On the demand side, the resurgence of Covid-19 in several Asian countries is challenging the prospect of demand recovery. Especially India, the world's largest PVC consumer market, is being hit hard by the double impact of the Covid-19 pandemic and the monsoon affecting the whole country, usually between June and September. or longer for a number of years, delaying construction, agriculture and logistics activities.

On the supply side, supply is recovering as major US manufacturers are starting to resume production after maintenance, which is cooling down and balancing global supply and demand. Therefore, PVC price is forecasted to continue to stabilize, thereby positively impacting profit margin of plastic pipe manufacturers.

In an analysis report published recently, Bao Viet Securities Company (BVSC) said that Binh Minh Plastics Joint Stock Company (HoSE: BMP) has raised its selling price twice, a total of 14.5% compared to the beginning of the year. (lower than the 20-28% increase from competitors), in order to expand market share, in return, it must sacrifice a part of short-term profits.

BMP management said that some small-scale plastic producers seem to be suffering a lot, production has been halted, while some manufacturers have had to leave the industry when PVC prices soar. This further promotes consolidation in the plastic pipe industry.

"Some leading manufacturers such as BMP and Tien Phong Plastic Joint Stock Company (HNX: NTP) with market shares at the end of 2020 accounting for 27.5% and 22.5% respectively, benefited the most and won more. market share in the process," the BVSC report reads.

BVSC believes that the prospect of BMP's business results in the second quarter of 2021 is less positive, but the pressure will ease in the second half of 2021.

Due to the strong increase in PVC price in the period of April-May 2021, BVSC expects that BMP's business results in the second quarter will remain low and will improve in the year-end period. Specifically, BMP's net profit in the second quarter of 2021 is forecasted to decrease by 29.3% compared to the same period last year, to 109.4 billion dong.

The profit reduction will narrow in the third quarter of 2021, is forecasted to reach 126.6 billion (down 17.1% over the same period last year) before increasing to 146.5 billion in the fourth quarter of 2021 (equivalent to the same period of 2017. equivalent to an increase of 32.1% from a low base in the fourth quarter of 2020).

Overall, BVSC forecasts BMP's 2021 net revenue to increase 17% to VND5,481 billion and net profit to decrease by 10.8% to VND466.4 billion.

This securities company believes that the prospect of recovery will be clearer in 2022 when PVC supply and demand will continue to improve, helping to stabilize PVC prices. Accordingly, net revenue reached 5,636 billion (up 2.8%) and net profit reached 532.4 billion (up 14.2%).

MB Securities Company (MBS) said that construction demand is forecasted to not be able to recover while the real estate industry has not shown any positive signs. Therefore, the plastic pipe industry continues to be in oversupply when the supply is always 1.8-2 times higher than the market demand.

"Small businesses face more difficulties than large enterprises with large market shares and strong financial potential such as BMP or NTP," the analysis report of MBS said.

In 2021, BMP plans to achieve revenue of VND 5,200 billion (up 10.6%) and profit after tax of VND 523 billion (flattening compared to 2020). However, with the price of raw materials continuing to increase recently and the new wave of Covid-19 appearing in early May, MBS estimates that BMP's revenue will reach VND 5,130 billion and profit. reached 440 billion VND this year.