Real Estate sector: Q1/2017 Business Results Update

In the first four months of 2017, real estate stocks such as SCR, PDR, NLG, DXG, DIG, TDH, NBB and LDG performed strongly. The rally of real estate stocks reflects the positive expectations from investors for these companies this year. Following the soar of consumption patterns after 2015, real estate handovers will begin in late 2016 and peak in 2017-2018. The period of the handover of houses is also the period of recognition of revenue and profit from these projects under Circular 200.

Phu Tai Corp. (HSX-PTB): Latest Highlights on its Investment Plans

We think that PTB’s stock price has witnessed a 12% pullback since the middle of March due to two main reasons: (1) lower than expected earnings growth in the first quarter; (2) 720,000 ESOP shares were traded at the end of April. However, the long-term prospects of this company remain positive. The company’s recent M&A deal could bring two new quarries for PTB, and its other investment plans are going as planned. Currently, we maintain our BUY recommendation for PTB with upside of 22%.

PVT – Stock Price Affected by Negative Sentiment of the Oil and Gas industry

Despite the weak recovery in global oil prices, PetroVietnam Transportation JSC (PVT-HSX) recorded rather impressive Q1 2017 results, with revenue and PAT (after minority) growing 7.8% and 44% YoY, respectively. Its main business pillar, oil & gas shipping (makes up 60-70% GP) saw revenue rise by 16%YoY, while its GPM expended 3 percentage points compared to the corresponding quarter. These results were attributed to PVT’s Dung Quat refinery client increasing its production to make up for a 52 day periodic maintenance scheduled from the 6^th of June. On the other hand, the margin expansion is the result of the company’s recent efforts to keep its operation costs in check and improve its effectiveness. Meanwhile, FSO and O&M services posted quite similar results to the same period last year.

Oil & Gas – No Breakthrough for Oil Price in Q2 2017

After strong surge of oil price to over USD 55/barrel for Brent, sideways movement or downward adjustment have been the usual sights over the last few months for global crude price. Explain this situation, RongViet Research believes that opposite effects on global market created the cautious and negative sentiment, leading to the pressure on oil price. Regarding of future prospects, we project oil price to maintain the current situation until the end of Q2 2017 and hover around USD 52/barrel. For long-term, USD 60/barrel is the expectation for the end of 2017.

A Rewind of Foreign Investors' Trading Activities in April

After the first four months of this year, off-shore investors have accumulated VND5,863 billion, a high level in recent years. This figure can be higher because Pakistan will be reclassified aas an emerging market this May.  The transition of Pakistan will leave a gap in MSCI Frontier Markets. We think the gap will be quickly filled by other frontier markets including Vietnam. There is around USD15 billion AUM (18% of Vietnam market cap) tracking MSCI FM.

DQC – A Tough Year Ahead

DQC’s stock price has plummet 44% from the all-time high VND84,700/share in July of 2016. Based on its 2017 target profit, we estimated the stock’s forward P/E to be 13.6x, much higher than the 9x P/E of its peer RAL. This is probably the explanation for the price movement of these stocks recently.  

MBB – Q1 2017 Business Results Update

Military Bank’s (MBB) stock price has increased for four consecutive days. We think that the increase of its stock price reflects its positive business performance in Q1 2017.

VCB – Q1 2017 Business Results Update

VCB’s customer deposits grew by a mere 3.2% YoY during Q1 2017, while customer loans grew at approximately 8.4% YoY. The company’s loans growth was almost double the average growth rate of the banking industry. As a result, its loan to deposit ratio (LDR) increased slightly to 82%, lower than the SBV’s maximum limit of 90%. Thanks to its strong credit growth, the company’s net interest margin (NIM) slightly increased to 2.8% (2016: 2.7%) and its net interest income grew more than 16% YoY, contributing 72% to the bank's total operation income.

HCM - 2017 AGM Updates

2016 EARNINGS RESULTS

During FY2016, the company recorded total revenue of VND824 billion (+39% YoY), exceeding its FY2016 plan by 12%. Total expenses were VND440 billion, increasing by 38% YoY. The company’s PBT was VND353 billion and witnessed a strong growth of 42% YoY. In addition, its bottom line in FY2016 was VND305 billion, an increase of 43% YoY.

VLC - Q1/2017 Result Update

VLC announced it Q1 2017 earnings results. Investors have been curious about this company after it was acquired by GTN last January. Moreover, the low selling price of pork is also an indicator that investors are tracking the earnings of VLC.

PNJ – 2017 AGM Updates

We estimate that PNJ's FY2017 sales will come in at VND10,222 billion (+ 19.3% YoY) and that its EAT will be VND629.5 billion (+ 39.2% YoY), corresponding to EPS of VND5,932. Therefore, we revise our target price for PNJ to 97,000 VND/share (up 6.7% compared to the recommended price in the 2017 Strategic Report).

BFC – 2017 AGM Update

BFC had impressive performance in 2016, as its PAT increased by 21%, while the majority of fertilizer companies witnessed a slowdown in growth or even negative growth rates.