Oil & Gas – Pessimistic Q12016 business results

In Q12016, average price for Brent and WTI was USD 35.2/barrel and USD 33.6/barrel respectively. This price level was equivalent to -21.2% and -20.4% decline compared with Q42015. However, if we observe market movements, oil price was bias from the bottom of USD 28/barrel in mid-January. At this moment, global crude price has been relatively stable around USD 43 – 46/barrel. We believe that this price level will be maintained until at least OPEC general meeting in June 2016. Despite of recovery, oil price is still hovering around low level. As a result, Vietnam oil & gas companies’ business results are being negatively affected.

HPG to enter the coated steel sector: another reason to have HPG

Hoa Phat Group JSC (HSX-HPG) has just announced its entry to the coated steel sector by a 400,000 tons per year capacity plant, starting operation in 2018. The VND 4,000 bn investment includes a cold-rolling mills, Zn/Al-Zn coating and color coating mills is going to name HPG a big player in the flat steel sector, which means a rival to Hoa Sen Group JSC (HSX-HSG). HPG has already established itself as the largest rebar producer in the domestic market, which would help with the coated steel business, even though it might face obstacles due to the investment timing

Countervailing duty on imported coated steel: Tailwind

MOIT has initiated an Anti-dumping investigation against imported coated steel in early-March 2016. A similar story has occurred to the construction steel sector, in which HPG, VIS, VGS have surged in price after the countervailing duties on billets and rebar products were announced. SMC was one of the benefited company as well, even though it is a steel distributor but not a producer. The situation is likely to happen to coated steel companies including HSG and NKG once the protection is determined.

SHP – Q1 earnings updates

SHP’s first quarter earnings results were less attractive. Their revenue was only VND36 billion (-48% yoy) due to drop in volume generated by three plants (Da Siat, Da Dang 2 and Dambri). In first three months of this year, Southern hydrogen energy power plants, including Dambri had to store water in lakes to release for use in the second quarter, the dry season. Therefore, Dambri saw the worst decrease in output with only 14.3 million KWh, lower 34% than the same period figure. The output of the two remaining plants (Da Siat and Da Dang 2) also decreased 10.8% and 37.8%, respectively since they witnessed unfavorable hydrology conditions and do not have reservoirs for distributing flexible electricity production.

PXS – Stable construction activities maintain positive growth rate

In 2015, PXS maintained the stable construction activities on schedule. This is the notable aspect while comparing with peers under the pressure of global crude oil market. Overall, revenue and profit were closely following the plan, which implied the projects of PXS experienced no difficulties in capital and the progress of construction.

Handshake between the State Bank and Commercial banks

At the meeting “Vietnam’s Enterprises – the Driving Force for the Country’s Economic Development”, SBV has issued an important declaration on interest rate policies. Particularly, commitment to support businesses and the announcements of many commercial banks showed the consistency and enforceability of the orientation.

HSG, NKG update – Impressive growth

HRC price bottoming in late-2015 and recovering in early 2016 brought about short-term benefits to Vietnamese coated steel makers in term of input price. Low inventory prices and increasing sales prices favoured Hoa Sen Group (HSX-HSG) and Nam Kim Group (HSX-NKG)’ performances in the last quarter.

PET – Q1 result updates

Although we have predicted that distribution segment would be facing challenges since 2016, PET’s Q1 business earnings were not so negative. In this quarter, PET’s revenue and PBT were VND2,318 billion (-7% yoy) and VND66.3 billion (+17% yoy).

DGW AGM note - Stop distributing Nokia (Microsoft) products, a big gap is left behind

In 2015, DGW’s sales and PAT dropped significantly due to unexpected change in sales of Nokia (Microsoft) brand. In 2015, DGW recorded sales and PAT at VND4,203 billion (-14% yoy) and 103.5 billion (-19% yoy). This decrease was caused mainly by distribution sales of Nokia (Microsoft) brand. This sales dropped 64% in 2015 since Microsoft changed the business strategy shifting from hardware to software.

PTB - Company report release on April 27th 2016

Phu Tai JSC operates in three main segments including (1) Stone production, (2) Furniture production and (3) Auto trading. Vast reservoir, favorable location for exploited activities, good market orientation, expanding production capacity are factors which would greatly support stone production segment, the main profit driver of PTB. Apart from stone production segment, earnings result is expected to improve thanks to (1) Stable growth rate of auto trading segment and (2) higher margin of furniture segment.

TCM - Company update report release on April 27th 2016

Recently, the price movement of garment and textile companies in general and TCM in particular has been less optimistic compared to the same period last year due to lacking of earnings growth and TPP news support. In more details, difficulties in fiber segment, the instability of Vinh Long operation and negative exchange rate movements are the main reasons that 2015’s earnings result of TCM could not meet expectations. Net revenue rose by 8.6% but NPAT lost 8.7%, achieved only 90.4% of 2015’s guidance. However, prospects for 2016 is relatively more positive when many businesses have found ways to improve operational efficiency.

SKG: A few high growing companies on Vietnam stock market

On April 25th, 2016, Superdong-Kien Giang High speedboat JSC (SKG-HSX) held 2016 Annual general meeting. Below are the summary notes from the meeting: