Q1 Earning Season Recap

We took a quick look at the earnings of 478/765 companies annoucing their results.

Opinion: The Dollar, US Treasuries and ASEAN Currencies

Backtrack about a year ago when the market started speculating that the FED might be a bit ‘behind the curve’ in its handling of monetary policy, the Dollar (as measured by DXY) was at around 99 – see Figure 1). It fell by 10% to a low of 89 by the first quarter of 2018 then rebounded in April.

Vietnam's Retail Trend in 2018

In the context of the slowing down in the mobile phone and electronic markets, big retailers such as MWG, FRT and DGW are seeking for opportunities in another markets. These are the markets that have high growth potential and above all, there are no major competitors in the industry. While MWG is betting on retailing food with Bach Hoa Xanh, DGW and FRT aims to a less risky markets which is pharmaceutical products. This trend also promotes the development of modern retail and Omni-channel in Vietnam.

NKG- Stable Operations Despite Shortcoming Q1 Earnings

Nam Kim Steel JSC (NKG) has released its Q1/2018 financial statements, achieving revenues of VND 3,600 billion, +50% yoy. However, NPAT is only VND 121 billion, down 22% yoy. According to the information disclosed at the AGM, NKG sold over 207,000 tons of steel, equivalent to an increase of 46% over the same period last year thanks to the launch of new GI/GL lines.

FRT – Q1 2018 Result Update

Despite the challenging mobile phone market, FRT still managed to grow well in the 1^st quarter, revenue growth rate was 17% YoY, while NPAT gained a growth rate of 32% thanks to adjustments in product portfolio, focusing more on accessories and services that have high gross margin (29%).

PPC – Update on Q1 2018 Business Results

Despite a 34% growth in the bottom line, from a high base in Q1 2017, it seems that PPC’s earnings report in the first quarter this year still failed to beat market expectations. This might explain why the stock dropped 8% right after the financial report was released. However, with our forecast of a 23% NPAT growth, we still believe that 2018 would be a good year for PPC.

REE - Reseult Update Report Released on 23 April 2018

With strong experience in management in that sector and the company’s constructive attitude toward shareholders, we consider REE as an efficient way to get exposure to the power and water utilities sector. In 2018, the catalyst in this business segment will be the contribution from new associate companies including CHP and VCW, which account for 11% of its earnings. Meanwhile, VIID and SGR with expected earnings growth of 60% and 43%, respectively, would contribute 11% to the total NPAT of VND 1,683 billion, corresponding to EPS of VND 5,374.

KDC – Deep Into the FMCG Sector

After completing an M&A with Tuong and Vocarimex in early 2017, Kido transitioned from a "confectionery" company to an essential goods company.

Airlines’ catering market: Lucrative Prospects with Opportunities

The considerable growth in the number of air passengers in recent years have benefited many aviation-related services businesses including ones involved in catering services. The demand for meals has experienced growth in-line with the raising number of air travelers thanks to (1) new international routes from/to Vietnam, (2) increasing frequency of current domestic routes and (3) the arrival of low-cost carriers.

LHG - Quick Updates on Long Hau 3 Industrial Park

LHG is an industrial park developer who owns huge industrial land bank in Can Giuoc district, Long An province. In particular, LHG has been developing 3 industrial zones; in which 2 of them are almost sold out. The other IP - Long Hau 3, is in its final steps of compensation. According to the company, Long Hau 3 IP is 80% compensated and is expected to welcome tenants at the beginning of 2019. The project has a total area of 123 ha with about 90 ha of  leasable land, including 2 phases: 45 ha for the first phase.

MPC – A Promising Comeback

After two years of voluntary delisting in order to find a strategic investor, MPC is now preparing for a comeback to HOSE in June or July 2018. The experience it has should make it for a bright future.

New Listing: Vietnam Fortress Tools JSC

Vietnam Fortress Tools JSC is going to list its shares on the Hanoi Stock Exchange in 2018. The company is a subsidiary of Formosa Tools, a Taiwanese family-owned business founded in 1974. With a focus on providing quality and low-cost gardening products, Formosa Tools has set up factories in Vietnam to lower its production costs. Fortress Vietnam is currently the manufacturing hub for Formosa Tools, responsible to produce gardening tools.

Starting production in 2007, Vietnam Fortress Tools is currently operating two factories with a total capacity of 60 million gardening tools per year and other products. The company produces a wide range of gardening equipment, in which pruning tools are the main proportion of its sales. Vietnam Fortress Tools' customers are foreign retailers, mainly concentrated in the US and Europe. Ninety-nine percent of its sales come from exports.