An Overview of Iron Ore Supply and Demand

Iron ore and Steel scraps are the two main raw materials for the steel industry and the changes in these inputs price would affect significantly the business performance of the steel mills. Driven by the supply and demand forces, understanding the key players in both sides would give the investors a better view in order to forecast the trend of the steel industry. The market share of suppliers and buyers in this industry is highly concentrated when China accounted for two-thirds of the global iron ore import annually and on the opposite, there are only two nations in charge of 70% world ore export (2017), which are Australia (50%) and Brazil (21%). As a consequence, any news affected the steel industry from these countries would impact the global price of iron ore strongly.

PPC – Update on 4Q 2018 Business Performance

Thanks to favorable market conditions and lower major overhaul expenses, PPC had a surprising performance in 4Q 2018: The PBT is estimated to reach VND 363 billion, about 3.6 times as high as that of 4Q 2017. Moreover, the company achieve this result without the one-off income from the reversal of financial expenses from FX differences in 2016.

Update on Industrial Parks

Vietnam is appealing for various reasons including geographical advantages and close proximity to China, enabling road transport. Further, no industrial zones are deep inland and the key ones are tied with seaports, underpinned by increasing investment in infrastructure.

Update on EU-Vietnam Free Trade Agreement (EVFTA)

It is clear that EVFTA plays an important role in Vietnam’s economic prospects for the next decades due to its full-scale impact. Vietnam is facing a “once-in-a-decade” opportunity to integrate itself into the global value chain. Many companies have massive expectations on the benefits from EVFTA, similar to what they had with TPP three years ago. However, the ratification of EVFTA is still in a bit of a gridlock because of issues related to ‘illegal cash fishing and human rights’ in Vietnam. In our opinion, the government should concentrate on pushing the EVFTA ratification in 2019 even though there are tough obstacles related to significant political changes in the EU.

How Yeah1 can grow its digital media business

The digital media division, even though very young (started in 2015), is contributing 55% of revenues and 47% of gross profits for Yeah1 (in 9M 2018) and is targeted to be the main segment of the company in the future. However, the company’s digital ads are displayed mostly on Google’s platforms. Google pays a very low CPM (Cost per 1000 impressions) for views from Vietnam (USD 0.09 per 1,000 views), while that number is much higher for views from developed countries (USD 3.05 for the US and USD 1.85 for Australia). Therefore, if Yeah1 wants to get bigger, it has to grow outside of Vietnam.

Binh Minh Plastic JSC: Managing costs may keep 2018’s targets out of reach

As per the company’s guidance for 2018, Binh Minh Plastic (BMP) aims to reach 100,000 tons in selling volume and about VND 4,620 in revenue. For 2018, BMP may not reach all of its target numbers. The company is unable to control costs and expenses.

Real estate: 2018 review and looking ahead to 2019

In term of stock price’s performance, almost real estate companies have a good return in 2018, of which VIC, DXG, KDH, HDG and KDH are among the best. On the other hand, the worst stocks are VRE, DIG, VHM, TDH, LDG and SJS. Generally, 2018 was considered to be a year for real estate stocks as almost mid-to-large-cap stocks beaten the VN-index.

VPA/FLEGT and the future of Vietnamese timber exports

A Voluntary Partnership Agreement (VPA) is a legally binding trade agreement between the EU and a timber-exporting country outside the EU. VPAs will obviously promote trade in legal timber, and moreover, address the causes of illegality by improving forest governance and law enforcement.

VCB: Business Update

The State Securities Commission of Vietnam (SSC) approved of VCB offering its shares to financial investors. Accordingly, we learned that the bank will issue nearly 108 Mn new shares to GIC and Mizuho, and received USD 270 Mn in return. Hence, the average offered price is around VND 57,000 - 57,500 per share.

Key Logistics Service Providers In Vietnam E-commerce

Owing to the country’s increasing internet penetration and the emerging trend of online shopping, Vietnam is one of the fastest growing E-commerce markets in Southeast Asia. In accordance with Vietnam E-Commerce Whitebook 2018, the market size of B2C E-commerce was USD 6.2 bn in 2017 and is forecasted to continue rising rapidly in upcoming years. In tandem with such booming, the demand for logistics service within the E-commerce ecosystem, E-logistics, is expected to be a very high. Vietnam e-commerce retail logistics market is valued at EUR90 mn in 2018, and is forecasted to experience an average growth of 42% per year till 2022F, according to Ken Research.

Personal Insurance Continues to be The Main Source of Revenue for The Insurance Industry

For the whole year of 2018, total market premium revenue is estimated at VND 133,654 bn (+24% YoY), of which life insurance premiums came at VND 87,960 bn (+33% YoY), non-life insurance premiums reached VND 45,694 bn (+10% YoY). This is the fifth year in a row that the  Vietnam insurance market has achieved a premium growth rate of over 20%. The high growth of the sector is mainly attributed to personal insurance, including life insurance, healthcare insurance and motor vehicle insurance.

Another country is shifting towards the right

In Brazil, on January 1^st, Jair Bolsonaro, was inthronized as the new president of Latin America’s largest economy. Elected in October 2018, his victory represents the rising extreme right: more power to the state, climate skepticism, misogynism, homophobia, fighting corruption using the strength of the military.