VNM – SCIC’s Roadshow Update and Quick Assessment of 2016-2017 Outlook

On November 21^st, 2016, a roadshow was held to inform investors of the auctioning of 9% of Vinamilk (VNM – HSX) by SCIC.  Below are some brief updates:

HPG – Business Result Update Release

Hoa Phat Group JSC (HPG-HSX) is the leading firm in the domestic construction steel industry, and has been drawing significant market attention since the price has nearly doubled since the beginning of the year. HPG has illustrated its prevailing efficiency among other industry peers during the first 9 months of this year, and has benefitted from the countervailing measures against imported billets and rebar.  While HPG’s remarkable profit margin might not be maintained in 2017 due to the recent input price increase, its production and sales will still remain the strongest in the steel industry.

ACV – A monopoly player in a strong growth industry

Today, the market saw the long-awaited Airports Corporation of Vietnam stocks (ACV traded for the first time on Upcom. At chartered capital of 21,771 bn VND and first day’s closing price of 35,000VND, ACV certainly joins the list of largest market cap stocks traded on unofficial Upcom trading bourse.

Gravel Stock Prices Decrease - Buy Opportunities?

In contrast to a few months ago, the stock price movement of gravel companies was much more negative and volatile. Yesterday, NNC closed at the floor with the highest volume in one year. Quite similar to NNC, around 60% of C32’s transaction volume was sold at the lowest price in today’s session. 

Real estate sector: The harvest is coming

While supporting sectors such as Construction & Building materials have witnessed miraculous growth in both earnings and stock prices since the beginning of the year, the Real estate sector has remained one of the poorest performers. Though the improvements in earnings of listed real estate companies have been negligible, the property market is more vibrant than ever.

MWG – Optimistic Long-term Prospects

The company’s recent Q3 2016 business results continued to display MWG’s leading position in the retail industry, as well as its unprecedented growth rates. The DienmayXanh store chain (DMX) still makes the largest contribution to MWG’s growth, and BachhoaXanh(BHX) has also been successful in its initial expansion efforts. BHX has received a positive response from the market, and this will be a transformative step for MWG in the future.

PC1: A Well-known and Experienced Name in Power Transmission and Distribution Network Construction

Tomorrow is the first trading day of the Power Construction Jsc. No1’s stock, named PC1, at an initiated price of VND 36,000 per share. In today’s analyst pinboard, we would like to provide some information related to this company’s business to our clients.

How Have Oil Shipping Stocks Performed?

Oil shippers PVT and VTO’s businesses not only shielded the impact of plunging oil prices, but also expanded compared to other struggling upstream oil&gas partners.  9M2016 results of PVT and VTO saw annual growth of 51% and 43%, respectively. In fact, the low oil price environment has driven up industrial and personal consumption, which in the end means more jobs for oil tankers. At the same time, shipping firm’s costs with fuel expenses of 35-40% of its total costs have a chance to be slashed.

HBC: Improved Profitability

While most construction companies recognise the majority of their income in the fourth quarter, HBC’s 9M2016 business results have already recorded remarkable growth year-over-year. The construction business remained the key growth driver for HBC as performances from other segments such as real estates and industrial park were in line with our expectation. Year-to-date, HBC has completed 98% of its revenue target and exceeded the NPAT target by 27%. Gross margin is targeted at under 10%, which is a great improvement compared to 2015’s 5.8%. 9M2016’s gross margin is 10.3%, better than HBC’s expectation which was around 7.5%.

NLG – Hitting the “sweet spot”

Rong Viet Research just had a meeting with the representative of Nam Long Investment Corporation. Although the real estate market has been warned of oversupply, tightened credit, and duty on second homes, NLG remains one of the best sellers in the market who have continuously launched new projects. 

Seaport sector - Hai Phong seaport operators’ 9M2016 performance

As anticipated, Hai Phong seaport operators’ 9M2016 earnings faced difficulty achieving the high growth rate of last year’s same period due to a fall in frozen cargo revenue and rising seaport supply (VipGreen port, expanding Nam Hai and Dinh Vu port). Noticeably, slower than expected growth of cargo has fueled fiercer competition among seaports.

An election of extremes - How macro analyst view the result

From a macro perspective, the possible effects of Trump victory include: (1) Negative impacts on China’s trade and GDP growth; (2) Challenges ahead for free trade deals and globalization; (3) Increased infrastructure investment can poised to the recovery of some basic metal prices; (4) Short-term negative impacts on financial markets; (5) December Fed rate hike is likely delayed.