Auto Components industry average (22.6x)

Price to Earnings Ratio vs Fair Ratio

What is DRC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DRC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.9x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate DRC's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of DRC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DRC (₫29350) is trading below our estimate of fair value (₫40036.94)

Significantly Below Fair Value: DRC is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Danang Rubber forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DRC's forecast earnings growth (4.6% per year) is above the savings rate (3.7%).

Earnings vs Market: DRC's earnings (4.6% per year) are forecast to grow slower than the VN market (19.5% per year).

High Growth Earnings: DRC's earnings are forecast to grow, but not significantly.

Revenue vs Market: DRC's revenue (12.1% per year) is forecast to grow slower than the VN market (17.2% per year).

High Growth Revenue: DRC's revenue (12.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DRC's Return on Equity is forecast to be low in 3 years time (16.6%).

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Past Performance

How has Danang Rubber performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

11.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DRC has high quality earnings.

Growing Profit Margin: DRC's current net profit margins (5.8%) are lower than last year (7.5%).

Past Earnings Growth Analysis

Earnings Trend: DRC's earnings have grown by 11.3% per year over the past 5 years.

Accelerating Growth: DRC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DRC had negative earnings growth (-14%) over the past year, making it difficult to compare to the Auto Components industry average (-2.2%).

Return on Equity

High ROE: DRC's Return on Equity (15.5%) is considered low.

Discover strong past performing companies

Financial Health

How is Danang Rubber's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: DRC's short term assets (₫2,397.1B) exceed its short term liabilities (₫1,630.7B).

Long Term Liabilities: DRC's short term assets (₫2,397.1B) exceed its long term liabilities (₫1.5B).

Debt to Equity History and Analysis

Debt Level: DRC's net debt to equity ratio (22.2%) is considered satisfactory.

Reducing Debt: DRC's debt to equity ratio has reduced from 65.9% to 45.1% over the past 5 years.

Debt Coverage: DRC's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: DRC earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Danang Rubber current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

5.79%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DRC's dividend (5.79%) is higher than the bottom 25% of dividend payers in the VN market (2.81%).

High Dividend: DRC's dividend (5.79%) is low compared to the top 25% of dividend payers in the VN market (7.37%).

Stability and Growth of Payments

Stable Dividend: DRC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: DRC's dividend payments have increased, but the company has only paid a dividend for 9 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (52.7%), DRC's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: DRC is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure

CEO

Nhut Hoang Le

1.75yrs

Tenure

₫901,812,198

Compensation

Mr. Nhut Khanh Hoang Le serves as Chief Executive Officer at Danang Rubber Joint Stock Company since November 01, 2020 and serves as its General Manager and Member of Management Board. He had been Deputy G...

CEO Compensation Analysis

Compensation vs Market: Insufficient data to establish whether Nhut's total compensation is reasonable compared to companies of similar size in the VN market.

Compensation vs Earnings: Insufficient data to compare Nhut's compensation with company performance.

Leadership Team

Experienced Management: DRC's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31