NT2: 9M2016 business result update

PV Power NT2 (HSX: NT2) announces its 9M2016 business result today. Accordingly, NT2 generated 428.6 mn kWh and produced c. VND581 bn in term of revenue in Sept 2016.

LCG – Good news from Binh Tien Street

According to Decision No. 5346/QĐ-UBND of the People’s Committee of HCMC, Licogi 16 JSC (HSX-LCG) will be one of the investors of the Binh Tien BT project. The two-kilometer Binh Tien street, which connects District 8 (Ta Quang Buu Street) and Binh Chanh District (Nguyen Van Linh Street), will be developed in a period of 24 months by a joint venture between LCG and BCI under the build-transfer (BT) framework.  

HAH – Rising competition dampening terminal handling charges

Hai An Transport & Stevedoring JSC has released its estimated 9M2016 earnings result. For the year ended September, the firm recorded 366 bil VND (-3%yoy) and 96 bil VND in PAT (-15%yoy). Apart from anticipated reduction in refrigerated container (reefer) volume, seaport operators in Hai Phong area faced tough challenges to add growth to earnings this year as increasing competition between ports dampening Terminal handling charges (THC) and hence ports’ performances.

CTD – 9-month earnings estimate remains strong

We expect CTD to recognize VND21,166bn in Revenue (+54.9% yoy) and VND1,351bn in NPAT (+103% yoy). 2016 basic EPS (not adjusted for the stock split and private placement) is estimated at VND25.396bn. At today’s close, CTD’s trading at 9.8 times its forward EPS. With its first BOT project underway, CTD is considering an expansion into the real estate business while seeking integration opportunities with other companies in the supply chain to improve profitability.

Market view: What does market cap-to-GDP tell us?

On October 5th, the market cap of Vietnam stock market, including HSX, HNX and UPCOM, had reached the all-time high of VND1.68 million billion, equivalent to 55% GDP of 9M2016. This brought us to a well-known ratio created by Warren Buffet to measure how “hot" the market is: Market Cap to GDP. Using this ratio, this article will focus on the HSX market capitalization to thereby evaluate whether VN-Index is currently undervalued or overvalued.

Comment on the wave of foreign investments into Vietnam pharmaceutical industry

Vietnam Pharmaceutical industry recent days was on a hype with the acquisition of Glomed Pharmaceutical by Abbott as well as their success in lifting FOL in Domesco (DMC) for the first time in the history of the industry. Previously, the industry was also caught off guard by the purchase of 24.4% shares of Hau Giang Pharmaceutical (DHG) by Taisho. After these deals, the wave of foreign investment into Vietnam's pharmaceutical industry has been the talk of the town for quite a long time. Our analyst pin-board today will comment on a few aspects of this story.

WSB – Struggles to achieve optimistic growth and maintain market share

Saigon Beer Western JSC (WSB - Upcom) which is a subsidiary of Saigon Alcohol Beer and Beverages Corporation (Sabeco), located in Can Tho city. Recently, investors have paid more attentions on the divestment from Sabeco and Habeco (two leading brewery companies in Vietnam). Below is a brief update and some assessments for 2016.

NNC - Company report introduction

Da Nui Nho JSC (HSX: NNC) specializes in mining and processing gravel products in the South. Along with optimistic growth momentum of infrastructure and real estate sectors, the ownership of Nui Nho mine has strongly supported NNC’s earnings. Stone consumption volume increased at CAGR of 18.6%/year during 2012-2015 period and may remain positive in long term.

DHA - Brief update on the first 9 months of 2016

Q3 reporting season has just started and some enterprises have gradually revealed the first 9-month business results, including Hoa An JSC (HSX: DHA). In general, earnings of DHA was somewhat pessimistic compared to the same period last year.

Buy opportunity in trough time

According to Vietnam Maritime Administration (Vinamarine), Vietnam ports handled 38.58 mil tons of cargo in September this year (up 11.1%yoy). Accumulated cargo passing through the system recorded annualized growth of 11% to 314.1 mil tons for the first 9 months of 2016. Containerized goods caught attention with 19% growth in volume reaching 9.97 mil Teus relatively to last year same period. Continued recovering domestic manufacturing and especially higher FDI flow are seen to be the major propeller for trade activities in the country. According to Vietnam Foreign investment Agency (FIA), Vietnam attracted 1,820 new FDI projects (up by 27.1%yoy) for the year ended September with total disbursed fund of 11.02 bil USD (up 12.4% yoy). Logistics services providers (particularly seaports) are earmarked to benefit from this trend.   

Comment on foreign trading activities

The YTD buy/sell of off-shore investors reached a “disappointed” record: minus VND4,675 billion. There were 2 main reasons. First of all, YTD outflows from 2 largest ETFs were estimated around USD87 million, equivalent to VND1,941 billion. Secondly, the bias of VIC due to profit takers at convertible bonds of VIC was around VND4,466 billion. Therefore, if we exclude these technical trading values, it turns out that foreigners net bought VND1,732 billion after 9 months.

What about upcoming October? We are of the opinion that they will turn to net buyer again for 2 following reasons.

REE - Company report introduction

The decline in PPC’s profitability made a dent in REE’s H1 NPAT. The fact that the JPY gained over 15% against the VND and PPC failed to conclude the electricity sales contract (PPA) for Pha Lai 1 (PL1) in the first half was the main reason for its disappointing results in 1H2016.