MWG – Company Report on 03/02/2017

MWG continues to be the leader in the retail industry for mobile phones and consumer electronics.  However, expansion for Thegioididong could experience a slowdown this year. Consequently, DienmayXanh will be the main growth momentum for MWG for the next 2 years. RongViet Research believes that MWG will face several obstacles to achieve its similar rapid growth of the past, due to the saturation of Vietnam’s market coupled with the emergence of increased competition.

Company report Introduction - Airports Corporation of Vietnam

Airport Corporation of Vietnam (ACV-Upcom) operates 22 commercial airports across Vietnam. The firm’s business growth has been driven by the rise of incomes in Vietnam, increasingly affordable air travel expenses, and Vietnam’s deeper global economic integration. As Vietnam’s economy is still in its emerging state, we expect air traveler volume to continue growing at 15-20% in the coming years. Expansion at major airports (Tan Son Nhat, NoiBai, Da Nang and Phu Quoc) will add 23% passenger capacity between 2016-2018 and relieve the current state of under capacity. Since fixed costs make up the majority of airport operations, ACV’s recent increased service charges proposal would have a positive impact on the firm’s earnings if approved.

Auto Industry: A Look Back at 2016

The volume of automobile sales reached 304,427 units in 2016, increasing by 24% compared to the previous year. Despite its double-digit growth rate, the auto industry witnessed slower growth when compared to 2014 and 2015. Notably, there was a significant slowdown in the last two months of 2016, as automobile sales in 11/2016 and 12/2016 reached 28,431 units (-4% YoY) and 33,295 units (only +13% YoY), respectively. Passenger cars and commercial vehicles sales volume were 182,347 units (+27% YoY) and 106,347 units (+19% YoY), respectively. It should be noted that growth of demand for automobile consumption is currently in a downtrend.

PXS – No Improvements Ahead in 2017

Rong Viet Research had a meeting with the representative of Petroleum Equipment Assembly & Metal Structure JSC (PXS – HSX) this week. During 2016, PXS’s revenue and profit before tax was VND1,550 billion (-11.2% yoy) and VND110 billion (-22.0% yoy) respectively. PXS was only able to achieve ~75% of its plan for the year, and it’s still expected to maintain a 13% cash dividend.

PNJ- Updates On its Business Results

Phu Nhuan Jewelry JSC HSX: PNJ), one of our favorite stocks, has released its preliminary earnings results for FY2016. Its revenue for 2016 was around VND8,720 billion, an increase of 2% over the year before. Retail revenue remained positive, with a growth rate of 29%; same-store sales growth was 8-9% and the contribution of new stores to revenue was ~12%. PNJ’s gross profit margin advanced by 0.63% compared to 2015.  Earnings before tax was around VND608 billion, climbing by 204% YoY. Excluding extraordinary items, PNJ’s EBT was 23% higher over the year 2015.

Vietjet Air - Too Many Planes?

Vietjet Air has delivered remarkable growth since is foundation. Beginning with just a single plane in 2011, the company has now grown to operate 42 aircrafts in 2016, and this number is estimated to reach 78 in 2019. What is more, the airline’s fleet will significantly expand with the arrival of 24 Boeing 737-Max200 planes each year from 2020 to 2023. This raises the question of whether Vietjet can make use of the new aircrafts efficiently.

Stock Market and Banking Liquidity in 2017

Many investors have become concerned with the banking system liquidity this year. The apparent reason is that the domestic monetary flow was on an upward trend during 2016, thanks to the SBV’s strong easing monetary policies; this has resulted in a strong boost for the market.  Will this story repeat in 2017? We will discuss the risk and opportunities from the monetary flow perspective in today’s analyst pinboard.

Updates for Newly Listed Fortex

Investors paid more attention to the textile industry because of the appearance of Vinatex (VGT). The industry is expected to welcome another “big guy”, as Fortex plans to list on HSX on January 18, 2017 with the reference price of 18,000 dong/share. This article is going to provide some useful information regarding to the company’s operation.

Oil & Gas – Exploitation in 2016

Oil prices reached a trough during Q1, dropping to 27 USD/barrel, which was the lowest point in the past 10 years. However, oil prices soon recovered after this and have been stable at slightly over USD55/barrel during the end of this year. For the whole year, brent oil prices averaged at USD45/barrel. Under this circumstance, Vietnam’s oil & gas industry also received significantly negative impacts, especially for leading companies such as PVN.

Commodity Recovery in 2016 and Wildcards During 2017

After experiencing a sharp plunge in 2015, commodities prices in general have experienced a significant recovery in 2016 following a 5-year bear market. Among the gainers, iron ore, zinc and natural gas were the year’s best performers. It is believed that the rally may extend over the next few years supported by supply and demand dynamics as producers across the complex have scaled back supply since most commodities have been trading below their marginal cost of production.  The rally could also occur for an extended period causing world-wide producers to reduce output and cut investments in future projects.

Vietnam’s Airport Sector – Limitations and Opportunities

Airports Corporation of Vietnam (ACV-Upcom) operates 22 commercial airports in Vietnam. The firm recorded nearly 81 million passengers in 2016 making it one of largest Asian airports by annual passenger volume. Vietnam’s aviation and airport industry growth prospect is well supported by (1) the rise of Vietnamese middle class income (believed to make up half the Vietnamese population in 5 years’ time – Nielson), (2) “flying costs” becoming more affordable and (3) time saving.

Significant Changes in Tax Policies for the Fertilizer Industry

The fertilizer industry struggled during 2016 due to unfavourable conditions such as decreasing demand, rising competition and unfavourable tax policies. However, some significant changes in tax policies will result in pros and cons for the fertilizer industry during 2017. Below is a brief assessment of tax policies which will affect the fertilizer industry in 2017.