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The first quarter of each year is always considered to be the low season of the Paint Industry due to specific industrial characteristics as well as being affected by the Lunar New Year holiday. However, Dong A Paint Joint Stock Company (Company, HDA) still recorded growth in business results.

According to the Company's Consolidated Financial Statements of Q1 2022, Net Revenue reached VND54 billion dong, coming mainly from the production of 3 main product lines: Viglacera, BEHR and BEWIN. With the efficient operation of 3 Spanish-standard modern Factories located across 3 main regions of Vietnam and distribution networks from North to South, Sales still recorded positive for this low season. The cost of goods sold was recorded at VND30 billion, which decreased 19% over the same period thanks to the new automatic production lines imported from Spain. Gross profit margin (GPM) reached 45%, rose 2% over the same period. Selling and Administration expenses reached nearly VND18 billion, down 21% compared to the same period last year, a result of the effective policy of minimizing costs. Profit before tax was recorded at VND6 billion, increased 56% over the same period. Net profit margin of 9% reached 2 times higher than Q1 2021.

As of March 31, 2022, the Company's total assets reached VND401 billion, increased 7% mainly due to the increase of inventory. Inventories recorded at VND90 billion majority consisted of materials for production and all kinds of paint products which are expected to hit the market during the peak period of Q2 2022. Cash and cash equivalents remained stable at VND58 billion to ensure solvency and maintain the production to be operated throughout. Total debt remained at VND97 billion with  debt-to-total assets ratio stayed low at 0.24 times. Current ratio and quick ratio improved, reaches 1.5 and 0.9 respectively.

Modern production line from Spain, and a distribution network of more than 700 distributors

The Company's production capacity has proved at 3 modern factories located at 3 key economic areas of Hanoi, Da Nang and Long An. The production line has imported from Spanish and fully automated from the closed material entry stages to the product packaging stage. The material has been all imported that meet ISO 9001-2000 standards and have been tested and evaluated by many organizations around the world and certified for environmental safety. With the quality material and modern production technology, a series of high-class paint products such as Viglacera, BEHR, and BEWIN as well as other ancillary products such as putty and waterproof glue have been produced.

Until now, HDA has over 700 distributors from North to South. With reasonable discount and sales policies, the distribution network has expanded strongly and is being operated effectively. The Company aims to expand the network to over 1,000 distributors by 2025.

The urbanization has subsequently led to the strong growth of the construction materials industry. Besides basic materials such as steel, cement... Paints and coatings is also playing an important role and large component in construction projects so the paint market has been active in recent years. Coatingsworld predicted that Paints and coatings industry in Vietnam will grow from VND383 million in 2018 to VND459 million by the end of 2022. According to a statistic of the Vietnam Paint and Ink Association, the consumption counted per person per year is currently only 2.8 to 3 liters in Vietnam while it is 20 to 22 liters in America, 15 to 16 liters in Western Europe and 12 to 13 liters in China.

Additionally, the recovery of the post-COVID economy has boosted demand, industrial production and construction growth recently. Therefore, demand for coating and painting is expected to keep growing and start to increase really strong from Q2 2022, especially when real estate projects enter the peak construction phases. With high quality Paint product lines and extensive distribution system, HDA's Revenue and Profit is expected to record strong growth from Q2 2022 onwards.

For details please contact:

Investor Relations Department