FSC Certification – Bottleneck Problem for Exporting Rubber Wood Products to Europe

Europe is a very potential market for wooden products. European imports of wooden table- and kitchenware increased from €264 million in 2012 to €398 million in 2016, an average annual growth rate of 11%. A lot of tableware and kitchenware products are made of rubber wood. However, Vietnam only account for a very small portion of European import. The reason is that Europe requires FSC certification. Not many rubber plantation in Vietnam is FSC-certified at the moment.

Metal prices recovery

After a highly volatile year, commodity prices started off 2019 positive, notably in energy and metals. Supply side pressures are the main driver here while demand remains mild. The IMF’s commodity price index rose to 119 up +2.6% YTD. The metal and energy indices, in turn, increased by +9.4% and +2% YTD respectively. The food index advanced slightly +0.6% YTD.

AST –2019 AGM Update

Airport retailing segment:  The company has opened 8 new point-of-sale (POS) in Vietnam, 5 at Cam Ranh, 1 in Van Don and 2 at Noi Bai. Retailing revenue was VND 552 billion (+ 42% yoy), higher than the average air passenger growth thanks to contributions from Da Nang International Airport's stores. Around 15 POSs (22% total number of POS) were opened in Da Nang in mid-2017 and that showed in 2018 results with gross profit reaching VND 355 billion (+ 50% yoy) and gross profit margins of 64.3% (+ 350bps yoy). The company is confident in its ability to extend its current leasing contracts with airport operators without significant increases in rental prices.

FMC – 2019 AGM Update

2018 was the most successful year of FMC when the company recorded an export value of USD 164 mn. Net revenue reached VND 3,807 bn (+8.8% YoY) and PBT was VND 194 bn (+71.3% YoY).

LHG - 2019 AGM Update

We attended LHG’s AGM in April 8. The meeting was well attended with all documents being approved by the shareholders. FY2018 results were reported with net revenue of VND 478 billion (-12% YoY) and NPAT of VND 177 billion (+7% YoY). Leasing activities contributed 67% of gross earnings. During the year, LHG leased 16.5 ha; in which, 10.5 ha were re-leased.

PVD - Cost Saving Policies

When the business faces difficulties, the company must cut cost to survive. And PVD is not the exception as the company has been applying many policies to maintain its business for years. Overall, PVD is currently using two main methods (1) cut the operating cost (2) change the depreciation methodology since 2015.

STK – 2019 AGM Update

In 2019, STK sets a target for net revenue and NPAT growth of 8% and 12%, respectively, at VND 2,603 billion and VND 199.5 billion. The development strategy will still focus on increasing the proportion of recycled yarn on revenue. This year is considered a pivotal year to prepare resources in order to develop further projects.

LTG - A long road ahead

We assess that Loc Troi is a company with strong fundamentals and solid core business activities. The CPC sector has a low growth rate but it has a high gross profit margin and a leading position in the CPC market. The rice segment has improved both its gross profit margin and its revenue contribution to LTG but the efficiency has not been significant. Recently, the company has focused on developing and promoting its rice sector but due to objective reasons from the general market, this sector contribution is still modest. In addition, we believe that LTG's joint venture with Vien Thi Ho Nam in China in the context of its tightening of rice export conditions will bring advantages to the company compared to other traders.

Retail leasing industry updates: The rise of shopping malls

The Savills report has recently updated the overall performance in retail leasing market in both key markets, including Hanoi and Ho Chi Minh cities. From 2014 to 2018, Ho Chi Minh City’s retail leasing stock grew 15% pa on average, while Hanoi was 12%.

African Swine Flu - Every Challenge Provides an Opportunity

We believe that ASF should be considered both a challenge as well as an opportunity for the large-scale livestock enterprises such as Dabaco Group (HNX: DBC), Masan Group (HOSE: MSN),  VISSAN Joint Stock Company (UpCOM: VSN).

VSC –2019 AGM Update

Although the competition situation in the port industry in Hai Phong continued to be stressful, VSC achieved impressive NPAT growth of 27% in 2018. This is thanks to strong growth in container volume from 2 major shipping lines, Maersk and Evergreen, and satellite carriers that have a slot purchase agreement with these two shipping lines. The highlights of business activities in 2018 are as follows: