Electricity sector – Brighter outlook for hydropower plants in 2025
10-07-2024
: POW
: Utilities
: Thang Hoang
Tags:
- Total electricity consumption volume to increase in 2024-2025 due to the increase in manufacturing activities and the residential power demand. However, we are yet to be optimistic on business performance of hydropower plants in 2024.
- 2025F outlook for hydropower generation companies to be brighter due to (1) strong volume growth due to a La Nina phase returning in H2 2024, (2) the average electricity selling price for hydropower plants would hardly decline, while that could increase once EVN improve its financial performance.
Vietnamese truck, bus tire producers – Export market is the new pedal in the context of being narrowed its positioning in domestic
09-07-2024
: DRC
: Automobiles
: Hung Nguyen
Tags:
- The influx of Chinese imports of truck, bus replacement (TBR) tires at competitive prices since 2019 poses a threat to the potential expansion of sales volumes in Vietnam for domestic TBR tire producers such as DRC, CSM.
- Hence, these companies switched their care to export market (which is imposing the anti-dumping tax for Chinese products like US or is not noticed by China due to a small market size such as Brazil, Egypt in recent years). We view that Vietnam TBR tire producers will improve its export sales volume in short-term but may encounter limited sales growth in the long run once they reach their peak production capacity
TCB – Outstanding Credit Growth to Drive Q2/24 Profit Growth
08-07-2024
: TCB
: Banking
: Tung Do
Tags:
- For Q2/24, we estimate TCB's consolidated PBT to rise by 24% YoY to VND 7.0 trillion, mainly driven by net interest income with an expected growth of 40% YoY.
- The drivers of TCB’s net interest income growth in Q2/24 include an above-industry-average credit growth (expected at 12.3%) and a significant YoY expansion in NIM (+40 bps YoY) as the "flexible pricing" policy has notably impacted TCB’s interest income in the same period last year.
- We maintain our 2024F PBT projection for TCB at VND 28.0 trillion (+23% YoY), with the growth in Net interest income/net fee income/Total operating income projected at 24%/19%/20%.
- We maintain our BUY recommendation for TCB with a target price of VND 28,000 per share, implying a total expected return of 19%.
DPR – Compensation from Tien Hung 2 drives strong Q2 profit growth
05-07-2024
: DPR
: Industrial Land RE
: Hung Le
Tags:
- According to estimates, the average selling price (ASP) reached VND 43 million per ton (+26% YoY) with a sales volume of approximately 2,800 tons (+4% YoY) in Q2. Combined with compensation from the Tien Hung 2 project, DPR's consolidated revenue is estimated at VND 191 billion (USD 8mn; +31% YoY) and net profit at VND 90 billion (USD 4mn; +212% YoY) in Q2 2024. For the full year 2024, DPR's consolidated revenue is expected to reach VND 1,117 billion (USD 44mn; +7% YoY) and net profit at VND 257 billion (USD 10mn; +24% YoY). Corresponding EPS is VND 2,962.
- After Decision 227/QĐ-TTg, several new details have emerged regarding the conversion of rubber land related to DPR’s area in Binh Phuoc province, including: (1) Although the land allocation target for industrial parks by 2025 for the Bac Dong Phu Ext. and Nam Dong Phu Ext is smaller than the planned area of these two projects, the area acquired and corresponding compensation will still be 100% of the planned area, immediately after the project receives investment policy approval; (2) the compensation price is being negotiated for an increase (potentially up to VND 1.3 billion per hectare); (3) the Suoi Giai Lake Tourism Urban Area and Tay Ho Ba Mu projects are feasible for DPR to receive compensation, in addition to the new urban area in Dong Xoai City.
- Based on the Sum-of-the-Parts (SOTP) method, the target price has been adjusted up to VND 53,300 per share, as we: 1) Adjust the progress of compensation receipt for the two new industrial park projects to an earlier schedule instead of in two phases (50% in the first year and the remaining 50% after 2025 when additional allocation targets are granted); 2) The maintenance cost of the rubber segment is lower than expected. Combined with a 12-month forward cash dividend of VND 1,500 per share, the total expected return is 26.1% based on the closing price on July 5, 2024.
Fertilizer industry – Big players looking to expand NPK share as Urea market saturates
04-07-2024
: DPM, DCM, BFC
: Fertilizer
: Ngan Le
Tags:
- Overall, the domestic fertilizer industry has entered a saturation phase as the cultivated land area continues to shrink and production capacity remains overcapacity. 2024 is forecast to be a stable year for the fertilizer industry as there is little room for growth in sales prices and consumption volume.
- The Draft Amendment to the VAT Law is a highlight and is expected to help domestic fertilizer manufacturers compete better with imported fertilizers due to reduced costs.
GMD – The rapidly increasing demand for ex-im will lead to a promising performance in 2H2024
03-07-2024
: GMD
: Seaports
: Quan Cao
Tags: GMD Seaport
- In 6M2024, container throughput at NDV and GML ports was 582 thousand TEU (+12% YoY) and 804 thousand TEU (+97% YoY) respectively, achieving 48% and 56% of our projections. According to the management, PBT from core business is estimated to achieve 53% of the 2024 plan, reaching VND 716 billion (+10% YoY), corresponding to 42% of our forecast.
- GMD announced its revenue and PBT targets at VND 4,000 billion (+4% YoY) and VND 1,686 billion (-33% YoY) respectively, with core business activities expected to reach VND 1,350 billion (+4% YoY).
- Maintaining projections for 2024, container throughput at NDV and GML ports is forecasted to be 1,203 thousand TEU (+9% YoY) and 1,440 thousand TEU (+41% YoY) respectively. Revenue and NPATMI (excluding abnormal profit) are projected to be VND 4,154 billion (+8% YoY) and VND 1,200 billion (+58% YoY) respectively. We maintain an ACCUMULATE with a target price of VND 91,300 per share.
BMP – Maintaining high dividend yield
02-07-2024
: BMP
: Materials
: Thach Lam Do, CFA
Tags: BMP
- In 2023, BMP recorded revenue of VND 5.2tn (USD 211mn, -11%YoY). Gross profit margin (GPM) increased by 13% (to 41% in 2023), thanks to: 1/ Stable selling prices, thanks to its leading market share in the Southern market, and less competitive pressure from imported products; 2/ Input raw material prices (mainly in terms of PVC resins) dropped sharply to USD 835/ton (-25%YoY). As the result, net profit after tax still recorded growth by 50% YoY and reached VND 1,041bn (USD 42mn).
- For 2024, we expect the sales volume to slighly recover, with residential real estate projects to accelerate sales in 2024, along with the construction phase and increased demand for raw materials (including BMP’s products). Thereby, sales output and revenue could reac 90 thousand tons (up 3.4%YoY) and VND 5,335bn VND (+3.4%YoY), respectively.
- With the scenario of PVC resin price traded at USD850/ton (+2%YoY), GPM will decrease slightly to 39.2% and gross profit will reach VND 2,089 bn (USD 85mn, -1.3%YoY). 2024 net profit can reach VND 949 bn (USD 38.4mn, -9%YoY, completing 92% of the business plan). 2024 EPS to be VND 10,549, and we expect the 2024 cash dividend to be VND10,000/share
- We use FCFE, DDM and PE methods to value stocks. Accordingly, the fair value is determined at VND104,000/share, corresponding to a total expected 12-month return of +16% based on the closing price on July 2, 2024 (Including cash dividend of 10,000 VND/share, corresponding to a dividend yield of 10%). We think that BMP is suitable for investors who prefer stable income, as the dividend yield is relatively attractive compared to other listed companies.
ANV - Bright Future Expected in the Second Half of 2024
01-07-2024
: ANV
: Fishery
: Hien Le
Tags:
- According to VASEP data, pangasius exports in the first six months of the year reached USD 922 mn (+6% YoY), with June alone reaching USD 174 mn (+22.1%, according to Argomonitor, it is 20%). However, ANV's total pangasius export revenue for the first five months of the year was 40 million USD (equivalent to VND 1,000 billion at an exchange rate of USD/VND 25,000), down 17% YoY due to a 14% YoY decrease in selling price in USD and a 4% YoY decrease in volume.
- For 2024, we forecast revenue to reach VND 4,580 billion (+3% YoY) with exported pangasius volume reaching 62 thousand tons (+12% YoY) and the average selling price decreasing by 8% YoY. Gross margin is expected to improve from 10.2% to 14% due to lower farming costs driven by reduced soybean prices. This supports net profit after tax and minority interests (NPATMI) reaching VND 200 billion (+376% YoY). EPS for 2024 is estimated at 1,502 VND (+374% YoY).
- We are reviewing the valuation basis for ANV due to the need to further observe factors affecting the industry and company outlook. With the estimated 2024 EPS of approximately 1,502 VND/share, the forward P/E for 2024 is 21.8x based on the market price as of July 1, 2024, which is higher than the five-year average (before the negative P/E period as of March 31, 2024) of the company at 17.x.
Recent US economic data favorably positioning Fed to initiate interest rate cuts
28-06-2024
: VDS
: Macroeconomics
: Luan Pham
Tags:
- US inflation surprisingly eased in May.
- Disinflation remains on track.
- Weakening data in coming months.
- Two rate cuts this year is ‘base case’.
Vietnam grocery retailers – Gradually finding the key to tapping into the industry's vast potential
27-06-2024
: MWG, MSN
: Retailing
: Hung Nguyen
Tags:
- The fast transformation in consumer habits to modern channel instead of wet market/small local grocers, implies that Vietnam grocery retailing market is the fertile land for modern players.
- Due to their prominent market position and extensive store network, coupled with substantial potential for ongoing cost improvements compared to their Asian peers, these chains are poised to play pivotal roles in shaping the long-term prospects of MSN and MWG
PC1 – Stellar growth due to recovered demand for power construction and contribution of nickle mining
26-06-2024
: PC1
: Power
: Thang Hoang
Tags:
- PC1 reported stellar results in Q1 2024 with revenue of VND 2,165 bn (+44% YoY) and NPAT-MI of VND 81bn (+449% YoY), which are driven by contribution of nickel mining segnebt
- We forecast 2024F revenue of VND 10,245bn (+31% YoY) and NPAT-MI of VND 426bn (+212% YoY), which is driven by (1) strong recovery of both power construction and steel pole production segments and (2) full year contribution of nickel mining segment
- We estimate PC1’s target price of VND 29,500/share using Sum of the part (SoTP) valuation method, of which forward P/E is 20x and the corresponding expected return is 4% based on closing price as at June 25,2024. We think current market price has fairly priced in 2024F growth prospect
Update on monetary market in Jun 2024
25-06-2024
: VDS
: Macroeconomics
: Ha My
Tags: Monetary market
- The SBV net withdrew for the second consecutive month.
- Concerns about the upward trend of DXY in the second half of 2024
10-07-2024
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