MWG – Performance decelerated due to end of peak air-conditioning season and high one-off costs

• Q3-2024 business results of core segments in line with our forecast, except for one-off costs from store closures were higher than expected. Net revenue reached VND 34,147 bn (flat QoQ, +12.7% YoY), NPAT-MI reached VND 800 bn (-31.7% QoQ, x20 times YoY).
• In the long term, the trend of trimming the stores system in saturated and highly competitive segments such as TGDD&DMX will continue, while BHX will gradually become a pillar in expanding revenue (~35% supermarket market share), net margin (0.8%).
• As reported in MWG's valuation report on October 21st, 2024, the current stock price relatively reflects long-term growth prospects with a fair value of VND 63,700, equivalent to a projected PE of 20.8x in 2025

IDC – Expanding Land Bank to Sustain Growth

• For 9M2024, IDC reported revenue of VND 6.9 trillion (USD 274 million; +38% YoY), with industrial park (IP) land lease revenue reaching VND 3 trillion (USD 119 million; +52% YoY). During this period, the company recorded lease revenue for 88 ha, of which 46 ha were from MOUs signed in 2023, and 32 ha were from new contracts signed in 2024. 
• For 2024, IDC’s NPAT is projected to reach VND 2.2 trillion (USD 87 million; +57% YoY); EPS for 2024 is estimated at VND 6,600, with a maintained cash dividend of VND 4,000/share. Q4 revenue and NPAT could reach VND 2.3 trillion (USD 91 million) and VND 554 billion (USD 22 million), respectively, comparable to the same period in 2023
• IDC plans to advance operations with IPs that have completed investment policy approvals, increasing the total leaseable land area to 961 ha, including Tan Phuoc 01 IP (Tien Giang, 65% owned by IDC) and My Xuan B1 IP expansion (Vung Tau, 51% owned by IDC).
• Using SOTPs method, we set the IDC’s target price of VND 60,100/share (with a +12% upside from the closing price on November 11, 2024, inclusive of a cash dividend of VND 4,000/share), corresponding to an ACCUMULATE recommendation. 

VPB - Q3-2024 AM Update: Net Interest Income and Bad Debt Recovery Drive Total Operating Income; Asset Quality Begins to Improve

• Consolidated Pre-Tax Profit (PBT) for Q3-2024 reached VND 5.2 trillion (+66% YoY), falling about 7% below expectations. Cumulatively for the first nine months of 2024, consolidated PBT reached VND 13.9 trillion (+67% YoY), achieving 70% of the full-year forecast.
• Key drivers contributing to PBT growth this quarter aligned well with expectations, including: (1) credit growth (8.7% consolidated and 10.4% for the parent bank); (2) a 90 bps YoY expansion in NIM to 5.8% from last year’s low base, along with positive bad debt recovery at both the parent bank (over VND 800 billion, +82% YoY) and FE Credit (VND 750 billion, triple the 2022-2023 average); (3) a 29% reduction in credit risk provisioning compared to the previous quarter, as VAMC bond repurchase pressures eased, resulting in a consolidated credit cost ratio of 1.0%, on par with the same period in 2023.
• Looking ahead to the end of the year, VPB anticipates credit growth of 15-17%, with potential for a slight increase in funding costs (due to accelerated credit growth by year-end), which could put NIM under pressure in Q4. While income from bad debt recovery is expected to remain positive, VPB remains cautious, forecasting a flat NPL ratio compared to Q3.
• Forecasts for 2024F-2025F and target price for VPB are under review and will be updated in the forthcoming report

PNJ – Gold supply shortage remains a major risk

We attended the investor meeting of Phu Nhuan Jewelry JSC (Ticker: PNJ), with the company's management team present. Key points we would like to highlight are as follows:

DGW – Xiaomi's products led growth in Q3-2024

• DGW's Q3-2024 business results are consistent with our previous forecast, with net revenue of VND6,226 bn (24.3% QoQ, +15.0% YoY), and NPAT-MI of VND122 bn (+36.7% QoQ, +18.9% YoY).

IMP – Returning to the growth trajectory

We attended the IMEXPHARM Pharmaceutical JSC investor meeting (Ticker: IMP), with the company's Investor Relations team representing IMP. Here are some key takeaways from the meeting:

REE – Hydropower segment’s results exceed our expectations in Q3 as hydropower cycle returns

• In Q3/2024, REE achieved revenue of VND 2,029bn (USD 80mn; +3% YoY; -7% QoQ) and NPAT-MI of VND 480bn (USD 19mn; -8% YoY; +34% QoQ), mainly driven by the recovery of its core power segment (which accounted for 40% of revenue and 80% of NPAT-MI). Other segments’ results remained flat.
• As the most challenging period for REE has passed, we forecast that the company’s NPAT-MI to continue recovering in Q4 due to (1) higher contributions from the real estate segment and (2) hydropower cycle returnsd, with REE’s peak typically in Q3 and notably Q4. For FY2024, we forecast revenue of VND 7,992bn (USD 317mn; -7% YoY) and NPAT-MI of VND 1,911bn (USD 76mn; -13% YoY). Looking forward to 2025, we expect REE’s growth to resume as (1) hydropower output recovers with the La Niña cycle and (2) the occupancy rate of the Etown 6 building increases.
• Based on the SoTP method, we set a 12-month target share price for REE at VND 71,700, corresponding to a forward P/E of 16.5x and an expected return of 17%, based on the closing price as of November 5, 2024.

The US economy is still expanding because of private consumption

• The US economy is still expanding as a result of private consumption
• An increase in US bond yields affects prospects of a Fed rate drop
• The Fed and other major central banks are cutting interest rates at different rates

International jewelry market update – China and US down, India grew

• We have observed that economic growth (affecting actual spending power and consumer confidence) had a significant impact on retail jewelry sales in major global markets, including China and India.
• In the U.S. market specifically, despite favorable GDP growth, retail jewelry sales have been affected, possibly due to uneven wealth distribution and/or economic growth not being driven by consumer spending.
• Based on the latest financial performance data, the operational efficiency of all companies have been impacted by gold prices (except for Pandora).

GMD – Q3-FY24 Results Update: Sustaining robust growth

• In Q3-FY24, net revenue reached VND 1,234 billion (USD 49 million; +24% YoY). Specifically, the stevedoring segment recorded VND 1,095 billion (USD 43 million; +11% QoQ, +40% YoY), while the logistics segment underperformed with VND 139 billion (USD 6 million; -29% QoQ, -36% YoY).
• Throughput at Nam Dinh Vu Port reached 337,000 TEUs (+10% QoQ, +19% YoY), and Gemalink (GML) handled 475,000 TEUs (+5% QoQ, +87% YoY). The growth momentum was driven by a general recovery in import-export demand and an increase in service routes compared to the SPLY.
• Profits from joint ventures (JVs) maintained a strong growth rate and played a significant role in GMD's net income attributable to NPAT-MI. JVs accounted for 66% of NPAT-MI, contributing VND 222 billion (USD 9 million; +279% YoY).
• For 2024, revenue and NPAT-MI are forecast to reach VND 4,154 billion (USD 165 million; +8% YoY) and VND 1,182 billion (USD 47 million; +55% YoY), respectively, excluding profit from the divestments of Nam Hai and Nam Hai Dinh Vu ports. The current target price for GMD stands at VND 71,000 per share. We will review projections, and valuations, and provide an update to investors in our following reports.

FMC – Q3/2024 revenue hits record high but NPAT-MI is under- expectations

• Q3-2024: Revenue reached VND 2,845 billion (or USD 113 mn; +59% YoY) as a 41% YoY increase in shrimp volume and a 14% YoY estimated rise in shrimp selling prices in VND. Shrimp prices in VND rose 6% QoQ, but the gross margin fell short of our forecast, reaching 10.8% (down from 11.3% in Q2/2024). Selling expenses surged by 150% YoY due to a threefold increase in transportation costs, reducing NPAT-MI to VND 80 billion (or 3,2 mn; -1% YoY).
• For 2024, we have raised our revenue projection to VND 7,279 billion (or USD 291 mn,+43.1% YoY) with a 29% YoY volume increase and a 12% YoY price increase. However, we have revised down our NPAT-MI projection to VND 280 billion (or USD 11.2 mn, +1.3% YoY) from VND 342 billion due to a 37% increase in selling expenses over the previous forecast. Adjusted 2024 EPS after the welfare fund allocation is VND 4,235 (+1.3% YoY).
• We find FMC not particularly attractive in the short term as it is currently trading at an adjusted 2024 forward P/E of 10.9x, which is higher than the 5-year average of 7.5x from 2018-2023. We will update our long-term projections for this stock in an upcoming report.

HAX – Q3-2024 results exceeded our expectations thanks to significant profit margin expansion

• In Q3-2024, according to VAMA, Vietnam's automobile sales recorded 59,743 units, an impressive growth of +29.4% QoQ, +13.4% YoY, contributed by the recovery of purchasing power coupled with support from the policy of cutting registration fee by 50% for domestically assembled vehicles (CKD), effective for 3 months from September 1st, 2024. The market share of CKD vehicles such as Hyundai TC, Toyota, Mitsubishi, Mercedes-Benz (MBZ) accordingly, also recovered well in this quarter.
• HAX recorded an impressive Q3-2024 net sales of VND 1,536 bn (+36.8% QoQ, +37.7% YoY), thanks to the general market factor (as mentioned) and increased market share for distributing MG cars when opening 5 new showrooms during this period.
• HAX's NPAT-MI in this quarter reached VND 62 bn (x7 times QoQ, YoY). The most notable factors are (1) expanding gross margin of MBZ segment, (2) reducing selling exp/net sales for both MBZ and MG, and (3) other abnormal income of VND 21 bn in subsidiaries (mainly MG, x3 times QoQ, x~2 times YoY) which may come from the bonus recognition from MG after 1 year of successful cooperation with SAIC Motor (July-2023).
• For 2024, we forecast HAX's net revenue and NPAT-MI to reach VND 5,373 bn (+34.9% YoY), VND 143 bn (+322% YoY), respectively, corresponding to EPS in 2024 reaching VND 1,328/share.
• We believe that HAX is no longer an attractive investment opportunity in the short term when the 2024 fwd PE at the closing price on October 28th, 2024, reached 12.6x, which is higher than its 2012-23 average (9.2x). We will continue to update the long-term forecast and valuation in the following report.