NKG- Proving its Capability

NKG is holding its AGM on March 31^st to make important decisions regarding 2016 profit distribution, 2017 guidance and other activities. Among NKG’s proposed resolutions, the private placement may draw attention, as the company already concluded two deals during 2016, receiving over VND430 billion to invest in the new plant’s machinery.  

Bangladesh Textile Industry – The Ability to Draw Orders Is Still High

Investors who are interested in textile stocks have typically heard about the risk of orders shifting from Vietnam to Bangladesh. This concern is reasonable given that Bangladesh has obvious advantages of low labor costs and tariff initiatives. In this article, we will compare Bangladesh’s advantages and disadvantages to Vietnam.

Opportunities for Insurance Stocks in 2017

The recent movement of VNIndex is on the back of consumer stocks such as MSN, VNM and banking, real estate and securities stocks. BVH is another large cap that usually supports the VNIndex. However, insurance stock as a whole has not performed well. Evidently, insurance index has lost 3.9% in one month.

On the contrast to this fact, we still believe the insurance sector will have another positive year. Remind that insurers survived through tough times and began to recover from 2012, and followed through with double digit growth in 2014.  Vietnam’s insurance market is undeniably poised for rapid growth thanks to the country’s healthy economic growth, heavy investment in infrastructure and increased consumption of the private sector. Hereunder is 5 reasons to explain this viewpoint:

TCM – Quick Update

While the market witnessed an exciting session, TCM decreased for four consecutive days, following the strong advance it experienced since the end of January. We hold the view that the decline was due to short-term profit taking, because TCM’s operating results have been quite favorable.

HSG – Business Result Update Release

RongViet Research has recently published a Result Update report on Hoa Sen Group JSC (HSG-HSX), in which HSG fair price is determined at VND51,700 per share, 9.7% higher than the closing price on March 22^nd 2017 and recommends NEUTRAL on the stock in the intermediate term.

PVD – Idle in Adversity

Last week, RongViet Research had a meeting with PetroVietnam Drilling & Well Services Corporation (PVD – HSX) to receive updates on the company’s current drilling activities and future prospects.  We hold the view that It is now too early for investors to expect a sudden surge in demand for the oil industry and for PVS specifically.

Quick Glance at International Passenger Traffic in India: A Potential Market for Vietnam Carriers

As mentioned in our previous AP, expanding international routes is a must for Vietnam Carriers to maintain growth. Today’s AP will take a quick look at the international passenger traffic in India, a potential market for Vietnam carriers.

PHR's 2017 AGM: Hope for the Best

Last week, PHR organized its annual shareholder meeting of 2017. Below are some updates from RongViet Research:

FPT – Positive Prospects for 2017

Being the leading company, FPT is taking careful and stable steps to become the “pure” technology-telecom company in Vietnam. 2017 is expected to be the interesting period for investors who are interested in FPT when the divestment and re-investment in FOX could become reality. Furthermore, growth from the improvement telecommunication segment along with the expansion of outsourcing segment will be the stepping stones for FPT in long-term.

FED's Mindgame

One of the most intriguing questions that is posed today is why the FED rate hike led to the depreciation of USD, while commodity and gold prices rose strongly.. This scenario is rather counter-intuitive because whenever a country raises interest rates, there will be capital flow from one country to another to benefit from interest rate differentials. This leads to a higher USD demand, which boosts the currency. A central bank raising interest rates is an indicator of a growing economy that is approaching the inflation target. If the rate hike is gradua; while inflation hasn’t reached the target rat,e economic growth is still possible. As a result, capital will flow from safe assets to riskier assets. The market has seen money flow from safe assets like longer-term maturity bonds and gold to riskier financial assets like stocks and commodities.

VTO – Cheap Valuation and High Dividend Yield

Vitaco JSC (VTO-HSX) achieved encouraging result in 2016 with vessel related revenue and PAT growing by 3.7% and 50%. Given that the fixed costs of depreciation account for the largest proportion of COGS, the firm saw GPM expand by 3 percentage points; this resulted from the average chartered rate increasing by 5% compared to late 2015. In addition, the firm saved nearly VND30 billion in forex loss expenses from the stable USD/VND rate. Had it not been retrospectively requested to pay the accumulated corporate taxes in preceding years, VTO could have recorded a higher profit; State auditors determined that vessel businesses are not under preferential corporate tax regimes.