HDB – Update on 9M2018 Business Performance

HDB’s net interest income in 3Q2018 saw a downturn Y-o-Y due to temporary lending stagnation and squeezing NIM. However, this downturn is partly due to a very high base in 3Q2017, which in turn drags down TOI growth momentum achieved in the first half of the year. Meanwhile, the growth of PBT is more positive than TOI’s due to reduced provision expense. In upcoming periods, we hold the view that HDB will be able to continue its stable growth though at a lower rate than our previous expectation. We expect that NIM will be improved when lending continues to expand. We also expect that the provision expense will be well controlled considering the bank’s positive debt recovery progress as well as the plan to clear all VAMC bonds by June 2019.

We reduce our target price for HDB to VND37,500, equivalent to a P/B forward of 2.3x. The stock is currently trading at VND30,900 (closing price in 19/11), equivalent to a P/B forward of 1.9x. Combined with the expected VND 1,000 cash dividend in the next 12 months, the total expected return is 24.6%. Therefore, we have a Buy recommendation on the stock.

GMD - Update 9M2018 Business Result

The first nine months results of GMD, after excluding extraordinary gains, posted a flat growth. Revenue and EBT fulfilled 83% and 94% of guidance for 2018, respectively.

MWG - Optimizing Bach Hoa Xanh and seeking to compete with low-price electronics products

In 9M 2018, MWG posted a revenue of VND 65,478 bn (+37% yoy) and net profit of VND 2.187 bn (+34% yoy). The company witnessed a slowdown in 3Q 2018 considering its revenue and net profit were only upped by 27% and 15% respectively, compared to 3Q 2017. It was mainly due to the flat growth of the overall electronic market (figure 1). Regarding operations, the company is slowly but steadily optimizing its food stores as well as seeking to compete with low-price electronics products.

LTG - Results Update 3Q2018

In the third quarter of 2018, net revenue reached VND 2,012 bn (+12% YoY) but PAT only came at VND 45 bn (-47% YoY). In the first nine months, net revenue and PAT reached VND 6,423 bn (+9.4% YoY) and VND 236 bn (-15.5% YoY) respectively. Therefore, Loc Troi (UpCOM:LTG) fulfilled 65% of its 2018 guidance in term of net revenue but only accomplished 40% in term of PAT.

MPC – Extraordinary Shareholder Meeting: Getting Ready for a 25% World Market Share

The extraordinary shareholder meeting of MPC on 10 Nov 2018 approved the following statements on the private placement for potential strategic partner(s) and some projects to enhance competency in the context of the US-China trade war.

Update on Novaland

Novaland held its quarterly analyst meeting on November 12th to update its 9M 2018 results. The following points were addressed:

• Revenue recognition: peak season is still the fourth quarter. This year, NVL will only deliver 6,000 units to customers, compared with its plan of 6,700 units. Therefore, the company will only complete 82% of its in revenue guidance but 100% in profit guidance thanks to projects revaluation.
• Project: NVL will only launch one project in late-2018.
• NVL’s strategic plans is to expand its scale in the hospitality segment.
• Debt increased by 25% during the year, of which short-term debt accounts for 44% of total debt.

VGC - A blitz on restructuring amidst rising challenges

FY2019 outlook - Industrial park lease as a key driver, while expecting building materials to improve in view of restructuring

VDSC thinks Viglacera is in a turnaround mode, demanding an effective restructuring against inside-out obstacles from the building materials, the segment representing 64% of profit. Several efforts have been carried out, including the divestment from ineffective businesses, investment in quality improvements and focusing on high-value products. My Xuan sanitary ware and Phu My ultra-white glass factories are expected to bring distinct advantages in the long term. Industrial park lease is expected to make substantial contribution to long term growth as a result of favored FDI and the manufacturing shift from China. Residential projects in Hanoi and social houses encircling industrial zones also will help the company maintain stable income.

Update on the construction and materials industry

Overall, in the first nine months of 2018, total revenue of this sector experienced a slight increase of 6.7% to VND 154,272 bn, while net profit after tax (NPAT) was VND 8,108 bn, a sharp decrease of 24.1% compared to 9M2017

Review on 3Q 2018 Business Results of Listed Banks

Listed banks for which we collected data account for more than 50% of the lending market. Therefore, although there is no official data from the SBV on the entire banking industry’s credit growth in 9M 2018, we think the overall growth was also around 11%. YTD. Thus, we assume there will be around VND391 Tn of credit that could flow into  the economy in the last quarter of 2018. Considering the lending amount in the fourth quarter of previous years, we think that such an amount will be enough to meet the entire demand of the economy in 4Q 2018. Hence, we believe the credit growth for 2018 will be around 16.5 - 17%. However, the growth will vary between banks, depending on their financial health and output for capital flows.

FPT 9M Result Update – Growth on the back of the technology segment

In 9T 2018, FPT posted a revenue of VND 16,261 bn (+21% yoy) and profit before tax of VND 2,738 bn (+33% yoy). In terms of regions, overseas sales grew strongly by 31% and made up for 39% of FPT’s revenues (VND 6,397 bn. The company has fulfilled 74% of revenue and 95% of profit before tax targets for the year.

BFC – Finding the answer for growth

The divestment story from Vinachem will be the rare support for the stock price as the earnings outlook for the next few years is not too bright. We adjust the target price to VND26,800 per share, plus cash dividend of VND2,500, generating a total return of 11%, compared to the closing price on Nov 7^th 2018. So ACCUMULATE.