DGC - GROWTH PROSPECTS FROM LARGE-SCALE FUTURE PROJECTS

Dear Valued Clients, DGC Stock Analysis Report

SHS Research recommends OVERWEIGHTING DGC stock, with a 12-month target price of VND 134,100/share, 21.9% higher than the closing price on March 12, 2025, based on the following key arguments:

• Expectations for the price of Yellow Phosphorus (P4) and other Phosphorus-based products of DGC to enter an upward trend from 2025 onwards. The main drivers of this price increase come from the renewable energy trend, the development of the semiconductor industry and Lithium electric vehicle batteries, along with China's continued restrictions on P4 and fertilizer exports.

• Maintaining revenue and profit in core business segments with a gross profit margin of approximately 37%/year. DGC's P4 and Acid products have high purity, meeting export standards, and are expected to generate consistent after-tax profits of approximately 3,500 – 4,000 billion VND/year from 2025.

• Long-term growth drivers come from the Nghi Son Chemical Project and the Duc Giang Distillery Project. The Duc Giang Distillery Project is expected to begin commercial operation in 2025 with projected revenue of 700 billion VND and a gross profit margin of 10%. The Nghi Son Chemical Project commenced construction on February 17, 2025, and is expected to begin commercial operation in Q1/2026.

• The company has a healthy financial situation with abundant cash, low debt, and consistent dividend payments over the years.