PC1 – Company Report Release on 30/05/2017

Power Construction JSC No.1 (PC1 – HSX) is the leading domestic player in power construction and steel structure manufacturing. PC1 has also actively expanded its business to hydropower and real estate segments to utilize its resources and  diversify its business, as well as adding more growth drivers in the next few years. In short and medium term, PC1’s growth would be driven by the increasingly large investment capital in power infrastructure and the contribution from new projects in hydropower and real estate.

Q2/2017 ETFs’ Reconstitution Forecast

Db x-trackers FTSE Vietnam ETF and VanEck Market Vectors Vietnam ETF will announce their new components for Q2/2017. Using data as of 26/05/2017, RongViet Research forecast following changes to these ETFs.

NTC – Company Report Release on 29/05/2017

Short-term slowdown in 2017 profit growth would definitely be a good opportunity to invest in the stock with regard to growth catalyst from NTU3 expansion in late 2017. Located side by side with NTU2, NTU3 expects to carry on the fast occupancy rate of NTU2 (5-6 years) since Binh Duong continued to receive massive USD1.5 bn of registered FDI in 5M2017. Cash-rich business model allows NTC to develop new industrial park with little need to access bank loan or raise additional capital. Therefore, shareholder interest is protected and maximizing. By using the Revalued Net Asset Value (RNAV) valuation method, we initiate a “BUY” recommendation on the stock at the “2- year target price” of VND73,8000.

FPT – Company Report Release on 26/05/2017

FPT Corporation JSC (FPT-HSX) has been among RongViet Research’s favorite stock list owing to its fundamental aspects. FPT has the leader position in all markets it operates in, namely telecommunication, IT outsourcing and high-tech device distribution & retailing, which allows it to record sustainable growth. We expect Distribution & Retail to have opposing results regarding growth in 2017 while Telecom (FOX) and software will solidly remain to be the two major contributors to the corporation’s profit. FPT also possesses a solid financial strength including a strong operating cash flow and a decent cash holding, which allow the company to offer a consistent cash dividend policy.

FAQ for Future Contract in the Vietnam Stock Market

Future contract of share indexes (HNX30 and VN30) will be available for trading early this June. This article will address some FAQs regarding the very new financial instrument in the Vietnam stock market.

GMD –Stock Price Gain Supported by Heaps of Short-Term Positive News

Gemadept JSC (GMD-HSX) held the 2017 AGM on 26 May 2017. FY2016 was a challenging year for GMD as revenue saw slight growth but PAT (after minority interest) declined by 3%YoY. Slower than expected port throughput growth lead to fierce competition on Terminal handling charge especially in Hai Phong port cluster (presence of 10 container port operators). Effort to push up handled volume to make up reducing prices limited the firm’s 2016 EBITDA decline to 6.5%YoY. In fact, total throughput via GMD’s port system recorded 7%YoY growth. In particulars, Nam Hai Dinh Vu (NHDV) port saw throughput growth of 15%YoY (exceeding 5% design capacity) and Nam Hai port still ran at 150% design capacity despite location disadvantage. GMD’s general cargo port in central region Dung Quat had volume grow by 15%YoY but would face difficulty to maintaining that pace of growth given the small market in central region and new port supply comes in.

LCG – Quick Update

LICOGI 16 JSC (HSX-LCG) is a civil and public real estate developer, a construction contractor who also has investments in water infrastructure. Q1 2017 Business result demonstrated significant improvement with +33% YoY increase in profit after tax, equivalent to VND 13 bil while revenue experienced the strong growth of 67% YoY.

DHC - Additional Stock Issuance to Finance Giao Long 2 Factory

Upcoming issuance plan

• Issuing for existing shareholder (ratio 5:1) at a price of VND18,000VND/share, and paying a stock dividend of 10% at the same time.
• ESOP: 1.2 million shares (4.7%) at a price of VND18,000/share.

The issuance plan may affect DHC’s stock price in the short term as existing shareholders who are in short of cash may need to sell a portion of their share to prepare the money required for the issuance.

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.