HUT: Transport infrastructure investment: restructuring from BOT to PPP, BT and BOO

Under the current circumstance of a low interest rate level while the government has been encouraging the private sector’s investment into transport infrastructure, such industries including road and bridge development are considered among those who get the most direct benefit. Recently, RongViet Research’s analyst has a meeting with Tasco JSC (HNX-HUT), who is one of the national largest on land transport infrastructure developers in Northern Vietnam and recognized that HUT has remarkably improved its performance. In addition, Hanoi’s real estate market recovery has also been a supporting factor for the projects’ progress under HUT’s management.

CHP - Business result update

Our analyst covering electric sector had a phone talk to Central Hydro Power Jsc (HNX: CHP) about the company’s operation in Q32016. After the conversation, we learn that water level in A Luoi river is still at the expectation during Q3. Therefore, CHP closely follow its generation plan, and sales volume is expected at 124 mn kWh, up by 11% yoy and equal to 90% of total sales volume in the 1H2016.

BCI – Restructuring is to affect earnings outlook

Khang Dien Investment & Trading House Joint-stock Company (HSX – KDH) has just announced a BoD resolution to lend its subsidiary, Binh Chanh Investment Joint-stock Company (HSX – BCI) a maximum amount of VND160 billion. The annualized interest rate is 9.5% and the loan will expire in 3 months after disbursement. Such funding support is no surprise as KDH is now BCI’s controlling shareholder. However, the small size and its short maturity plus slow sales at BCI’s projects imply that the loan will be used for to fund working capital.

HNG - Debt Restructuring - The main driving force for "Turning over a new leaf"

On September 15^th, the first annual general meeting of Hoang Anh Gia Lai Agriculture joint stock company (HNG-HSX) took place. HNG is a subsidiary of Hoang Anh Gia Lai JSC (HAG –HSX), the parent holds 70.45% of its stake (as of 30/06/2016). Although HNG was listed in July last year, the stock has fluctuated recently due to negative earnings results burdened by interest expenses and depreciation as well as bleak outlook of the global agricultural commodity prices. Below is a brief update of the 1H2016 earnings results as well as some assessments for 2016 prospects.

MWG – Maintain impressive growth rates

Last week, Mobile World Investment Corporation (MWG – HSX) announced 8M2016 business results. Significant growth is still the key point in term of both revenue and PAT with +78% yoy and +74% yoy respectively, equivalent to VND 27,028 billion and VND 1,120 billion.

FPT – Without significant improvement

In 8M2016, revenue and PAT for parent shareholders of FPT achieved VND 24,544 billion (-5.5% yoy) and VND 1,119 billion (-1.8% yoy) respectively. RongViet Research maintains BUY recommendation in LONG-TERM for FPT stock with the target price to be VND 58,000/share.

DGC: Growth drivers from new projects

As mentioned in monthly strategy reports, we are positive about the prospect of supporting industry including chemistry. In our two-day business trip to Hanoi, we had a chance to discuss with the representatives of Duc Giang chemicals and detergent powder JSC (HNX: DGC) about their new projects.  

REE – Better chance to penetrate the utilities sector with state’s divestment

On September 14 2016, REE Corp (HSX – REE) announced it would buy 1.2 million shares of Nha Be Water JSC (Upcom – NBW), thereby raising its stakes in NBW from 10% to nearly 22%. This transaction will make NBW an affiliate company of REE in 4Q2016. Previously, between July 22 and August 19, REE acquired a total 3.5 million of Tra Vinh Agricultural Electricity Development JSC (Upcom – DTV) to become the DTV’s largest shareholder and parent company with 66.29% of stakes. In late June 2016, SCIC, DTV’s then-major shareholder, sold its entire stakes or 66% of the company’s share capital. Ever since, DTV’s share prices have been in a rally even though there is almost no liquidity in the stock. Today, the DTV closed at the ceiling price of VND19,700/share, a ten-time increase since the end of June.

What a Failed TPP Would Mean for the Vietnam Economy?

After TPP agreement was signed in 2/2016, the most recent information about this trade agreement is that 12 country members agreed to not re-negotiate. This announcement came out as TPP was asserted to become a failure when US – the leading country in this agreement – is facing several obstacles to pass the deal in short and long-term. The reason is that both of candidates for US President from the Republican and Democratic party criticized the TPP.

BFC – Earning improvement thanks to new factory

Binh Dien Fertilizer JSC (BFC- HOSE), whose well-known brand name "Dau Trau fertilizer" is the leading domestic firm in the business of producing and distributing NPK. In the first 8 months, Vietnam’s imported fertilizers recorded a significant decline, down by 6.5% in volume and 20% in value yoy, in which, the value of imported NPK fertilizers plummeted 30% yoy. Domestic NPK fertilizer production remained weak, decreasing by 7% over the same period. As the same time, BFC has emerged a player in the market.

High infrastructure investment need in Dong Nai province

Dong Nai, the largest province (6,000Km2) in Southeastern Vietnam’s important economic area, sits in the strategic location considered the main gate for this whole area and HoChiMinh City via National Highway 1A. In addition, the province is blessed with a river system which facilitates the cost effective waterways transport mode from center of mainland going downstream towards seaport via Dong Nai port (Dong nai river); GoDau, Phu My, Thi Vai port (Thi Vai river) and Long Tau canal. So, large lank bank for industrial – residential development which is geographically advantaged would serve as Dong Nai’s competitive advantage in attracting FDI.