PNJ – Result Update on Phu Nhuan Jewelry JSC

At the current price, PNJ's forward PE of 2018 is about 16x, not too cheap compared to the average P / E of the jewelry industry. However, with a strong leadership position in the industry along with high growth expectation in the coming years from the core business, we believe that PNJ is a worthy investment. Negative news from Dong A Bank , if any, will only have short-term psychological effects and will not affect long-term prospects of PNJ.

Labor Productivity – TFP – ICOR : Key Drivers of FDI to Vietnam

• Vietnam is among countries with high labor productivity growth in Southeast Asia from 2012 to 2017
• Minimum wage grew faster than labor productivity in the region
• High employment in agriculture and an insignificant improvement in manufacturing moderated labor productivity growth
• TFP contributed 15.5 percent to GDP’s growth during 2010 and 2015
• Vietnam had the second ICOR among its peers in the region
• Vietnam has its own strengths to compete for FDIs with other countries in the region

KBC - Strong leases ahead

FY2019 - Expecting the first lease contribution from Nam Son Hap Linh & a notable handover from Phuc Ninh   

Northern leasing activities should remain buoyant in FY2019 as demand stays strong, underpinned by (1) manufacturing shift from China and (2) enhanced production activities in the northern region. Kinh Bac, in particular, has advantages in attracting vendors from its major tenants. LG Display, Foxxcon, Canon and JA Solar are the ones that attract the most customers. The company is under negotiation with several suppliers of JA Solar and Apple in Quang Chau and Que Vo 2. We suppose that Nam Son Hap Linh will contribute 30 ha to a total of 110 ha land leased in FY2019. On the other hand, we assume Phuc Ninh to hand over 2.8 ha of land plots as the ongoing construction is reaching the final stages. Rong Viet projects FY2019 revenue and NPAT-MI to increase 17% and 13% respectively.

MSH – To be listed on HOSE

On November 28^th, 46.7 million shares of Song Hong Garment JSC (HSX: MSH) will be officially traded on HOSE at a reference price of VND 45,000/share. MSH is considered as one of the leading garment company with a stable business result and a stable cash dividend. In this note, we will highlight some information to help investors understand the business activities of this company.

STK – Result Update on Century Synthetic Fiber JSC

The positive impact of FTA free trade agreements such as CPTPP, EVFTA and the increasing of orders shifting from China to Vietnam will be a prerequisite for the increasing demand of raw materials. On the domestic side, STK is aiming to upgrade the quality of its existing products, producing lower spinning with higher fineness to increase its production efficiency. In addition, the increase in the proportion of recycled yarn to revenue can meet the demand for sustainable development from high fashion brand names. In turn this will be a springboard for the company in order to increase its competitiveness and improve its profitability.

PGI – 9M2018 Business Results

Direct written premiums in the first nine months reached VND 2,012 bn, increasing by 11% YoY and fulfilled 74% of the year plan. The company continues to focus on the retail segment.

QNS – Improving itself

QNS is trying to improve its two main segments with different strategies: soymilk (diversification) and sugar (competitiveness). However, it is necessary to develop, change itself to stay in existence and keep growing.

10M 2018 Steel sector’s Overview

In general, the Vietnam steel market in the first ten months of 2018 remained positive with sales growth of 28% YoY. Domestic consumption rose 27% YoY and exports increased 33% YoY.

Is the dollar bull run over?

Probably.

At the end of September we turned bullish on the Euro at around 1.15, which admittedly was a bit premature as EURUSD dropped to 1.12 in mid-November. It is now back above 1.14.

The US: Potential market for Vietnamese wood and wooden products exporters

The US has been one of the biggest trade partner of Vietnam in recent years, and also one of the countries that Vietnam has a trade surplus with. Contributing to the surplus of USD 38 bn in 2017, wood and wooden products exports made up around 10% of the total value, turning into a crucial force driving the surplus in Vietnam –US trade balance

SVC – Business Performance Could Be Strong in 2018 But Lower in 2019

So far in 2018 the business performance is strong due to a dramatic expansion in profit margin of the automobile sector. In the long term, this sector will be very promising. However, we consider SVC’s current market price relatively fair to the short-term outlook of the company.

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.