PHR – 2019 AGM Update

Although natural rubber prices remained at low level during 2018, hitting PHR’s core business, the company still achieved a record high NPAT thanks to large income from rubber tree liquidation. In its 2019 AGM, PHR revealed that there were still ample sources of one-off income to keep its PBT above VND 1,000 billion in 2019 – 2021 period.

SAS –2019 AGM Update

SAS operates in non-aviation services at Tan Son Nhat (SGN) and Cam Ranh (CXR) International Airport. In addition, SAS also operates tourism services and resorts in Phu Quoc.

Will be there a recession?

Financial investors are obsessed with the US inverted yield curve, seen historically as an early indicator of an upcoming recession in next 6-24 months. Since 1960, bond investors have been right about predicting recessions. Currently, 3-month treasury bonds are yielding more than 10-year ones. Last year, there was an inversion between the US 5-year and 2-year treasury bonds, then between the US 10-year and 2-year ones. Besides, the US economy is running at full-capacity as the unemployment rate is well below the threshold of 4%.

Update on money market

• The SBV withdrew more than VND25 Tn from OMO. However, the number of banks participating in the treasury bill bidding and repos has decreased.
• Overnight interest rate rose again after falling in the middle of the week, along with a high average daily trading volume, more than VND53.7 Tn
• This week, State Treasury offerred an amount of 5.5 Tn dong but issued only 200 Bn dong. There were no issuance on the two main tenors, 10 and 15 years. The lowest-bid interest rates was higher than the yield in both tenors. The bid-to-cover ratio has, recently, declined as the yield remains low
• In terms of exchange rates, most indexes fell except for the central exchange rate which still increased by 4 dong from the beginning of the week. The bank exchange rate decreased by 3 dong, while the SBV's buying exchange did not change
• Outlook: We realize that liquidity in the interbank market is no longer abundant while many banks are still in high demand. Banks will borrow mainly on interbank as the interbank interest rate is still in range of 3-4.75%.

HAX – 2019 AGM Update

In 2018, HAX recorded a 16% increase of NPAT, which benefited from the shortage of cars in the auto market. Turning to 2019, we believe that car distribution activity of the company will be more challenging as competition in the market is forecasted to be fiercer.

Demand – supply overview and the oil forecast in 2019

With the narrowing of the supply-demand gap compared to the end of 2018, the oil price is forecasted to continue going well until OPEC + has made any new decision for their cut.

Fed’s movement impacts on other central banks

• The Fed has, recently, announced a pause on interest rate hike and an intention to slow the reduction of its holdings of Treasury securities in May and to end the reduction program in September.
• Other central banks would likely to remain their current monetary policies.
• Fed adjusted US GDP growth rate for 2019 to 2.1% from 2.3% in December meeting.

SVC - Business Performance Was Strong in 2018 But Lower in 2019

SVC finished the 2018 fiscal year with an impressive growth in NPAT-MI. However, turning to 2019, we believe that earnings outlook of the company will be more challenging due to fierce competition among dealerships.

Declining Steel Imports- Local Supply Side’s Efforts

According to the Vietnamese Customs, the import of iron and steel into Vietnam has been decreasing. Vietnam imported 1.1 million tons of iron and steel every month in 2018, 12% lower than 2017 and 27% lower than 2016. This is considered a remarkable achievement for a period as the domestic steel industry has made progress regarding both scale and value chain.

BWE – 2019 AGM Update

BWE finished the 2018 fiscal year with a strong growth in its performance. Turning to 2019, the company targets a 10% YoY increase in its revenue and PBT. In the long term, we believe that the company has ample potentilas to grow.