Investor Presentaiton
GBM
October 12, 2021
MDF WOOD BOARDS (P$6.1 PER SHARE)
Is the recent rally in MDF prices sustainable? Proteak's
MDF venture started on 2013 with the acquisition of
eucalyptus hectares and the project to build a mill, which
produced its first boards in August 2016. Meanwhile, macro
deceleration in Brazil caused a drop in construction, leading
MDF producers to export their boards at marginal prices to
keep their mills running. Therefore, market prices in Mexico
remained depressed between 2016 and 2019. Later, in 1H20,
macro uncertainty caused a production decrease, and the
strong demand that resulted took Proteak's/TEAK's 1H21
volumes (112,000 m³) 5.2% above 1H19 levels, while imports
have also recovered to pre-pandemic levels, per company
estimates. Prices have rallied, on account of the rebound in
demand and more rational competition, as the outlook for
construction has improved in Brazil, creating confidence that
current market prices are sustainable in the medium term.
Proteak's Implied Prices & Estimated Unit Cost
-Units in MXN thou.
9
6
3
0
5.72
5.52
5.08
4.75
5.02
4.50
4.45
4.16
2017
Source: Based on company filings
7.09
8.18
2018
2019
2020
1Q21
2Q21
Implied Price
Unit Cost (GBMe)
Brazil's Domestic Market Construction Index
25%
15%
13.1%
5%
-5%
-12.0%
-15%
2009
2010
4.1%
3.0%
1.4%
2011
2012
2013
Apr-2013:
Proteak announces acuisition
of eucalyptus fields
Aug-2016:
Proteak's mill produces its
first MDF boards
-6.6%
2014
-11,5%
-12.6%
2015
Source: Eucatex 2Q21 corporate presentation, based on data from the Brazilian Association of the Construction Materials Industry (ABRAMAT)
-4.0%
2.0%
1.2%
-0.3%
2016
2017
2018
2019
2020
24.4%
1H21
8.0%
FY21e
TEAK: AFTER ALL, MONEY DOES GROW ON TREES. | 19View entire presentation