Vietnam Rubber Group, trading under the ticker GVR on the Ho Chi Minh Stock Exchange, is a prominent player in Vietnam’s natural rubber industry. Its core business includes rubber production, wood product processing and manufacturing, production of industrial rubber goods, and industrial park development on former rubber plantations.
In the first half of 2024, GRV experienced an increase in revenue and net profit of 11.33 percent and 8.5 percent year-over-year, respectively. This was primarily driven by a significant increase in rubber prices. The average export price for rubber during the first seven months of the year reached US$1,551 per ton, marking a 14.5 percent rise compared to the same period in 2023.
This high price is likely to remain for some time with the Association of Natural Rubber Producing Countries forecasting a global natural rubber shortage of up to 1.24 million tons in 2024.
As a result, GVR’s stock price rose by 83 percent from the beginning of 2024 to the end of July.
That said, GVR has earmarked industrial parks as a future growth driver as opposed to rubber.
As the largest natural rubber producer in Vietnam, GVR owns 373,182 hectares of land in Vietnam and in late 2023, the company received the Prime Minister’s approval for the conversion of nearly 25,000 hectares of this land to industrial parks.
Notably, in the first half 2024, its rubber operations accounted for 75 percent of GVR’s total revenue, while industrial parks only contributed 3.1 percent.
That said, industrial real estate represents GVR’s most profitable segment, with average profit margins exceeding 65 percent. In this light, over the long-term, GVR is looking to become a key industrial real estate developer in Vietnam.
Disclosure: The author does not have any financial interest in GVR stock.
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