PAC – The Decline in Lead Prices Supports Business Outlook

Dry Cell & Storage Battery JSC (PAC – HSX) reissued audited financial reports for 2016 last week. Accordingly, the adjustment of VND44 billion for salary source and VND34 billion for the provision of redundancy payments led to an increase of VND78 billion in pretax profit in 2016. PAT increased from VND121.3 billion from the previous reports to VND187.7 billion. Compared to the same period, PAC’s net profit doubled due to the adjustment in salary expenses, 2016 EPS was 3,721 dong, PE trailing ~11x. In 2017, RongViet Research believes that the recent decline in lead prices has brought many advantages to the company’s business. The relocation of the company’s factories is being carried out on schedule and does not affect the output. However, the feasibility to record the compensation income in the company’s P&L is not as good as expected.

PGS – Business Result Update Release on 22/05/2017

With the orientation to focus more on LPG products to make a firm base of PGS’s business, there will be continuous expansion and improvement in business efficiency for this segment. Its CNG segment will experience the modest performance due to the control of GAS in term of input prices. RongViet Research forecasted revenue and PAT of PGS for 2017 to be VND 6,780 bil (+36.4% YoY) and VND 124 bil, respectively. Fair price for PGS is projected to be VND 21,700/share. Therefore, our recommendation is ACCUMULATE for this stock in INTERMEDIATE.

VIT - Company Report Release on 22/05/2017

As a leading manufacturer of granite tiles, Vigalcera Tien Son Joint Stock Company has significantly benefited from the recovery of real estate market and construction activities. During 2013-2016, its business results improved strongly with the compound growth rate of revenue and NPAT of 20.8% and 70.4%, respectively.

Banking Sector: New Progress in bad debt Resolution Plan Support the Stocks’ Rally

One of the most talked-about topics on the opening day of the 3rd Session of the National Assembly XIV was the draft resolution on the handling of bad debts (5 years term, from July 1^st 2017). At the earlier last week, the Government also issued Decree 61/2017/ND-CP (effective from July 1^st 2017), which details the appraisal of starting price of bad debt and collateral, as well as the regulation to establish Bad Debt Auction Council.

BMI - Q1/2017 Result Updates

In Q1/2017, BMI record a gross premium of VND838 billion, up 13% from VND741 billion of Q1/2016.

IMP – Update on its 4M Business Result

IMP’s target revenue of VND1,260 billion relies heavily on the robust growth of the company's ETC channel. The growth rate is based on the high expectation for three EU-GMP lines in Binh Duong. Thus, the fact that the company has only completed 16% of the ETC target so far may worry many investors. However, we believe IMP’s business will improve significantly during the remainder of 2017 because many large bids of ETC channel take place in the second half of 2017.

SHP – Quick Update on its Business Performance in the First Four Months of 2017

The electricity output of Southern Hydropower JSC (SHP - HSX) in the first four months of 2017 witnessed a strong recovery, with production output reaching 89 million kWh (+89% YoY), corresponding to total revenue of VND103 billion (+87% YoY). Among SHP’s three plants, Da Dang 2 had the highest output growth at 153% YoY while the output of Da Siat and Da M’Bri also grew impressively at 74% YoY and 61% YoY respectively. Such positive results can be attributable to the favorable hydrological conditions with the impact from La Nina, and SHP proactively saving water in the reservoir of Da M'Bri plant in December 2016. Meanwhile, the average selling price in the first four months only fell slightly by 16 dong/kWh to 1,158 dong/kWh.

Oil & Gas – Q1 2017 Business Results of Companies in the Industry (Part 2)

Due to the decline of oil prices this quarter, following the rise of 2016, the future prospects of oil & gas companies have not experienced any clear improvement. Accordingly, the up-stream and construction segments are suffering from the negative impacts of low oil price. In contrast, distribution companies in the down-stream segment have demonstrated strong resilience with stable earnings over the last few quarters.

HSG- Opportunities to Surpass FY2016-2017 Guidance

HSG, a major participant in the domestic steel industry, is displaying its sufficient expansion capability, in terms of production and sales. The company's new plant and multiple new retailers have brought growth in its volume, revenue, and profit during the first two quarters of FY’16-17. Noticeably, HSG and other coated steel producers have been waiting for the determination of the investigation on imported color-coated steel sheets, which is going to be announced in the near future.

Oil & Gas – Q1 2017 Business Results of Companies in the Industry (Part 1)

Due to the decline of oil prices this quarter, following the rise of 2016, the future prospects of oil & gas companies have not experienced any clear improvement. Accordingly, the up-stream and construction segments are suffering from the negative impacts of low oil price. In contrast, distribution companies in the down-stream segment have demonstrated strong resilience with stable earnings over the last few quarters.

PGI - Q1 2017 Results Updates

In Q1 2017, the total gross premium of PGI was VND593 billion, up only 1.89% YoY. Thanks to the decrease in premium reserves, its net inward premium increased 6.69% YoY, equivalent to VND478 billion. Motor vehicle insurance accounted for 44% of this, followed by hull and P&I at 13% while the next two positions were personal health & accident (11%) and the cargo segment (11%).