Updates on Industrial Properties

The potential for industrial real estate is becoming enormous given the increasing flows of FDI and the expansion of domestic production. However, Vietnamese developers have to face intense competition with other industrial park operators in ASEAN countries, especially Indonesia who has been offering great incentives to industrial investors.

Opinion- NAFTA and the Sierra Club

NAFTA (the North American Free Trade Agreement between Canada, the US and Mexico) has been on the news since before President Trump was elected. The agreement went into effect in early 1994 and was preceded by the Canada-US Free Trade Agreement, signed in 1989. This author worked on the latter as a graduate student. 

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.