MWG – the definition of flexibility in retail

Having found a certain success for Bach Hoa Xanh, MWG is replicating it to other regions and the results are promising so far. Even though break-even is not yet reached, Bach Hoa Xanh is doing great in terms of sales growth and customer awareness. Therefore, becoming profitable is just a matter of time in our opinion. Regarding The Gioi Di Dong and Dien May Xanh, the new CEO is bringing fresh ideas with new strategies to growth with more stores and an increase in same stores sales. Even though the stock price has gone up significantly, we believe it is still undervalued. Hence, we maintain our BUY recommendation.

FMC – 1H2019 Result Update

While exports of the industry in the first half of this year fell due to US- China trade tensions disturbing traditional shrimp trade flows across the globe, oversupply resulting from heavy investments in shrimp production by world major producers and the BREXIT event deteriorating consumer confidence in Europe, FMC still kept its impressive and sustainable profit growth. Product strategies announced at the 2019 AGM have proven its ability to improve profits.

BMP – Tracking the Annual Guidance Closely

BMP’s 6M2019 performance was in line with its guidance as most of the key figures have reached approximately 50% of the annual guidance. The company sold 50,800 tons of plastic pipe products during 6M2019, completing 52% of the annual target. Its revenue grew 15% yoy and was equivalent to 49% of the annual guidance. Its net profit reached VND 210 billion, also 52% of the annual target but was 6% lower yoy.

HAH – 2Q2019 Business Update

HAH's 2Q2019 business results started to show positive signs thanks to the strategic shift from port operation to container shipping back in 2014. Thanks to the early preparation, up to now, the shipping operation has gradually stabilized in terms of cargo volume and helped to ensure operational efficiency for Hai An Port itself. For 1H2019, container shipping segment has started to replace port operation as the largest contributor to the company's gross profit. Accordingly, gross profit from shipping has increased by 63%, accounting for 52% of gross profit structure of HAH. Furthermore, it is expected that the Government will implement policies to support the shipping industry in the near future. We believe that HAH can fully benefit from this owing to competitive advantages of the fleet.

Unexpected Aggressive Rate Cuts by Asia-Pacific Central Banks

Yesterday, there were three more central banks cutting their policy rates rather unexpectedly, namely India, Thailand and New Zealand (Figure 1). The level of aggressiveness really stunned us as well as surveyed participants. Those cuts seem to be directly associated with the gloomy perspective of GDP growth, caused by the spillover effects of the trade war. Similarly to the FED, central banks still believe that “this time is different” and are actively stepping ahead to support GDP growth, whose forecasts have been revised down massively.

TCB – 1H 2019 Business Performance Update

The rapid capital increase in 2018 has lowered ROAE to less than 20% and pushed CAR to a much higher level than industry norms (13.97%). TCB wants to keep the plan of not paying any cash dividend for five years. Thus, ROAE can hardly return to 20% or more (which was previously communicated as a sustainable level by TCB) in the next one or two years. In addition, because there is no foreign ownership room left, the stock price is unlikely to recover quickly in the short term.

However, we believe that TCB still has advantages in the long term due to its to clear strategic orientation, a strong affluent customer base, advanced human resource management and efficient operations. The bank also successfully strengthened its advantages in terms of funding costs and service income from insurance and bonds services. Currently, asset quality is still well controlled and provision expenses are expected to decrease compared to previous years. Therefore, depending on their respective risk appetite, investors may consider accumulating the stock for the long-term.

PVT - 2Q2019 result update

PVT continued to show its positive performance in the first 6 months with profit growth of 16.5% even though there was no sudden income from selling an asset. With favorable factors such as (1) increasing charter rate (2) stable workload (3) new fleets investment, we keep our BUY recommendation for PVT at VND 21,300 per share, equivalent to a total return of 22%, based on the closing price on August 06, 2019.

KBC - Significant Increase in Rental Price Has Boosted Earning Growth in 1H 2019

We think leasing prospect is promising for KBC. Unfavorable US-China trade reconciliation continues to push FDI enterprises to relocate their factories to Vietnam, especially to the North. Exciting lease activity expects to ease the pressure of cash flow on loan interests and bonds maturing 2019 - 2020. Our current target price is VND 16,200 per share, a slight increase from our previous report, as the rental price has surged. This suggests a forward P/E of 8.5x and a 13% of total return (including cash dividend of VND 1,000 in the next 12 months). We thus recommend an Accumulate for the stock.

Solutions to solve difficulties for Vietnam’s seaborne shipping industry

In September, the Prime Minister will preside over the conference on developing sea shipping and coastal transport. We expect the Government to have clearer guidelines to implement solutions to solve difficulties for this sector. Among solutions, we believe that CIT incentives to 10% over 15 years will directly and quickly impact the profit-making liners. Since then, these businesses can improve retained earnings to reinvest, modernize their fleets and improve competitiveness with foreign shipping lines. In contrast, some players who still have high accumulated losses will not benefit immediately from the CIT incentives. However, the remaining solutions will also create a more favorable long-term business environment for these shippers.

FED lowers benchmark rate by 25 bps to 2.00-2.25%

The take-away from Wednesday’s decision : expected. The FOMC cited « implications of global developments for the economic outlook as well as muted inflation pressures ». The committee called the current state of growth as « moderate » and the labor market « strong ». The FED said it remains open to further rate cuts if conditions necessitate it.

NTL – 1H 2019 Business Results Update

Recently, we met with management representatives of Nam Tu Liem (HSX: NTL). Since the beginning of 2018, the stock price has rocketed thanks to the improvement of business results due to a more aggressive strategy, leading to higher profit recognition and project monetization. In 1H 2019, revenue and NPAT-MI were VND 453 billion (+566% YoY) and VND 120 billion (+566% YoY) respectively, fulfilling 56% of revenue guidance and 51% of NPAT guidance for 2019. The good performance was due to the contribution of two key projects, namely Lideco Ha Long high-rise and North-Route 32 projects.