PV Power - Catalysts for Short and Intermediate-Term Growth

With 2017 estimated after-tax profit of around VND2,261 billion and IPO bidding price at VND14,400 /share, we expect PV Power’s P/E to be at 17.3x, relatively high compared to Vietnam’s current industry average (about 10x). However, the companies also owns catalysts to ensure CAGR in the next five years of about 17% to justify its high P/E ratio.

Money Policies Of Central Banks And Vietnam Exchange Rate In 2018

In December, FED decided to raise interest rates for the third consecutive times in 2017, thereby bringing FED fund rate to 2% per year from 1.75% per year. This is the fifth consecutive hike over the past three years and we believe the tight monetary policy has started to spread on global scale since 2017

CHP Business Update in Q4 2017

With total electricity output of about 279 million kWh in Q4 2017 (-21.6% YoY), we estimate that NPAT of CHP in the quarter would be around VND149 billion (-36% YoY). However, with recent announcement about production suspension in three months, we believe that the down trend of the performance of CHP would still continue and bottom out in Q1 2018. Given these new movements, we also believe that Q1 2018 would reveals favorable opportunities to accumulate CHP stocks.

Merger of Binh Chanh to Khang Dien

Merger of Binh Chanh to Khang Dien

Recently, KDH submitted the merger plan of BCI for approval at its extraordinary general meeting scheduled in early January. According to this plan, Khang Dien will issue more 51.8 million shares to acquire 42% ownership of BCI, with a swap ratio of 1.4:1. After this merger, KDH will hold 100% ownership of BCI and likely raise its charter capital by VND518 billion.

PAC – Updates on business result

After the meeting with representatives of Dry Cell & Storage Battery JSC (HSX:PAC, we would like to would like to share to investors some updates on this company.

FX reserve: Will the 10-year-ago event recur?

Recently, SBV’s governor, Mr. Le Minh Hung, spoke of a peak of Vietnam’s FX reserve, nearly $48 billion. Therefore, the threshold of $50 billion will be reached in near future. Over 2 years, our FX reserve increased by $20 billion, which remembers all of investors what happened in 10 years ago when a new member of WTO, Vietnam, saw a massive foreign inflow. Such flow steamed from lots of sources, including FDI disbursement (nearly $17 billion in 2017), $1 billion valued FII pouring into bonds and stocks in the context of pushed-up state divestment and attractive-low yields of VGBs. In addition, there is an impressive trade surplus of $3.8 billion, the highest level in recent years.

DRC Result Update – Company Report Release on 26/12/2017

Rong Viet Securities Corporation has just released Result Update report on Da Nang Rubber JSC (HSX:DRC) with the overall opinion as follows:

VNIndex 2018 Forecast

As state divestment activities remains strong in 2018, as well as the abundant of capital in the market, we believe that a P/E contraction is unlikely. Accordingly, we set our base scenario that the index will grow at the same pace with the company's earnings growth in 2018. We estimate earnings growth of top 50 large capitalization stocks on the VNIndex (representing 87% of total market capitalization) to be 17-19%, depending on the dilution plan of banks to prepare for Basel 2. This means that the index is capable to approach, and with a little excitement, to surpass the historical peak of 1,170 points.

FPT: 11M2017 Updates

FPT posted 11-month results with total revenue of VND39.319 trillion and pretax profit of VND2.989 trillion, fulfilling 84% and 88% of the plan respectively. Telecommunication business fulfilled 90% of revenue target and 94% of EBT target for the whole year thanks to the stability of broadband internet revenue and the substantial growth rate of high pay-TV revenue. Trading and retail business continued to lead the growth, especially the EBT of retail sales increased by 41% YoY. More surprisingly, we see that the Education segment's EBT is more than VND220 billion, far surpassing the plan of 98 billion dong set earlier this year. Meanwhile, FPT’s IT segment has just completed 76% of its revenue target and 72% of its EBT target. In general, FPT's 11M2017 results are in line with RongViet Research's forecast, especially in terms of EBT, as all 4 business lines have completed around 80% of our full-year forecasts.

PVD and Oil Price Stories

PVD is a leading player in drilling and exploration sector in Vietnam. Mainly operating in upstream makes PVD sensitive to the oil price.

Comparison of Capacity Structure Between PV Power and Other State-Owned Power Generation Corporations

PV Power is one of the biggest players in Vietnam power market. Compared to other state-owned peers in cluding Generation Corporation No.1, 2, 3 (GENCO 1, 2, 3) and Vinacomin Power (UpCOM:DTK), the company has significant scale in gas-fired power with high plant utilization rate in hydropower and gas-fired power. Meanwhile, its coal-fired power segment with potential improvement in utilization rate would ride the turnaround of the company in the coming years.

Wave of excitement from States' IPO and Divestment to Continue in 2018

We believe the market will keep the excitement at the IPO and divestment deals in 2018 due to the following three reasons.