Cement & Clinker Export 2018

Vietnam is among the top 10 cement-producing countries, with the installed capacity of 148 million tons per year. According to the Vietnam Cement Association (VNCA), the country faced a surplus of 26Mt of cement overall in 2017. Exports are a way to help remove this excess capacity

Changes in Commodity Markets

Currently, commodity prices are directly linked to geopolitical and macroeconomic factors, according to the World Bank Commodity Markets Outlook.

Key drivers include commodity-specific supply disruptions, the FED interest rate hikes, the greenback’s appreciation, growing trade tensions between major economies and huge pressure put on emerging market and developing economies (EMDEs). While the outlook for commodities is fundamentally affected by shifts in demand, the implications from trade tariffs for market prices is also significant.

VPB – Business Results Update

In 9M 2018, VPB’s consolidated PBT reached VND 6.13 Tn, up by 8.7% YoY and fulfilled 57% of the year guidance. Notably, its subsidiary, FE Credit, continued showing a slower growth and lower contribution into VPB’s consolidated earnings.

Pharmaceutical – Steady but Slow Progress

We believe rising healthcare spending and the replacement of foreign drugs with domestic ones in healthcare facilities are a big and inevitable trend. However, poor results of many listed companies in 2018 has proven that the transition will probably take many years. Therefore, we only have a NEUTRAL view on the pharmaceutical industry for 2019 even though the transition progress in hospital channels may somehow speed up. Investor may expect 2019 to be a tough year for equity markets and consider into this defensive sector. However, winner in the sector needs to have proper facilities, a supportive strategic partner, and eventually manage to sell the drugs to end-users.

PGI – Result Update on Petrolimex Insurance Corporation

For 2019, we expect the original cost of sales will increase by 7.8% YoY. The loss ratio forecasted is 53.55%, mainly due to the fact that spare parts prices will continue rising. The expense ratio and combined ratio are estimated at 46.4% and 99.9%, respectively. The investment business is expected to yield 7.7%. EPS arrives at VND 1,966.

Update on LDG

Long Dien Group’s business includes real estate and tourism. Real estate has become its core segment since 2010 with a focus on selling townhouses and land lots in Dong Nai. During recent years, the company has benefited from: 1) the low-cost of land lots purchased in the past and 2) land prices booming in neighbor provinces such as Dong Nai.

TNG – 10M 2018 Business Results

During the first 10 months of this year, TNG’s net revenue was VND 3,040 bn (+46.6% YoY) while its NPAT reached VND 147 bn (+48.5%). Compared to its guidance, TNG exceeded revenue by 10.6% and 15.9% of NPAT. Gross margin slightly improved over the same period, up from 17.2% (10M 2017) to 17.5% (10M 2018).

VSC - Maintaining Impressive Utilization Rate

2019 outlook: Lower growth momentum

We expect that the volume growth will slow down as the VIP Green Port is reaching its maximum capacity, while the Green Port has limited potential growth due to a location that does not provide much advantages. We estimate total container throughput in 2018 and 2019 will be 1,048K TEU (+31%) and 1,056K TEU (+1% YoY).

On the other hand, we expect the new circular that regulates higher range of international container handling tariffs to apply in Hai Phong next year. This will be an upside potential for VSC.

How close is Vietnam to the FTSE’s Secondary Emerging Market status?

In the last FTSE’s annual review published in September 2018, Vietnam was added to the watch list for possible upgrade to Secondary Emerging Market in the future. In general, a country needs to be on the watch list for at least one year before a possible upgrading announcement and then another year before the official reclassification. Therefore, in an ideal scenario, Vietnam reach this status in September 2020.

Kuwait, China A shares and Saudi Arabia were the newest Secondary Emerging markets. Let’s have a look at their journeys below and see how close Vietnam is to the status.

Changes in The Money Market Last Week

The money market always plays a key role in the short-term, highlighting how the State Bank of Vietnam (SBV) responds to changes in the market. Recently, there has been clearly some pressure on interest rates in the interbank market as well as on  G-bond yields in the secondary market. Therefore, it is necessary for SBV to switch from withdrawing to injecting money into the banking system.

DVP - Update 9M2018 Business Result

DVP's 9M2018 earnings remained stable, posted a flat growth as the Dinh Vu Port has reached its capacity. However, in 3Q2018 only, NPAT increased significantly of 21% due to higher volume of reefer container and JV’s gain record.

HAX – Gross Profit Margin of the Automobile Business May Peak in 2018

In 9M 2018, HAX experienced a growth of 9% YoY in NPAT as gross profit margin (GPM) in the automobile business segment which improved significantly. We believe that GPM of this activity will remain good in 4Q 2018, resulting in an expectation of strong performance in the last quarter of this year.