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.

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.