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
FPT – Financial Performance Update 5M-2024 and Projections Update for 2024F
24-06-2024
: FPT
: Technologies
: Tung Do
Tags:
- 5M-2024 Business update. FPT reported a revenue of VND 23.9 trillion for 5M-2025, marking a 20% YoY increase. Net profit reached VND 3.1 trillion, reflecting a 21% YoY growth. These figures represent 38% and 39% of our full-year 2024 projections of VND 63.1 trillion in revenue (20% growth) and VND 7.8 trillion in net profit (21% growth).
- Forecast adjustments for 2024F. Given the financial results of the first five months, we have revised our assumptions and increased our forecasted net profit for 2024F by 1% to VND 7.9 trillion, a 21.5% YoY growth.
- Valuation and recommendation. Using a sum-of-the-parts valuation method, we estimate FPT's fair value at VND 142,400 per share, implying a total expected return of 9% (including a cash dividend of VND 2,000). We recommend ACCUMULATING FPT. Despite the rapid valuation increase potentially limiting short-term upside, we remain confident in FPT’s robust and stable profit growth prospects, supporting a long-term positive trend for its stock price.
Seafood Industry – The Competitive Situation of the Pangasius and Whiteleg Shrimp Sectors
21-06-2024
: VHC
: Fishery
: Hien Le
Tags:
- According to the June 2024 Food Outlook report by the Food and Agriculture Organization of the United Nations (FAO), farmed seafood is expected to grow strongly due to increasing consumption trends, which will support the aquaculture industry in Vietnam in the long term.
- The pangasius industry has seen year-to-date growth compared to the same period last year, primarily driven by increased production in key markets, while the average selling price remains lower than the previous year. Pangasius products in the U.S. are facing increasing competition in fresh salmon consumption despite high salmon prices. However, we expect pangasius production to gradually improve month by month until August, benefiting from gaining market share over tilapia, which is currently priced lower, thus creating a competitive advantage. Additionally, the gradual increase in tilapia prices also supports the gradual increase in pangasius selling prices
- The shrimp sector experienced growth in the first four months of the year compared to the same period last year, primarily due to increased production, while the average selling price remained lower than the same period. In the whiteleg shrimp segment, selling prices in various markets are still low and have not shown strong recovery trends. However, the Japanese market has maintained competitiveness compared to other countries, while the Chinese and US markets face more difficulties due to Ecuador gradually gaining market share.
PVD – All rigs under firm contract until the end of 2025
20-06-2024
: PVD
: Oil & Gas
: Ngan Le
Tags: PVD 1Q2024
- In 1Q24, PVD recorded revenue of VND 1,756 bn (+43% YoY), driven by the drilling services segment. For 2024, projected revenue is VND 7,305 bn (+26% YoY), with NPAT-MI reaching VND 1,098 bn (+88% YoY). EPS FY2024 is VND 1,974.
- The prolonged high oil prices have boosted exploration and drilling activities in Southeast Asia. Consequently, all of PVD's rigs have fixed contracts until the end of 2025, with rental price reaching USD 105,000/day (+11% YoY). We estimate that PVD's profit in 2025 could increase by 22% YoY to VND 1,343 bn, with EPS and BVPS come at VND 2,389 and VND 30,718, respectively.
- Drilling activities in the domestic market are expected to pick up in 2025-2027 period, driven by key oil and gas projects such as Block B, Su Tu Trang 2B, and Lac Da Vang. However, we believe that the current price already reflects the company's profit growth prospects for the next 12 months, so we maintain our target price at VND 34,000/share, which is 8% higher than the closing price on June 19, 2024, corresponding to a NEUTRAL recommendation for this stock.
According to MSCI's assessment, what are the prospects for market upgrades and how extensive is the path to emerging markets?
19-06-2024
: VDS
: Financial Services
: Hung Le / Thao Phan
Tags:
- Opportunity to elevate the market status to "emerging".
- Vietnam's stock market is progressing along the upgrade path.
- What impedes progress and how can it be addressed? - Enhancing the transparency of foreign ownership and the efficiency of market operations for foreign investors are critical areas for improvement.
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