ACV – Comments on the audited H1 2017 financial report

ACV has just announced the audited H1 2017 consolidated revenue of VND6918 billion and after tax profit of VND1711 billion. The result saw audited H1 2017 after tax profit decline VND382 billion compared to previously announced figure. We found that the difference was attributed to these factors:

BMP- Trade Discount is not the Most Important Battle in the War

During 2014-2016, the domestic construction demand was a major driver for the growth of construction material demand, of which plastic pipes achieved impressive growth of 15 to18% per annum. In the Vietnamese plastic pipe market, two long-standing producers, including Binh Minh Plastic JSC (HSX: BMP) and Tien Phong Plastic JSC (HNX:NTP), despite having a strong operating capacity did not respond to market expansion, thus creating opportunities for new entries such as Hoa Sen Group JSC (HSX:HSG) and Tan A Dai Thanh.

HDG – Initial coverage report released on 26th September, 2017

HDG – Initial coverage report released on 26^th September, 2017

A Journey to Tien Giang Province

At 6:30am, we headed to Tien Giang Province, which has the largest food and rice wholesale market in the west of Vietnam. As we turned onto Road 865 from National Highway 1A, a series of rice plants appeared.

PPC - Update on Outlook for Business Results in Q3 2017

Recently, RongViet Research had an opportunity to receive an update from the representative of Pha Lai Thermal Power JSC (HSX:PPC) about the company’s business performance, current progress of major repairs work, and plan to repay its JPY denominated debts in H2 2017. Compared to the same period last year, the core business of PPC in Q3 2017 is expected to improve with higher average selling price while the JPY/VND exchange rate is having favorable movements, resulting in positive outlook for the quarter.

Supply and Demand Conditions are Showing Positive Signals

Within a month, the world oil market showed positive signals as WTI rose 8.5% to USD50.6 per barrel while Brent also recorded a significant increase of 11% to USD56.8 per barrel. The main reasons come from the optimistic forecast about world oil demand as well as the better compliance of output cuts from OPEC and non – OPEC to eliminate the oil glut.

PHR – To Allocate Most of Extraordinary Income in Coming Years

Phuoc Hoa Rubber JSC (HSX:PHR) expects to have large amount of extraordinary earnings from different sources including: (1) liquidation of rubber trees, (2) compensation from land transfer to VSIP 3 and Nam Tan Uyen industrial parks (HSX:NTC), (3) divestment from NTC and financial investment in two hydropower plants. Below are some key updates about the income from our recent conversation with the company’s representative.

Mercedes – Benz Vietnam: The Leading Position of “Three – Pointed Star” Brand

We believe Mercedes-Benz's sales will continue growing as a leading brand in the Vietnamese's high-end car market, with annual growth rates estimated at around 20% over the period 2018 - 2020.

MBB – Business Update

Although being a commercial bank, MBB has advantage in mobilizing capital, especially high ratio of liquidity deposit (MBB’s CASA is around 37-38%), which results MBB’s low funding costs compared to that of the other commercial banks. In addition, thanks to its well-controlled loan portfolio, better-than-regulated capital adequacy and liquidity ratios, MBB still has room for pushing credit growth without pressure of raising capital. Therefore, we recommend investors to accumulate MBB at current market price of VND22,900. Using the PBR of 1.7x, we adjust MBB's target price to VND26,800 per share, from our previous target price of VND21,000 per share (in June 2017 strategic report). With a cash dividend of at least VND500 per share, the total expected return on MBB is 19%.

TCM – Investors Too Pessimistic on Fire Incident

On September 16, the fabric storehouse of Thanh Cong Textile Garment Investment Trading JSC (HSX:TCM) caught fire. The storehouse area is 2,167m², containing 700,000m of woven fabric, which is worth about USD1.4M-USD1.5M.

As a result, TCM’s stock price decreased by 5.6% to VND28,600. We believe that the market is putting too much pessimism in considering the impact of the incident.

IMP – Company Update Released on 18th September, 2017

We have decided to change our recommendation from NEUTRAL to BUY for IMP. Considering the growth prospects of IMP, we believe that a valuation of VND80,000/share, equivalent to P/E of 21x is appropriate for 2018. Compared to the closing price of VND63,000/share on September 15, the target price, coupled with a stable dividend of VND1,800/share, yields a total expected return of 30%.

PAC – A Low Downside Risk in The Short Term

After the recent meeting with the company’s representatives, RongViet Research would like to give investors some updates on the business activities of Dry Cell & Storage Battery JSC (HSX:PAC).