October macro data review: Steady growth, higher inflation and slowly currency depreciation

Growth steady with supportive policy:  Industrial production growth was stable at 7% yoy in October. The most notable thing is that manufacturing growth, the best monthly proxy for GDP growth, stayed high at 11.9% yoy. Recall of flawed Galaxy Note 7 phones forecast to have small impact on exports, this problem might reduce Vietnam’s 2016 exports by 0.3%, according to GSO. In addition, computer, electronic and optical products’ production index show that growth momentum remained steady. As a result, we expect Vietnam to grow around 7% yoy in the final quarter of 2016. Policy stance is moving toward expansionary to achieve new GDP growth target (6.3-6.5% in 2016).

Real estate Q3 earnings at a glance

Several real estate companies announced Q3 and nine-month earnings last week. While some posted upbeat revenue and earnings growth, others reported a sharp decline in sales and profitability.

HABECO and SABECO: Potential for improvement in business performance

Today is the first trading day of Habeco (BHN - Upcom), which is one of the two largest domestic brewing companies (18% market share). Similar to Sabeco, the BHN’s process of listing as well as state divestment draw the attention of many investors.

Using ROE is considered as the simplest and easiest way to measure company performance. We use DuPont Analysis (5 steps) to break apart ROE in order to take a deeper look into HABECO, SABECO and three other Asian brewers’ business performance. 

CTD- Change to achieve long-term growth

CTD has concluded a stable Q3/2016 compared to the previous quarter, recording revenue and NPAT of over VND 5.300bn and VND 366bn respectively, +39% and 74% yoy. Year to date, CTD delivered revenue and NPAT growth rates of 64% and 114%, remarkably higher than those of 2015.

SVI - Remains solid in competitive environment

RongViet Research has just discussed with the representative of Bien Hoa Packaging company (SVI – HSX), one of the biggest packaging manufacturer in Southest Vietnam, with main competitors being Box-Pak (Malaysia) and Vinh Hung. Most of its customers is in the consumer goods industry, including Unilever (16% of revenue), Sabeco (new customer this year, 5-6% revenue), Pepsi, Cocacola (2-3% each).

BFC - Company report release

Binh Dien Fertilizer, owning the well-known brand “Dau Trau”, is the leading domestic firm in producing and distributing NPK products. With well-established history, the company has built a strong and efficient distribution network nationwide and regionwide.

PPC: 3Q2016 business result update

PPC has been facing an uneasy FY2016 due to (1) prolonged PPA negotiation for plant PL1, (2) major maintenance of 2 units and (3) declining selling prices in CGM. However, with new contract, we expect PL1 could operate at capacity of 82% - 85% in FY2017 compared to 63% in FY2016 thanks to a surge in contracted revenue. In conclusion, we think PPC has survived its toughest time and will recover in FY2017. At today close price VND14,900/share, PPC is traded 24% discount from our target price.

FPT – Telecom segment demonstrated strong internal growth

FPT Corporation (FPT - HSX) recently announced its 9M2016 earnings. Revenue continued to grow negatively with -2.7% yoy while the PAT to parent company’s shareholders slightly improved by +4.7% yoy growth. Total revenue and profit reached VND 28,468 billion and VND 1,330 billion respectively. Accordingly, the PAT has achieved positive growth rate after declining trend last few months compared with the same period. RongViet Research maintains the recommendation to BUY in LONG TERM for FPT with a target price of VND 58,000 per share.

NCT – Strong price discount creates opportunity

NoiBai Cargo (NCT-HSX) reported 9M2016 revenue of 512 bil VND (down 14.6%yoy) and 19.4%yoy fall in PAT to 205 bil VND. This result is largely anticipated in 2016 as new industry entrant ALS put in use full capacity this year. Moreover, sharing of international air freight clients to ALS started to make a toll in NCT’s operating margin which has gone down 3.6 percentage points in 9M2016 compared to last year ‘s similar period.

HT1 – Good business results

According to a recent report of Vietnam National Cement Association (VNCA), the total consumption of cement and clinker was 55.55 million tons, up 7% over the year. In particular, domestic sales made of for the largest proportion (78.7%) and had a positive growth of about 10%. Due to fierce competition with China, exports have been slowing down and had a slightly negative growth at 2%. Despite oversupply remains but many large enterprises such as Ha Tien 1 Vicem Cement JSC (HSX: HT1) still maintained its good business trend.

IMP - Strong growth in Q3

IMP has announced Q3 earning result, in which net revenue and NPAT was VND 215bn (+17%) and VND 23bn (+31%), respectively. Summing up 3 quarters, the company just completed 59% of total revenue plan and 62% of PBT 2016 plan.  

The urge of flood insurance to narrow the insurance protection gap in Vietnam

Flood catastrophe has appeared very often on media. However, none of non-life insurance company introduces any products relating to flood protection.