I.

​ Introduction
II.​ Fertilizer Industry Overview
A.​ Vietnam Fertilizer Industry Value Chain

Diagram 1: Vietnam Fertilizer Industry Value Chain (Le, 2024)

B.​ Fertilizer Industry Characteristics

The fertilizer industry in Vietnam is a highly cyclical, capital-intensive, commodity-linked, and
policy-sensitive industry.
●​ High cyclicality: Profitability fluctuates in distinct cycles due to the cyclical nature of
fertilizer demand, a result of cyclicality in agriculture and crop prices, and cyclicality in
production costs, which are sensitive to input commodities like gas, coal, sulfur, and
phosphate rock. In periods of high crop prices, fertilizer demand is high and prices
improve, while in periods of low crop prices or high inventories, fertilizer demand
 declines rapidly and prices deteriorate. This cyclicality is particularly evident in urea
manufacturers whose cost is directly linked with energy prices.
●​ Capital intensive: Urea, DAP and phosphate plants are capital intensive, complex
chemical technology and high fixed depreciation. This is because these plants need to run
at close to capacity in order to be efficient, which is why Vietnam has structural
oversupply in urea and phosphate fertilisers (Le, 2024). Producers run the business and
supply the surplus to the export market to meet fixed costs even if domestic demand is
low. Consequently, company performance is not only related to domestic consumption
but also to export conditions.
●​ Commodity linked: The industry is very sensitive to input commodities which firms do
not control. Đạm Cà Mau (DCM) and Đạm Phú Mỹ (DPM) (gas-based producers) use
natural gas from PV Gas, the price of which is tied to the price of oil in the world market.
The producers of coal are Đạm Hà Bắc (DHB), etc. The phosphate producers rely on the
management of apatite supplied by Vinachem and imported sulphur. This results in
unstable cost structures and a high degree of external macro influences on the cost
structure, not just internal efficiency.
●​ Policy sensitive: Government policy and regulation also have a significant impact on the
fertilizer industry. The majority of the larger producers are state-affiliated companies and
the competitiveness of these companies is influenced by tax regimes, gas pricing systems,
import taxes, and environmental policies. Domestic fertilizers are more expensive than
imported fertilizers, for example, due to the fact that local producers have to pay 10%
more VAT than their imported counterparts because the local producers cannot deduct
this VAT as input tax (Le, 2024). Any changes in the VAT law may have a significant
impact on the competitive position of domestic producers and imports.

There are a number of macro-economic factors which have a significant impact on the
performance of the industry. The most important are the global energy prices, since the energy
cost makes up the bulk of the cost of urea production. The prices of agricultural commodities are
global, which affects farmers' purchasing power and their demand for fertilizers. The effects of
exchange rate changes on import prices and export competitiveness. International trade and
geopolitical events can lead to temporary price increases that can help the companies in the
industry, like the Russia-Ukraine War in 2022 which caused supply disruptions (Kee et al., 2023)
or the ban on fertiliser exports from China in 2026 (Reuters, 2026). Year-to-year variation in
planting activity and fertilizer use are also influenced by weather and climate.

To conclude, Vietnam's fertilizer industry is facing a difficult situation in which profit is not as
much related to the brand or the price as to the energy price, agricultural cycles, government
policy and the international trade market. The burden of high fixed costs, fluctuating input prices
and structural oversupply, coupled with increasing dependence on export markets to sustain
operations, is a challenge faced by firms.
III.​ Company Overview - DCM
Đạm Cà Mau (DCM) is one of the leading companies in Vietnam's fertilizer industry, under the
control of the Vietnam National Oil and Gas Group (PVN), currently the Vietnam National
Energy Group. The company has come a long way in its production, business and strategic
development, especially during periods of volatility in the domestic and global fertilizer markets.
PVN currently owns about 75% of DCM's charter capital, or 400 million shares, which means
that PVN has majority ownership, while foreign investors only own about 5% of the company
(Le, 2024). DCM is involved in the manufacturing, sale and export of agricultural fertilizers,
chemicals and petroleum products. The company produces urea and NPK as the major products.
Chart 1 shows the revenue breakdown of DCM.

Chart 1: DCM Revenue Breakdown by Products

The main contribution of DCM’s revenue is Urea, which takes about 72%, 76%, 64%, 55%, and
50% in 2021, 2022, 2023, 2024, and 2025, respectively (Appendix 1). But it can be seen that
over the years the contribution of Urea has reduced due to the capacity of NPK production which
is increasing year by year. NPK share of total revenue is growing gradually from 4% in 2021 to
23% in 2025 (Appendix 1). Because of supply disruptions due to Russia (Kee et al., 2023), the
revenue of DCM has been gradually rising yearly, with a significant increase in 2022. The
company has 3 factories: Đạm Cà Mau Plant, Cà Mau NPK Plant, Korea–Vietnam NPK Plant
(PetroVietnam Ca Mau Fertilizer Corporation [PVCFC] 2025).
 ●​ Đạm Cà Mau Plant: Construction started in 2008 and the plant started operating in
2012. It is the first and main facility of the company in Cà Mau. The plant has a design
capacity of 800,000 tons of urea per year, and currently operates at an optimized level of
110%–115% of design capacity, which is approximately 900,000 tons per year of prilled
urea (PetroVietnam Ca Mau Fertilizer Joint Stock Company [PVCFC], 2024). It is the
only plant in Vietnam that can produce prilled urea of consistently good quality. The
company is exploring the potential of expanding capacity to 125% (PVCFC, 2024).
●​ Cà Mau NPK Plant: Inaugurated in 2021, this plant has a capacity of 300,000 tons of
NPK per year (PVCFC, 2024). It employs liquid urea (UR) technology from Spain and
equipment from EU and G7 countries.
●​ Korea–Vietnam NPK Plant (KVF): Đạm Cà Mau has taken over 100% of
Korea–Vietnam NPK Plant (KVF) in April 2024 (Minh, 2024). It has a design capacity of
360,000 tons of NPK per year and has been in operation since 2017 (Vietnam News,
2024). With the acquisition Đạm Cà Mau will have a stronger market share for NPK in
the Southeast and Central Highlands regions and eliminate a competitor. KVF previously
operated inefficiently and suffered losses, but after the acquisition, it made a profit of
VND 5 billion in the last nine months of 2024.

Chart 2: DCM Revenue Composition - Domestic & Export Markets

The absolute value of the revenue from the domestic market and export market is growing
gradually year by year, except for 2022, when there was a disruption in the global supply of
fertilizer. Revenue from foreign markets is growing from 20% in 2020 to 29% in 2025 (in
percentage terms) (Appendix 1). This is achieved by DCM’s effort in expanding internationally.
The company has a partnership with Samsung C&T in order to distribute its products to the
world market. Đạm Cà Mau products have been exported to 20 countries and territories, and in
2024, the company successfully expanded its business to Australia and New Zealand (Asean,
2024). DCM is a top fertilizer producer and trader in Vietnam in the domestic market. The
company has a close to 10.62% share in the national fertilizer market (PVCFC, 2024). Đạm Cà
Mau has approximately 60% of the market in the Mekong Delta region (PVCFC, 2024). The
company has a wide distribution network with 61 out of 63 provinces and cities in Vietnam. It
has over 90 first tier distributors and hundreds of second tier distributors (Le, 2024). The
company is also growing its B2B distribution channels, urban agricultural stores and online
distribution channels.

IV.​ Comparable Companies to DCM

Based on this analysis, two similar companies to Đạm Cà Mau (DCM) are identified to support
the financial analysis of the target company, Đạm Phú Mỹ (DPM) and Đạm Bắc Hà (DBH).
They are all in the same fertilizer business, manufacture the same basic products (e.g., urea and
nitrogen fertilizers), and are targeted at the same market (Vietnam's agriculture sector). They also
operate in comparable regulatory and competitive environments, have comparable distribution
systems, and target comparable markets, thus offering good comparisons for operating efficiency,
profitability, cost management, and overall financial performance for DCM. Of the selected
peers, DPM is more similar to DCM than DBH. This is mainly because both DPM and DCM are
based on the use of natural gas as the primary feedstock for the manufacture of urea, and
consequently have a similar input cost structure and production economics. The cost structure of
DBH is, in contrast, predominantly based on the price of coal. Further, DPM has total assets that
are relatively close to DCM making it an appropriate firm to compare (similar scale).
Consequently, Đạm Phú Mỹ is the primary benchmark and DBH is the secondary benchmark
because of its different production inputs and scale.

Table 1: Comparable companies to DCM

Company Ticker Total Assets (Book Value as
of Quarter 1, 2026)

PetroVietnam Ca Mau DCM 18,852 billions VND

Fertilizer Joint Stock
Company

Petrovietnam Fertilizer and DPM 18,157 billions VND

Chemicals Corporation

Habac Nitrogenous Fertilizer DBH 5,548 billions VND

& Chemicals Joint Stock
Company
 V.​ Financial Analysis - Profitability
A.​ Gross Profit Margin
The gross profit margin of Đạm Cà Mau (ĐC M) and Đạm Phú Mỹ (ĐP M) and Đạm Bắc Hà
(ĐB H) between 2021 and 2025 is provided in Appendix 2. DCM's gross profit margin exhibits
a distinct cyclical trend during the 2021-2025 period. The margin increased strongly from
28.18% in 2021 to 35.82% in 2022, before dropping sharply to 16.16% in 2023. It then gradually
recovered to 18.68% in 2024 and further to 24.34% in 2025. This trend is related to the fertilizer
industry cycle, as 2022 was an extraordinary year due to the historically high prices of urea in the
global market after the supply disruption and geopolitical tensions (Kee et al., 2023)
(Appendices 3 and 4). Fertilizer prices in 2023 quickly returned to normal levels, whereas input
costs, particularly natural gas, were relatively high, squeezing margins. The recovery in
2024-2025 indicates better cost conditions, and a partial recovery in selling prices, enabling
DCM to return to profitability.

A very similar pattern can be seen here when compared to DPM. The similarity in the trend of
DCM and DPM is largely attributed to the fact that both the companies have natural gas as their
main feedstock in the production of urea. So, both companies had a significant advantage when
fertilizer prices rose in 2022 and were hurt by the drop in fertilizer prices in 2023 while gas
prices did not drop in tandem. But it looks like DCM is on a better footing than DPM in
2024-2025. This may be due to the efficiency of DCM's plants. The Ca Mau Fertilizer Plant is
one of the 10% most efficient urea plants in the world, including: reducing energy consumption
per ton of urea, and producing more urea than the design capacity (Ministry of Science and
Technology, 2026). Another reason for DCM's operational efficiency could be the favorable gas
supply contracts it has. It is also connected directly with the PM3-Cà Mau gas pipeline system,
which has always provided a stable and reliable feedstock for its urea production (Duong, 2024).

In 2021 and 2022, DCM's gross margin was less than that of DPM. The reason was that DPM
had a relatively larger proportion of specialty fertilizers and by-products with high margins while
DCM had a more narrow sales mix of urea (Báo Đấu Thầu, 2021). The margin profile is more
volatile and less robust on DBH, however. While DBH also experienced a spike in 2022
(44.01%), its margin turned negative in 2023 (-0.35%) before recovering modestly to 11.20% in
2025. The more pronounced decline is mainly driven by the coal-based input structure, which
generates a different cost dynamics from the gas-based producers. Operational inefficiencies and
lower fertilizer prices were likely the more significant drivers of DBH's margin compression
when fertilizer prices dropped, as were coal prices (Appendix 5). This distinction is important
because of the difference in production economics and input price sensitivity between DBH and
DCM.
 B.​ Net Income Margin
Net profit margins of Đạm Cà Mau (DCM), Đạm Phú Mỹ (DPM) and Đạm Bắc Hà (DHB) are
presented in Appendix 6 for the period 2021-2025. The first step in the analysis is to look at the
operating, interest and tax expenses in detail to examine the net income margin.
●​ Like DPM, operating (Selling and Administrative) expenses of DCM also increased from
9.60% of sales in 2021 to 12.89% in 2025. In most years, DCM's slightly higher ratio
indicates slightly less administrative efficiency than DPM. The situation is different with
DHB, where the operating expenses are still significantly lower and are relatively stable,
ranging from 5.47% in 2021 to 5.24% in 2025, and with no clear trend.
●​ The firms differ also with respect to interest expenses. The interest expenses of DCM are
still very low, increasing from 0.19% of sales in 2021 to 0.42% in 2025. DPM's interest
expenses are marginally up but remain low, rising from 0.54% to 0.86%. The interest
burden of both companies is less than 1% of sales, suggesting that they do not rely
heavily on debt financing and that financing costs have a negligible impact on
profitability. In stark contrast, DHB’s interest expenses are extraordinarily high, at
21.76% of sales in 2021, 11.75% in 2022, and 14.55% in 2023, before falling to around
4% in 2024–2025. This is definitely a high leverage situation, particularly during the
early years.
●​ There's also a cost of taxes. While DCM has a relatively low effective tax rate between
5.87% and 11.78%, DPM's tax rate is generally much higher, peaking at 22.87% in 2024
and 22.25% in 2025. DHB, on the other hand, has deferred tax assets to report 0%
effective tax for 2021–2025.
The net profit margins for DCM and DPM are generally similar to their gross profit margins, due
to the relatively constant trends in operating, interest and tax expenses. For example, DCM’s net
margin rose from 18.50% in 2021 to 27.13% in 2022, fell to 8.83% in 2023, and then recovered
to 11.80% in 2025. In the same way, DPM has increased from 24.80% to 29.98% but has then
seen a dramatic decline to 3.90% and is now back up to 6.61%. These shifts are similar to the
cycles in the industry and not significantly related to fluctuations in expenses, which are gradual
and predictable.
For DHB this relationship is not true. It has low operating expenses, no tax burden and a net
margin that increases from 0.01% in 2021 to 27.62% in 2022 and 19.45% in 2023, but then drops
to almost nothing thereafter. This abnormal pattern is driven more by the extreme level of
interest expense behavior and the reversal of interest costs in 2023, and not by sustainable
operating improvements. This indicates a low level of earnings quality, as financial and
accounting factors have a greater impact on the profitability of DHB than does its core business.

C.​ Return on Assets (ROA)

Appendix 10 shows the Return on Assets for Đạm Cà Mau (DCM), Đạm Phú Mỹ (DPM), and
Đạm Bắc Hà (DHB). The ROA of DCM is cyclical from 2021 to 2025, with the bulk of the
variation reflecting variations in profitability. DCM’s ROA increased from 18.43% in 2021 to
34.20% in 2022, before falling sharply to 7.54% in 2023, and then gradually recovering to
11.75% in 2025. Meanwhile, the average total assets of DCM increased gradually from VND
9,895 billion to VND 16,687 billion (Appendix 11) during the same period. The high volatility
of ROA is readily understood as being driven by the volatility of net income, rather than asset
size, as assets have increased steadily over the past few years. The increase in 2022 was driven
by unusually high profits in the fertilizer price boom and the decline in 2023 was due to reduced
profitability despite continued asset growth. The recovery following is also return-based, as the
ROA trend of DCM is clearly return-based.
The same trend is seen in the case of DPM. DPM’s ROA rose from 24.72% in 2021 to 35.20% in
2022, then dropped sharply to 3.35% in 2023 and only modestly recovered to 6.25% in 2025.
The average total assets of DPM also did not change significantly over time (from VND 12,609
billion to VND 17,164 billion), similar to DCM. This means that the changes in DPM's ROA
were primarily due to changes in earnings, and not asset changes. But DPM's recovery in ROA is
significantly weaker than DCM's, indicating a less rapid recovery in profitability from the
industry downturn.
DBH, on the other hand, has a very different ROA-ASSET relationship. The average total assets
of DBH have been steadily reduced from VND 8,325 billion in 2021 to VND 6,017 billion in
2025, but the ROA of DBH has fluctuated wildly from near zero in 2021 to 22.79% in 2022,
11.98% in 2023 and back to almost zero in 2024 and 2025. This means that DBH's ROA is not
only return driven but also affected by volatile earnings and perhaps non-operating. The
decreasing asset base and fluctuating profits reduces the usefulness of ROA as a measure of
operating efficiency for DBH.

D.​ Return on Equity (DuPont Analysis)

The DuPont breakdown of ROE of Đạm Cà Mau (DCM), Đạm Phú Mỹ (DPM) and Đạm Bắc Hà
(DHB) is provided in Appendix 12. The ROE of DCM is primarily affected by EBIT margin and
Total Asset Turnover, with the impacts of tax, interest and leverage being secondary but not
insignificant. DCM's tax burden and interest burden are relatively stable over the years
2021-2025, so that the ROE does not vary significantly due to tax benefits or financing costs. In
contrast, the ROE performance is closely linked to the movements of the EBIT margin and asset
turnover, with the sharp increase in ROE in 2022, the decline in 2023, and the recovery to
18.71% in 2025. This means that the profitability of the market and the ability of the company to
use its assets efficiently to produce sales will greatly determine the returns that DCM will
provide to its shareholders. The DuPont analysis also shows an important relationship between
leverage and interest burden. The leverage of DCM (Assets/Equity) rises over time from 1.43 in
2021 to 1.59 in 2025, thus having a positive amplifying effect on ROE. In the meantime, the
interest burden (EBT/EBIT) decreases marginally over time, meaning that interest expenses have
a more negative impact on ROE over time. The data indicate, however, that the positive impact
of raising leverage outweighs the negative impact of reducing the interest burden. This implies
that while DCM's interest expenses are higher as a proportion of its net worth, the extra debt is
also being used to increase the number of assets available in comparison with equity, thereby
increasing returns to the shareholders.

DPM also has a similar DuPont structure, with ROE primarily affected by EBIT margin and
asset turnover, and with relatively constant tax and interest loads. DPM's ROE, however, has had
a more pronounced decline after 2022 and has bounced back at a slower pace, which is why its
ROE rebound to 9.64% in 2025 is significantly less than that of DCM. DPM also has moderate
leverage, but the leverage/interest burden relationship is not as pronounced as in DCM.

DBH, on the other hand, has a very different DuPont profile. It has a very high and unstable
leverage, and high interest cost fluctuations. This means that the ROE reported by DBH is highly
influenced by the capital structure and not by the operating performance and that the ROE can go
from negative to abnormally high values. This is why DBH's ROE is not as indicative of real
operating efficiency and is not as comparable to DCM.

E.​ Summary
The profitability analysis shows that DCM was less profitable than DPM in the high fertilizer
price period 2021 - 2022, and more profitable than DPM in the subsequent period (2023 - 2025)
when market conditions returned to normal. DPM's gross margins, EBIT margins, ROA and
ROE were higher than DCM's in the boom year of 2022, due to more favorable prices for
fertilizers. Overall, DCM's profitability was more resilient and faster to recover, and remained at
a higher level than DPM in the following years as prices fell significantly in 2023 and the
industry returned to more 'normal' conditions. This is a major difference, DPM seems to perform
better in extreme upcycles, while DCM actually does better in a normalized and downcycle
environment.

This is because the financial structure is not the primary driver of this pattern; rather, it is the
operational efficiency. The margins experience a clear cyclical profitability trend as seen in DCM
and DPM with margins rising in 2022, falling in 2023, before gradually recovering. Their
DuPont analysis shows that the ROE performance is mostly influenced by operating performance
(EBIT margin and asset turnover). But in a period of declining prices, DCM showed better cost
control, more stable plant operations and more efficient asset utilization, which enabled it to
maintain its profitability better than [Link], the profitability pattern is quite different for
DBH as compared to both firms. The margins and returns are not consistent and are sensitive to
leverage, fluctuating interest burden and accounting effects but not to sustainable operating
performance. This makes DBH's profitability ratios less meaningful measures of true efficiency
and not easily comparable to the performance of DCM and DPM, which are closely linked to the
industry cycle and operational fundamentals.
Overall, the evidence suggests that DCM is currently beating its nearest competitor DPM with a
more operationally resilient and less extreme favourable market dependent profitability. DPM
has a tendency to perform best in boom times, whereas DCM's performance during industry
normalization is more indicative of efficiency, cost discipline and asset utilisation, which are
more likely to be sustainable over the business cycle.

VI.​ Financial Analysis - Liquidity

A.​ Current, Quick, and Cash ratio
The current, quick and cash ratio of Đạm Cà Mau (DCM), Đạm Phú Mỹ (DPM), and Đạm Bắc
Hà (DHB) are presented in Appendix 14. The current assets of each company are given in
Appendix 15. The liquidity position of Đạm Cà Mau DCM in 2021-2025 should be compared
with the typical manufacturing industry, in which the current ratio is about 1.5 – 2.0× and the
quick ratio is about 0.8 – 1.2×, which is considered good because production firms are
inventory-intensive (BPR Global, 2026).

DCM already had a pretty good head start on these benchmarks in 2021, with a current ratio of
2.28 and a quick ratio of 1.59. This is a result of the composition of current assets, which consists
of 60% held to maturity investments, 30% in inventory, and 6% in cash and cash equivalents.
This means that liquidity was provided not through idle money but through significant financial
investments in the short term that could be turned into cash on demand, showing conservative
treasury management and good working capital coverage.

Liquidity ratios also increased significantly in 2022, with the current ratio reaching 4.04 and the
quick ratio reaching 3.25, and the cash ratio went from 0.13 to 0.74. This was an extraordinary
level, well above normal manufacturing standards, and was stimulated by the fertilizer price
boom. The asset mix reflects this as cash and cash equivalents increased to 18% of current assets,
held to maturity investments stayed high at 59%, and inventory decreased to 20%. The firm was
simply sitting on excess liquidity because of unusually high profits, not because of an actual rise
in liquidity needs.

Liquidity ratios have been in a steady downward trend from 2023 but still above benchmark. The
normalization is in line with the changes in the structure of current assets. Despite the industry
downturn, cash was still high in 2023 at 17%, inventory decreased further to 16%, and
held-to-maturity investments remained dominant at 61% indicating that DCM was in a very
liquid position. The trend was more pronounced in 2024, as held-to-maturity investments fell to
54%, inventory rose to 23% and receivables rose to 4%, reflecting a reallocation of resources
back into operating assets and away from financial assets.

The liquidity structure had definitely normalized by 2025. The current ratio fell to 2.43 and the
quick ratio to 1.62, but both remain above manufacturing standards. However, the composition
of current assets changed significantly: cash rose to 25%, held-to-maturity investments dropped
sharply to 28%, inventory increased to 33%, and receivables rose to 9%. This suggests a shift
from a liquidity profile that was more oriented towards financial investments in the boom years
to one that is more oriented towards the core operating needs, where the working capital is linked
with inventory and trade receivables.

This is supported by the trend of the cash ratio. Cash levels reached their peak in 2022, but
declined in 2023-2024 and started to increase again in 2025. Notably, the surge in cash in 2025
occurred without significant additional financial expenditures, indicating a more well-rounded
approach to liquidity management rather than a strategy of sitting on cash.

In summary, DCM's liquidity profile is robust, not only in response to the downturn, but also in
terms of disciplined working capital reallocation after an abnormal profit cycle, when compared
to industry sector benchmarks and the composition of current assets. The transition to a
sustainable and operationally oriented liquidity structure by 2025, in which held-to-maturity
investments are increasingly replaced by inventory, receivables and cash, is indicative of this.

At the end of the period, the liquidity of DCM seems to be robust when compared with DPM and
DBH, but at the same time the liquidity of DCM is also more balanced when compared to the
other two companies. DPM consistently maintained high current and quick ratios during
2021-2023 (current ratio as high as 6.45 and quick ratio as 5.16 in 2023) even surpassing the
already high ratios of DCM. But Appendix 15 reveals that this was mostly due to an unusually
high proportion of held to maturity investments, which increased from 36% of current assets in
2021 to 72% in 2024 and then subsided to 54% in 2025. Meanwhile, DPM's cash position
decreased consistently from 27% to 8% by 2025, and inventory dropped to 13% in 2024, but
climbed back up. This means that the liquidity of DPM was financial-asset based and not
working capital or operational circulation based during the boom years. The sharp decline in
DPM's cash ratio from 1.17 in 2021 to 0.19 in 2024–2025, despite high aggregate cash ratios
(1.49 in 2025) (Appendix 16), further supports the fact that liquidity was not in the form of cash,
but rather financial placements. In contrast, as mentioned, DCM's liquidity normalization by
2025 indicates a more distinct shift towards operating assets. The structure indicates that the
company's liquidity is becoming more production and sales oriented than it is investment
oriented, which is more sustainable for a manufacturing company than DPM's investment-heavy
structure, even if it is not as liquid as DCM.

The case of DBH is completely different. In the current year, 2021–2022, its current and quick
ratios were very low, and only rose to moderate levels by 2025 (current ratio 1.23, quick ratio
0.77) which is below the manufacturing adequacy benchmarks. DCM and DPM had a consistent
inventory component (50-61% of current assets and 20-23% of receivables) and a small
held-to-maturity investments component (2-5%) while DBH had a large inventory component
(50-61% of current assets and 38% of receivables). In later years, cash accounted for
approximately 26–29% of total assets, but the lack of cash investments and the dominance of
slow moving operating assets accounts for the continued low aggregate cash ratio (below 0.40)
during this period. This reflects structurally weak liquidity, in which working capital is used to
support resources, rather than financial buffers.

In general, the current and quick ratios of DCM are well above manufacturing industry
standards, and the current ratio of DBH is below standards, but limited by slow moving
inventory and receivables. However, when compared with DPM, it is not easy to draw a
conclusion whether DCM is more or less liquid. Both companies have very strong liquidity
positions; however, they have different liquidity management strategies. DPM's liquidity is
mainly driven by the high proportion of held-to-maturity financial investments, while cash and
operating working capital make up an increasing proportion of DCM's liquidity by 2025. This
means a difference in liquidity rather than a difference in liquidity strength.

VII.​ Financial Analysis - Leverage

A.​ Debt-to-Equity Ratio
The Debt-to-Equity Ratio of Đạm Cà Mau (DCM), Đạm Phú Mỹ (DPM) and Đạm Bắc Hà
(DHB) are presented in Appendix 17. The Interest bearing Debt-to-Equity Ratio of the three
companies are displayed in Appendix 18. Appendix 19 shows the composition of liabilities of
each company while Appendix 20 shows the Interest Bearing Debt composition by Maturity.
The leverage profile of DCM for the 2021-25 period is evident of a shift from low debt and
working-capital funded structure in the fertilizer boom to a more debt supported structure in the
normalisation of industry conditions. When examined in conjunction with the Interest-bearing
Debt-to-Equity ratio and the makeup of liabilities, this evolution is more apparent.

DCM's Debt-to-Equity ratio was 48.06% in 2021 and Interest-bearing Debt-to-Equity ratio was
9.25% in 2021. This difference is due to the fact that the majority of liabilities were non-interest
bearing, mainly accounts payables (22%), accrued expenses (15%), science and technology
development fund (11%) and other operating payables. The short-term interest-bearing debt is
VND 689 billion and the long-term debt is negligible. This meant that much of the leverage in
2021 was of an operational nature.

A significant decline was observed in the DCM's Debt-to-Equity ratio, which dropped from
41.52% in 2021 to 33.58% in 2022, and the Interest-bearing Debt-to-Equity ratio decreased from
0.32% to practically nothing in 2022, the peak profitability year. The amount of short-term
interest bearing debt was reduced to just VND 3 billion. Meanwhile, provisions payable (19%)
and the science and technology development fund (19%) accounted for a big chunk of liabilities.
This indicates that, almost entirely, DCM has deleveraged financially, using its own cash to fund
its operations rather than borrowing. This is in line with the exceptional liquidity that we saw in
the same year.

Leverage started to increase again from 2023 onwards. Debt-to-Equity increased to 52.95% in
2023, 54.55% in 2024, and 63.45% in 2025. Most importantly, the Interest-bearing
Debt-to-Equity ratio increased from 8.52% to 13.26% and finally to 21.15%. The short-term debt
rose sharply from VND 846 billion (2023) to VND 1,229 billion (2024) and VND 2,226 billion
(2025) while the long-term debt was negligible. Interest-bearing debts made up 33% of total
liabilities by 2025, making it the single largest liability component. This shows that there is a
structural change: DCM was increasingly switching from its own funds and operating payables
to more short-term bank financing as profits returned to normal and working capital
requirements increased.

The difference in leverage strategy is apparent when compared with DPM. DPM's
Debt-to-Equity ratio was significantly lower for 2021-2023 (29.92% to 15.28%) and
Interest-bearing Debt-to-Equity ratio was very low (1.89% to 0.03%). However, in 2024 and
2025, DPM’s Interest-bearing Debt-to-Equity surged to 31.68% and 36.60%, far exceeding
DCM’s 13.26% and 21.15%. This is explained by the sharp rise in DPM’s short-term debt from
VND 0 in 2023 to VND 3,422 billion (2024) and VND 4,164 billion (2025). The percentage of
interest bearing debts was 67% for DPM as against 33% for DCM by 2025. As such, both
companies have seen their borrowing rise since the boom, but DPM has become much more
heavily geared than DCM.

The leverage profile of DBH is an entirely different and riskier one. It has extremely high and
volatile Debt-to-Equity ratios ranging from –505% to 815% which indicate that its equity is
weak and it is heavily relying on debt. Interest bearing debts always accounted for 41-60% of
liabilities, including a significant amount of long-term debt (VND 3,239 billion in 2021 and
VND 1,995 billion in 2025). The leverage of DBH is structural and distress-driven, as opposed to
DCM and DPM. This accounts for the extremely high interest expense percentages noted
previously and the weak earnings.

The nature of liabilities supports these findings. DCM maintained a significant proportion of
non-interest bearing liabilities, including accounts payable (26–38%), customer advances (up to
10% in 2025), internal funds and accrued expenses. In 2025, even with the leverage at its peak,
two-thirds of DCM's liabilities were non-interest bearing. By contrast, DPM's liability mix in
2024-2025 shifted to be dominated by bank debt, and in DBH's case, the liability mix has always
been dominated by debt and “other payables” instead of operating liabilities.

All things considered, DCM is less financially leveraged than both DPM and DBH and the
leverage pattern is counter-cyclical and relatively prudent. While DCM's leverage rose following
2023, just one-third of its liabilities in 2025 are interest-bearing, with the company continuing to
make heavy use of operating payables and internal funds. By contrast, DPM's leverage in
2024–2025 becomes more and more interest bearing, with approximately two thirds of its
liabilities falling into this category, whereas DBH is the most leveraged company over the entire
period as its debt is structurally high, equity is weak and long term borrowing is large. During
the profit boom in 2022, DCM reduced its debt significantly and only slowly began to take on
short-term debt as cash reserves shrank and working capital requirements increased. DCM's
capital structure is more flexible and conservative in the post-boom period, with a relatively high
proportion of non-interest-bearing liabilities, and mainly short-term, operationally driven
leverage.

B.​ Interest Coverage Ratio

Appendix 21 shows the Interest Coverage ratio of Đạm Cà Mau (DCM), Đạm Phú Mỹ (DPM),
and Đạm Bắc Hà (DHB). The solvency of DCM is very high over the 2021-2025 period, and is
always stronger than that of DPM and DBH during the entire period. For 2021, DCM already
had a very high debt-servicing capacity with an interest coverage of 104×, which is almost
double the coverage of DPM (56×) and much better than DBH (1.00×). This means that for
every dollar of interest that DCM pays, it can cover the cost more than one hundred times over
with its operating profit. That's a low level of financial risk. The coverage increased to an
unparalleled 460.60× in 2022, as EBIT grew significantly, but interest expense was almost
eliminated during the period of fertilizer price boom. DPM also had an improvement to 102.63×,
but it was still far off of DCM. In comparison, DBH was only able to improve to 3.35×, a weak
rating for a manufacturing company.

The interest coverage ratio decreased to 126.40× in 2023, 35.59× in 2024 and 32.53× in 2025, as
industry profitability declined and DCM started to increase short-term borrowing from 2023
onwards. This is a definite downward trend, but these still reflect very high levels of solvency. In
capital-intensive industries, a coverage ratio above 3.0× is considered very safe (DeltaValue
GmbH, 2026) and even in 2025 the coverage ratio of DCM is more than ten times higher.

The gap is more noticeable in the older ages compared to DPM. DPM’s interest coverage
dropped sharply from 102.63× (2022) to 14.55× (2023) and further to 10.53× (2025). This is a
consequence of DPM's fast growth in interest bearing debt since 2023, which placed a heavy
burden on its finances. This is because, by 2025, the coverage of DCM (32.53×) is more than
three times that of DPM, even though both firms are based in the same industry environment.

The solvency position of DBH is structurally weak during the period. The coverage ratios are
roughly 1× in 2021, 2024 and 2025, indicating that EBIT is just about covering the interest
expense. Despite best performance in 2022 (3.35×), DBH is still in a hazardous solvency
 position relative to its peers. This proves that the capital structure of DBH is distress driven and
the firm is highly sensitive to any reduction in operating profit. Also, it is essential to note that
the interest coverage ratios can be misleading as to the company's actual financial health. Interest
payable to Vietnam Development Bank, Northeast Regional Branch is a large part of DBH's
liabilities, accounting for about 40% of total liabilities. This means that DBH has a significant
proportion of unpaid financing costs which are not included in the simple EBIT-to-interest
expense ratio. Additionally, as mentioned above, DBH's reported earnings are heavily dependent
on accounting treatments and non-recurring items, and not on the sustainable operating activities.
Therefore, the EBIT figure employed in the coverage ratio could be an unstable cash generating
capability. Thus, the ratios do not necessarily reflect the actual solvency of DBH. For reasons
beyond the scope of this analysis, the metrics discussed below are not the target company of
DBH, so the discussion does not apply to adjusted solvency calculations; however, this limitation
should be taken into account when interpreting the metrics reported by DBH.

Overall, DCM has a significantly better capacity to service its interest obligations than both
DPM and DBH for 2021–2025. Despite the recent downturn in industry profitability and the
slow introduction of short-term debt, DCM's interest coverage is still very comfortable, well
above the conventional safety margins, and multiple times higher than its peers. This strength
comes largely from the fact that the capital structure of DCM is conservative with a significant
proportion of non-interest bearing liabilities, the deleveraging of the capital structure during the
boom in profits and a focus on internally generated funds, as opposed to bank borrowing. This
makes the interest burden of DCM structurally low in comparison to its operating earnings. By
contrast, DPM's reliance on interest-bearing debt after 2023 places a great strain on its finances,
and DBH's thin equity position, high long-term debt, and less reliable earnings coverage ratios
make its debt position much more vulnerable. DCM's high interest coverage is not coincidental,
but rather a conscious and sound financing policy that keeps debt-servicing ability robust in
varying market environments.

VIII.​ Financial Analysis - Efficiency

A.​ Asset Turnover Ratio
Appendix 22 shows the Asset Turnover ratio of Đạm Cà Mau (DCM), Đạm Phú Mỹ (DPM), and
Đạm Bắc Hà (DHB). DCM’s asset turnover ratio rose from 1.00 in 2021 to a peak of 1.26 in
2022, then eased to around 0.86–0.87 in 2023–2024 before recovering to 1.00 in 2025. The asset
turnover ratio of DCM was within the healthy range of 0.8–1.5x during the period, which is
typical for chemical and fertilizer manufacturing companies where assets are significant (Ul
Haque, 2026b). The exceptional fertilizer price cycle increased revenue, and the asset base grew
at a rate lower than revenue, which caused the increase in 2022. The drop at the end of the period
is due to price normalization and the recovery in 2025 is due to sales conditions and capacity
utilization. The trend of DCM is similar with Đạm Phú Mỹ (DPM) which started from 1.01 to
1.18, and then lowered to 0.88–0.90 before increasing to 0.97 in 2025, staying within the
benchmark range of 0.8–1.5× (Ul Haque, 2026b). This alignment is anticipated because both are
urea producers, both are gas-based producers with similar size plants, both have similar asset
structures, and both are subject to the same price cycles in the industry. Đạm Hà Bắc (DHB), on
the other hand, has materially lower ratios ranging from 0.54 to 0.72, which are consistently
lower than the normal range. This suggests structural inefficiencies associated with older,
coal-based technology and operating costs that reduce revenue generation from its asset base.
Overall, asset utilization is solid and similar to DPM, and much improved compared to DHB.

B.​ Account Receivable Ratio

Appendix 23 shows the Account Receivable ratio of Đạm Cà Mau (DCM), Đạm Phú Mỹ
(DPM), and Đạm Bắc Hà (DHB). The receivable turnover ratio of DCM was extremely high in
2021-2022 (219x and 692x) which is far beyond the industry average, and much higher than
DPM and DHB (Ul Haque, 2026b). This is an unusual increase that is closely related to the
fertilizer supply shortage in 2022, when fertilizer prices reached a new high and supplies were
limited. At this time the buyer had little bargaining power, and would pay quickly or even in
advance for supply. The extraordinary turnover ratio is probably due to the fact that DCM was a
major domestic producer and had a very short credit term or sales were largely cash based. The
ratio decreases dramatically thereafter to 125x in 2023, 54x in 2024 and 34x in 2025. The drop is
the result of a return to normal market conditions following the easing of the supply shortage.
With an increase in the supply of fertilizers and competition, customers started getting back their
bargaining power and DCM had to give more trade credit and also longer collection periods. By
contrast, DPM has a more consistent and sensible receivable turnover, which dropped from 52x
to 25x during the period. DHB has a consistently low turnover (18x–32x) which means the
collection is not rapid and the cash conversion is not efficient. Most significantly, the overall
trend of both firms is similar in that both have seen a steady decrease over time in the number of
times that the receivables are turned over. Even though DCM's receivable turnover has dropped,
it is still higher than DPM's (25x) and DHB's (19x), indicating that DCM is still able to collect
cash quicker than its peers. Overall, the credit policy of DCM has shifted from an extraordinary
cash-advantaged position during the supply crisis in 2022 to a more normalized policy, but with a
better receivable management process than DPM and DHB.

C.​ Inventory Turnover Ratio

Appendix 24 shows the Account Receivable ratio of Đạm Cà Mau (DCM), Đạm Phú Mỹ
(DPM), and Đạm Bắc Hà (DHB) while Appendix 25 shows the Average Inventory level over the
years. The inventory turnover ratio of DCM remained within the normal range of 4-8x in the
years 2021, 2022, 2023, and 2024 (4.67x, 4.56x, 4.74x, 4.28x) indicating that the company has a
reasonably good inventory management system for a manufacturing company (Ul Haque,
2026b). This ratio drops to 3.24x in 2025, which is below the average range. If you look at the
driver in conjunction with average inventory, you'll see the driver. The average inventory of
DCM has increased continuously from VND 1,519 billion in 2021 to VND 2,555.5 billion in
2024 and sharply increased to VND 3,879.5 billion in 2025. This substantial increase in
inventory with no commensurate increase in cost of goods sold will automatically lower the
turnover ratio. The data suggests that the drop in turnover in 2025 is more likely due to inventory
growth than to poor sales. DCM's inventory growth is more significant than that of its peers.
DPM's average inventory is more stable, reaching VND 3,323.5 billion in 2022, dropping to
VND 1,821 billion in 2024, and then rising to VND 2,582.5 billion in 2025. Accordingly, the
inventory turnover of DPM is still in a comfortable range of 4-8x, with the figure even
improving substantially in 2024 (6.37x) with a lower level of inventory. In the meantime, DHB
has kept the average inventory base at a low and stable level (VND 500-700 billion) ensuring the
high turnover ratio (around 6-7x). This high turnover is more structural for DHB, as they have
smaller scale operations, than it is because of better inventory efficiency. Thus, the inventory
turnover ratio of DCM in 2025 could be interpreted as a sign of the company's inefficiency, but
the average inventory data indicates otherwise, meaning that the company is likely to be making
an effort to hold onto more inventory. This is most likely related to risk management due to
volatility in input prices and supply risk on the fertilizer markets. Conversely, DPM controls
inventories more closely to meet the operational requirements and DHB's high turnover is due to
the smaller size of its inventories.

D.​ Account Payable Turnover Ratio

Appendix 26 shows the Account Receivable ratio of Đạm Cà Mau (DCM), Đạm Phú Mỹ
(DPM), and Đạm Bắc Hà (DHB). DCM’s accounts payable turnover rises from 9.43x in 2021 to
11.21x in 2022, before falling to 6.99x in 2023 and 6.08x in 2024, then partially recovering to
7.45x in 2025. This ratio reflects the speed at which a company pays its suppliers and the trend
reveals a change in payment habits. During the fertilizer price boom in 2021 - 2022, DCM paid
its suppliers relatively quickly, and with this payment, profitability was high and cash generation
was strong. The lower turnover from 2023 onwards implies that DCM extended payment terms,
perhaps through supplier credit as margins returned to normal and working capital requirements
rose, particularly given the significant increase in inventory levels seen during 2024-2025. The
slight uptick in 2025 indicates some normalization but still higher payable days than the peak
years. DCM is ranked between DPM and DHB when compared to peers. DPM is consistently
increasing, from 13.07x to 20.01x, which means that over time, DPM pays suppliers more and
more quickly. This is in line with the fact that DPM has a strong liquidity position and less
dependence on trade credit. It could also be due to tougher payment conditions from the
suppliers or DPM's desire to ensure the input supply through timely payment, particularly since it
is gas-based production. As opposed to this, DHB's payable turnover is relatively stable around
8-11x, which is similar to that of DCM, indicating that it is more typical in terms of the reliance
on supplier credit, as it is also coal based and has weaker liquidity. In total, DCM's reduced
payable turnover following 2022 should not be seen as a sign of inefficiency. Rather, it was a
result of the working capital management strategy: Profitability was falling and inventories were
rising, so DCM was managing cash flow by pushing out payment terms with suppliers. This puts
DCM in a more similar position to DHB's credit usage pattern, whereas DPM has a very good
cash buffer and a very good working capital discipline that allows it to pay suppliers much
quicker.

E.​ Summary

It is not possible to reach a simple conclusion of “better or worse” for DCM's efficiency
compared to DPM and DHB due to the fact that the ratios represent different operating or
working capital strategies rather than a pure operational superiority. With respect to asset
utilization, DCM is similar to DPM and significantly better than DHB. DCM and DPM are
within a healthy range of asset turnover for capital-intensive fertilizer producers and have similar
movements as a result of the same industry price cycle. The ongoing weakness in DHB's asset
turnover is due to structural technological and cost disadvantages and not cyclical. This means
that the core production factors of DCM are utilised efficiently and competitively when
compared to other companies in its industry. In the case of receivables management, DCM can
be seen to have the highest cash collection efficiency during the period. Despite the unabnormal
surge in the supply shortage in 2022 being brought back to normal levels, DCM is still getting
cash in quicker than DPM and DHB. This indicates that the company has a better bargaining
position with the customer and credit control, which will benefit DCM in cash conversion. But
the situation of inventory and payables is different. The inventory turnover is not a weakness of
DCM, but rather a strategic action to stockpile inventory, presumably due to input price
fluctuations and supply risk. Meanwhile, DCM has been pushing back payment terms to
suppliers following 2022, and has been making greater use of trade credit to meet working
capital requirements. DPM, meanwhile, has been more disciplined about managing inventory,
and is paying suppliers even faster, as it looks to be more disciplined about working capital.
DHB's ratios are more a reflection of its size and structure than good management. So, DCM is
not necessarily “more efficient” than DPM on all measures. On the contrary, DCM demonstrates
a good operational efficiency (asset use and receivables collection), and a more flexible working
capital policy, with increased inventories and extended supplier credit. By comparison, the ratios
of DPM indicate a tighter discipline of working capital, and the ratios of DHB are mainly driven
by structural constraints. These efficiency ratios, therefore, reflect primarily the various financial
and operating policies adopted by the firms and not any definite evidence that one firm is
consistently superior to the others.
IX.​ Financial Analysis - Valuation
The high and volatile leverage, high interest payments to the Vietnam Development Bank, and
accounting for earnings instead of regular operating performance all have a significant impact on
DBH's profitability, as was discussed earlier. These factors can skew important ratios like P/E,
P/B, and EV/EBITDA, as the denominator of these ratios is not based on sustainable cash
generating capacity. Moreover, because of DBH's high Debt to Equity ratio and structurally weak
solvency, it is in a fundamentally different risk category as compared to DCM and DPM which
have stable equity bases and operation driven earnings. Therefore, the analysis is not based on
the more comparable peer, DPM, and comparing DCM with DBH using market multiples would
not be useful in understanding relative valuation.

A.​ Price to Book (P/B) Ratio

Appendix 27 shows the P/B ratio of Đạm Cà Mau (DCM) and Đạm Phú Mỹ (DPM). The
Price-to-Book (P/B) ratio is used to show the market's valuation of a company based on its
accounting equity and is especially meaningful for companies with a high level of assets, such as
capital intensive fertilizer producers, in which the assets are tangible. DCM's P/B ratio is always
higher than DPM's each year from 2021 to 2025. DCM rises from 1.66× (2021) to 1.95× (2022),
falls to 1.41× (2023) as fertilizer prices normalize, then rebounds to 1.91× (2024) and 1.77×
(2025). In contrast, DPM moves from 1.20× to 1.60×, drops to 1.10×, and recovers modestly to
1.33× by 2025. The valuation premium is consistently present, implying that the market is
systematically valuing DCM higher than DPM, perhaps because of the higher quality or better
prospects. The increases for both companies in 2022 are associated with the fertilizer price rally,
which saw investors' expectations raised by high profits. But what is the point to be noticed is
after the boom. In 2023, both companies see a decline in P/B as earnings normalize, however,
DCM still trades at a relatively higher multiple (1.41x vs 1.10x). More important, in 2024-2025,
the P/B of DCM is very strong, and the recovery of DPM is not very strong. This difference is in
line with the previous analysis, which shows that DCM is more profitable, has a better degree of
liquidity, leverage, and efficiency. A higher P/B ratio means that investors feel DCM is able to
make a return on capital invested greater than the book value of its assets in a more sustainable
way than DPM. It also suggests increased confidence in the asset quality, earning stability and
financial flexibility of DCM. The market seems to think that DCM's working capital
management, liquidity management and conservative leverage is more attractive than that of the
other company, but both companies have similar plants and industry conditions. Overall, the
market appears to value the company at a premium, as evidenced by DCM's higher P/B ratio,
which indicates that the market values the company for its perceived financial strength and better
performance after the boom, despite the fact that the companies' asset sizes and industry
exposure appear comparable.
 B.​ Price to Earnings (P/E) Ratio

The P/E of the plants is presented in Appendix 28 of Đạm Cà Mau (DCM) and Đạm Phú Mỹ
(DPM). The P/E ratio is the price investors are willing to pay for every dollar in current earnings,
and is very sensitive to changes in the earnings of commodity businesses like fertilizer. Before
the fertilizer price boom, the market valued DCM's earnings higher as evidenced by its higher
P/E ratio, of 14.76 compared to DPM's 11.03. During the supply shortage and price surge in
2022-2023 both companies saw a significant decrease in their P/E (around 4-5x) figures. The low
P/E in these years is not the sign of undervaluation but rather the result of temporarily inflated
profits, which automatically lead to a lower ratio. The significant comparison would be in
2024-2025 when earnings are back to normal. A clear separation is here seen. DCM's P/E ratio
climbs back towards its pre-boom level at 14.00× and 11.55×. The company's P/E ratio, however,
changes drastically in DPM, to 20.23× and 24.20×, respectively. This is not to say that the
market thinks more highly of DPM; rather, it simply indicates that its earnings have not been
growing as quickly as its stock price has risen since the boom. This is because when investors
buy stock in a company like DPM, they pay more per unit of the company's earnings, due to
lower normalized profits. In 2024–2025, DCM has a more moderate P/E ratio, indicating that its
earnings bounced back more robustly and sustainably following the boom, and thereby remain in
a reasonable range of historical multiples. This is consistent with previous results which showed
that DCM is more resilient, more solvent and has a more balanced working capital management
during the later years when compared to DPM. An overall picture shows that both firms are
showing very low PE during the boom period from 2022-2023, with both companies showing
exceptional profits, but the difference becomes most apparent in the post-boom period when the
PE of DCM is bringing it back to a reasonable level while in DPM the normalized earnings are
weaker leading to an unusually high PE. This means that the earnings quality and recovery of
DCM is seen as being better and more sustainable than DPM's.

C.​ EV/EBITDA Ratio

The P/E ratio of Cà Mau Đạm (DCM) and Cà Mau Đạm (DPM) are displayed in Appendix 29.
The EV/EBITDA ratio reflects the market's attitude toward a company's operating cash flow
unleveraged by its capital structure. This is particularly helpful for cyclical fertilizer producers to
value cash flow from an operation accounting perspective as it eliminates some of the distortions
that occur when leverage, taxes, and depreciation and amortization changes are a significant
factor for asset-heavy manufacturers. Post-fertiliser boom, DCM is currently trading at 5.41×
compared to DPM's 5.99×, indicating broadly similar valuation for operating cash flow in 2021.
In 2022–2023, both firms’ EV/EBITDA fell sharply to around 2.7–3.5×. The strong increase in
EBITDA is fuelled by the exceptional performance in the last few years driven by the acute
shortage of fertilizer in the world market and the resulting high prices. These low multiples aren't
a sign of undervaluation, but rather the EBITDA was artificially boosted for a short time, which
pushed the ratio down for both companies. The main distinction comes in 2024-2025, when
industry conditions return to normal. DCM’s EV/EBITDA rises to 10.42× and 11.07×, while
DPM’s jumps much more aggressively to 15.70× and 20.34×. The difference is not caused by
accounting differences or by the fact that equity value and debt are also part of the denominator
in EV, as both of these are removed by subtracting out the leverage and depreciation effects in
the numerator of the EBITDA calculation. Rather, it reflects that DPM's EBITDA rebound was
weaker when compared to enterprise value, while the DCM's EBITDA rebound was stronger and
more in line with its valuation. This is in line with previous research: DCM has higher
profitability recovery post-boom. When the operating performance of the firms is isolated from
the capital structure and accounting effects, as is done in EV/EBITDA, investors are willing to
pay much more to get operating cash flow on the dollar for DPM in the latter years than for
DCM, thus primarily reflecting the difference in normalized EBITDA performance. The overall
picture is that both companies have valuations that are fairly similar before the boom and during
the boom, but the post-boom picture shows the difference: DCM's EV/EBITDA is back in a
reasonable range, while DPM's is unusually high, meaning that DCM's operating earnings are
higher than the market thinks and are likely stronger and more durable.

X.​ DCM Target Price Forecasting

A.​ Revenue and Net Income Forecasts
Before looking to forecast DCM's target price for 2026, it is essential to understand the reliability
of the company's target in the past. A consistent trend can be easily discerned in the annual
business plans DCM is setting from 2021 to 2025, when comparing planned with actual results.
As you can see from Appendix 30, DCM has a conservative revenue and profit horizon that is
often beaten in actual performance. The completion rate is higher than 100% in four of the last
five years, and significantly higher in 2021 (129%) and especially in 2022 (181%), during the
fertilizer boom. In 2024 and 2025, when the market was back to normal, DCM's revenue
collection increased by 17% and 23% respectively. Actual revenue was just slightly below the
plan (96%) only in 2023, the year following the boom when fertilizer prices tumbled. This
indicates a conservative approach to revenue planning by DCM, especially during market
fluctuations. The trend is even stronger when it comes to net income. In all the years except
2023, actual profit was a lot greater than planned profit. In 2021 (927%) and 2022 (842%) the
completion rate of the profit plan reached extraordinary levels, which demonstrated the
conservatism of the plan when compared to the profit generated from the high fertilizer prices.
Perhaps more significant, DCM was well on track to also beat its profit expectations even in the
post-boom years, with 180% of plan in 2024 and 253% in 2025. This first time in 2023, when
industry was on a large downturn, actual net income was below the planned level (80%). In fact,
this regularity suggests that DCM's management consistently takes a sound approach in the
setting of annual goals, especially in the area of profitability. Target pricing appears to be based
on conservative pricing and margin assumptions rather than optimistic forecasts. The company
has tended to meet its results well when the market is either stable or favorable, which is why it
is often able to achieve materially better results than planned. With a planned revenue of VND
17,615 billion and planned net income of VND 1,182 billion, the planned figures should be
considered for 2026. These are likely to be a conservative expectation, rather than a forecast
given that past performance is not a guarantee of future results. The analysis projects 2026
revenue and income using the average completion rate of the last three years with the company's
projections for those years, assuming those years represent a more normal operating environment
after the fertilizer price boom. As a result, the forecasted revenue and income are VND 19,774
billion and VND 2,023 billion, respectively. The analysis also reflects DCM's actual performance
in the first quarter to check whether the forecast for 2026 is realistic (Appendix 31). Revenue
already equals 27% of the forecasted full-year revenue and net income 39% of the projected
annual profit, which puts them well on track to achieve the targets. This confidence is further
buoyed by a positive market situation, especially the current war between the United States and
Iran. The war has affected global trade, including the Strait of Hormuz, which is an important
route for 25% of the world's fertilizer and energy shipments, and fertilizer supplies have been
tightening, with prices [Link] war is impacting global trade, including the narrow Strait
of Hormuz, which carries 25% of the world's fertilizer and energy shipments, and fertilizer
supplies are tightening, with prices rising (Angel & Veyet, 2026). The impact of these supply
shortages has already resulted in higher prices for Nitrogen and urea and have also benefited the
major producers with regards to their revenue and profitability for 2026 (Pandey, 2026). Add the
positive market conditions in the external market, and the forecasted revenue and net income for
2026 sound very achievable for DCM.

B.​ Target Price Forecast

The target price forecast is shown in the following Table 2, the calculation details for each
method is presented in Appendix 32:

Table 2: DCM Target Price Forecast

Valuation Method Forecasted Price

P/B 41,189

P/E 44,136

P/S 46,268

Target Price (Average of three methods) 43,865

As of May 12, 2026, DCM is priced at 43,450 VND per share on the market, close to the target
price, which reflects the intrinsic value of the stock. Therefore, it is recommended for investors
to hold the stock until there is new information that changes intrinsic value, or a price deviation
that creates a buy or sell opportunity.

Chart 3: DCM’s price on the stock market

XI.​ DCM Target Price Forecasting

A.​ Replace Part of Short-Term Bank Debt with Medium-Term Debt

One of the recommendations for Đạm Cà Mau (DCM) is to restructure a portion of their
significant short-term bank loans in order to shift them into medium-term debt, which has
maturities of 3-5 years. Meanwhile, the ability of the company to serve its debt remains very
high. The leverage and solvency pattern for the financial analysis for the period 2021-2025
directly supports this recommendation. According to the analysis, the Interest-bearing
Debt-to-Equity ratio of DCM has jumped significantly from 0.04% in 2022 to 21.15% in 2025,
along with an increase in short-term borrowings to VND 2,226 billion. The change reflects a
structural transition from 2021-2022, when the company was funded almost exclusively from its
own resources and from accrual based operating liabilities, to the post-boom period when the
working capital is financed more and more with bank financing. This increase in borrowing is
not yet a cause for concern, but the shift of debt into short-term maturities does pose a
refinancing risk that previously wasn't there. If the industry is cyclical, for example, fertilizer,
and things get less lucrative when prices return to their norm, some rollover financing can cause
unnecessary liquidity pressure during the downturn. Meanwhile, DCM's interest coverage ratio is
also quite high at 32.53× in 2025, well higher than the usual standard for capital intensive
manufacturing companies. This means that they are in a very advantageous position to negotiate
long-term financing on the terms of the company at reasonable rates because the lender has little
credit risk. In that context, the refinancing of some of the short-term debt into medium-term
loans or bonds would not affect the company's solvency, but rather would optimise the maturity
structure of its debts in advance and keep the credit metrics at a desirable level. This change
would not have a meaningful effect on leverage, but would greatly improve liquidity stability by
decreasing the need for frequent debt rollovers. Interest coverage would be ample, and the risk of
short-term insolvency would be reduced. More significantly, this recommendation allows the
company's capital structure to better match the cyclical nature of its business: DCM extends
maturities and thus the risk of periods of lower profitability occurring in times of high short-term
repayment demands are mitigated. The recommendation enhances DCM's capital structure's
resilience by not changing its conservative leverage position, which will help them withstand
industry downturns.

B.​ Lock in a Long-Term Gas Pricing Mechanism to Stabilize Gross Margin

For DCM, the other suggestion is to reach a long-term gas pricing arrangement with PV Gas,
which includes a part of the gas price smoothing, either by rolling average oil linkage or a collar
mechanism. It is strongly supported by the gross margin performance that occurred during the
entire 2021- 2025 period. DCM's gross profit margin surged to 35.82% in 2022 as a result of the
surge in fertilizer prices during that period, but dropped sharply to 16.16% in 2023 as the prices
for fertilizers returned to normal levels while natural gas prices continued to remain high. The
sharp compression came not because of low plant utilization, asset turnover or cost discipline
which were relatively stable. Instead, it was a situation where output prices have been very
sensitive to market conditions and gas prices for the inputs have been relatively high because
they have been tied to the price of oil in the world. The same margin pattern is seen at DPM,
indicating that this is not a weakness of the firm, as it is of the gas-based urea producers. Gas is
the largest input cost for urea production and therefore fluctuations in the price of gas will
correspond to fluctuations in gross margin and EBIT margin. For this reason, the analysis shows
that the volatility of inputs cost is the main driver of the profitability fluctuation throughout the
cycle. DCM can mitigate the amplitude of the margin swings without altering any of its
operations or market strategies by negotiating a gas pricing formula that will buffer short-term
oil price fluctuations. A more stable ratio structure would also lead to less variation in gross
margin and EBIT margin from one industry cycle to the next from a ratio standpoint. This, in
turn, would make the ROA and ROE more predictable, because the DuPont analysis indicates
that returns can be broken down into operating margins and leverage/tax effect. Stable gas prices
consequently stabilize the returns to shareholders. This, however, would not necessarily lead to
lower costs in the long-run, but would increase the ability of DCM to withstand unexpected
external energy price fluctuations, which would make the price more resilient in times of reduced
fertilizer prices.

C.​ Relaxing trade credit policy to enhance sales

 Lastly, the credit policy for customers should be moderately eased in Đảm Cà Mau (DCM) to
help revenue growth, because its liquidity position and the efficiency of the receivables show that
it is not making an optimal use of working capital. This recommendation is explicitly confirmed
by the liquidity and efficiency trends that were revealed in the financial analysis: 2021–2025.
DCM's analysis of accounts receivable turnover reveals that it is always outside of the "safe"
range for manufacturing companies, indicating that the company gets paid by its customers much
faster than industry average. This is an indicator of good receivables management and low credit
risk, but also suggests that DCM could potentially be disagreeing with distributors and
agricultural buyers on credit terms - potentially not the standard terms. A requirement for credit
terms more stringent than necessary can be an unintended consequence of credit constraints and
negatively impact DCM's ability to compete with other companies offering more lenient credit
terms, particularly in the fertilizer market where buying decisions may be influenced by credit.
Meanwhile, DCM's cash ratio is much higher than that of its peers, indicating the firm is not
constrained by liquidity. DCM has significant short-term cash flow and holds a large short-term
cash balance even after the post-boom normalization. This means that the business is not
dependent on quick sale of its receivables to keep its business going or to pay its short-term bills.
That is, the liquidity of DCM is quite robust and enables it to offer a somewhat longer credit
period without putting any strain on the firm's cash flow. A ratio analysis would show that
loosening credit policy would most likely bring the accounts receivable turnover ratio back to an
optimum ratio. This would lead to an increase in total asset turnover and would enable higher
sales without significant extra capital investment. The firm's liquidity ratios are already well
above safe limits so a moderate increase in the level of receivables won't compromise the firm's
solvency, but rather will translate excess liquidity into productive working capital which can be
used to generate revenue. More importantly, this is a suggestion that resonates with the
operational realities of the fertilizer industry! Fertilizer use is seasonal and demand driven by the
distributor and credit flexibility can be a commercial tool to grab market share during peak
planting seasons. With this strategic approach to easing credit terms for reliable customers, DCM
can reinforce its relationship with its distributors, boost order volumes with them and leverage its
solid financial position to create a competitive advantage. This is a way to use DCM's liquidity
and efficiency in its receivables to increase sales without conservative working capital policies
constraining the company's market potential.

XII.​ Conclusion