Oil & Gas – No Breakthrough for Oil Price in Q2 2017

After strong surge of oil price to over USD 55/barrel for Brent, sideways movement or downward adjustment have been the usual sights over the last few months for global crude price. Explain this situation, RongViet Research believes that opposite effects on global market created the cautious and negative sentiment, leading to the pressure on oil price. Regarding of future prospects, we project oil price to maintain the current situation until the end of Q2 2017 and hover around USD 52/barrel. For long-term, USD 60/barrel is the expectation for the end of 2017.

A Rewind of Foreign Investors' Trading Activities in April

After the first four months of this year, off-shore investors have accumulated VND5,863 billion, a high level in recent years. This figure can be higher because Pakistan will be reclassified aas an emerging market this May.  The transition of Pakistan will leave a gap in MSCI Frontier Markets. We think the gap will be quickly filled by other frontier markets including Vietnam. There is around USD15 billion AUM (18% of Vietnam market cap) tracking MSCI FM.

DQC – A Tough Year Ahead

DQC’s stock price has plummet 44% from the all-time high VND84,700/share in July of 2016. Based on its 2017 target profit, we estimated the stock’s forward P/E to be 13.6x, much higher than the 9x P/E of its peer RAL. This is probably the explanation for the price movement of these stocks recently.  

MBB – Q1 2017 Business Results Update

Military Bank’s (MBB) stock price has increased for four consecutive days. We think that the increase of its stock price reflects its positive business performance in Q1 2017.

VCB – Q1 2017 Business Results Update

VCB’s customer deposits grew by a mere 3.2% YoY during Q1 2017, while customer loans grew at approximately 8.4% YoY. The company’s loans growth was almost double the average growth rate of the banking industry. As a result, its loan to deposit ratio (LDR) increased slightly to 82%, lower than the SBV’s maximum limit of 90%. Thanks to its strong credit growth, the company’s net interest margin (NIM) slightly increased to 2.8% (2016: 2.7%) and its net interest income grew more than 16% YoY, contributing 72% to the bank's total operation income.

HCM - 2017 AGM Updates

2016 EARNINGS RESULTS

During FY2016, the company recorded total revenue of VND824 billion (+39% YoY), exceeding its FY2016 plan by 12%. Total expenses were VND440 billion, increasing by 38% YoY. The company’s PBT was VND353 billion and witnessed a strong growth of 42% YoY. In addition, its bottom line in FY2016 was VND305 billion, an increase of 43% YoY.

VLC - Q1/2017 Result Update

VLC announced it Q1 2017 earnings results. Investors have been curious about this company after it was acquired by GTN last January. Moreover, the low selling price of pork is also an indicator that investors are tracking the earnings of VLC.

PNJ – 2017 AGM Updates

We estimate that PNJ's FY2017 sales will come in at VND10,222 billion (+ 19.3% YoY) and that its EAT will be VND629.5 billion (+ 39.2% YoY), corresponding to EPS of VND5,932. Therefore, we revise our target price for PNJ to 97,000 VND/share (up 6.7% compared to the recommended price in the 2017 Strategic Report).

BFC – 2017 AGM Update

BFC had impressive performance in 2016, as its PAT increased by 21%, while the majority of fertilizer companies witnessed a slowdown in growth or even negative growth rates.

DHA - AGM Update

Hoa An Joint Stock Company (HSX - DHA) has more advantageous compared to its peers since it owns 3 quarries that have a long exploitation period (over 10 years) and ample reserves. The quarries of DHA still have strong prospects due to the demand for stone in western provinces, although these quarries are not not in prime locations like Tan Dong Hiep or Nui Nho mines.

PVS – Recommend BUY in LONG-TERM

Evaluate the impacts from the contract termination before term between PTSC AP (own and operate FPSO Lam Son - joint venture between PVS and Yinson) and Lam Son JOC, RongViet Research adjusts the forecasts for revenue and profit after tax of 2017 to be VND 17,995 bil (-3.7% YoY) and VND 772 bil (-24.4% YoY). Even though the results will deviate and fluctuate through years, the issue of FPSO Lam Son will not significantly impact on the core business of PVS. Therefore, RongViet Research maintained the target price for PVS at VND 21,900/share from the report on 03/04/2017. We continue to recommend BUY in LONG-TERM.

PMC - 2017 AGM Update

PMC is considered one of the few pharmaceutical companies who are able to maintain a remarkable profitability but has always been trading at a lower P/E compared to its industry peers such as DHG, IMP and DMC. This could have resulted from the market’s concern about the company’s room for growth as its factory has been running at full capacity. Meanwhile, the new non-betalactam factory of the European PIC/S standard has yet to start construction because the company has to wait until 2018 or 2019 to receive the land in District 9 (HCMC), not mentioning the construction might take 2 years. Until then, PMC still largely depends on the stabilized revenue from its traditional products such as eye-drops (contributes 20% revenue), bactericidal product Povidine (contributes 9-10% revenue) and liver support supplement B.A.R (contributes 9-10% revenue).