AGM note – DCL: Ambitious plan amid the increasing competition in pharmaceutical industry

Pharmaceutical industry is getting the attention of investors due to a breakthrough in their price level in the first two months of this year. Cuu Long Pharmaceutical (DCL - HSX), which is a medium size pharmaceutical company, held an AGM last week. Based on its 2015 earnings result and 2016 plan, RongViet Research had some brief updates on DCL prospect.

The surprised auction result of Vissan

The bid winning price was out of our forecast when reached level of VND 80,000/share. With this price, P/E forward is estimated at 58x. In the 3 following years, there is not any significant cash flow from major projects. Thus, normal investors as well as financial institutions are difficult to accept the price

Financial data from listed companies raise a question of whether or not the economy is ready for an upcoming rate hike

Business scale of listed companies have recovered. After a significant slowdown in 2011 and 2012, the operating scale of listed companies has slightly accelerated since 2013. In 2015, due to external difficulties, the sales growth is a mere 6%, slower than the growth of 15% in 2014. Meanwhile, equity growth (2015: 25%) has helped total assets grew faster (2015: 17%).

TDH - A breakthough is needed

Our real estate analyst just had a meeting with Thu Duc Housing Development JSC (HSX-TDH). As a renowned developer of affordable condominiums and residential land, TDH should be little affected by the curb of real estate lending the Draft Amendment of Circular 36/2014/TT-NHNN is enforced.

1Q2016 ETFs’ reconstitution

The new component lists of FTSE ETF and VNM ETF will be announced on 05/03/2016 and 12/03/2016 with the expected results:

HPG: Prominent profitability despite failing to meet expectations

Hoa Phat Group JSC (HPG-HSX) has just announced Q4/2015 performance, which records revenue and NPAT of VND 7,122 billion and 565.9 billion, growing by 8.2% and 14.2% y.o.y, respectively. The annual figures for revenue and NPAT are VND 27,452.7 billion and 3,485.4 billion respectively. RongViet Research’s previous forecast was adequate in term of revenue, whereas the actual NPAT falls 10.4% below our expectation. Noticeably, the 4^th quarter contributed over one fourth of the annual revenue but that of NPAT was only 16.4%. In addition, Q4/2015 gross margin was 18.3%, lower than the annual figure of 20.3% and Q4’s Trade discount went up by 25% y.o.y infer that Hoa Phat in fact, has had to incur more expenses to stabilise its billion-dollar revenue.

HPG’s income statement also display a considerable increase in many expenses. Interest expense for Q4/2015 went up by 11.6% y.o.y but administrative cost was more than double y.o.y. Eventhough the administrative expense often inclines in the fourth quarters, the VND 420 billion amount in the last quarter has taken us by surprise. On the other hand, the stabilised input and product prices has helped HPG to cut VND 156 billion in provision for inventory value loss in Q4/2015 y.o.y.

Macroeconomic in the first 2 months of 2016

Industrial Index Production (IIP) plummeted 22.3% in 2/2016 compared to the previous month due to the impact of seasonal factors, Lunar New Year holiday while the Consumer Price Index (CPI) rose 0.42% m.o.m. That is the highest monthly inflation increase in the last 2 years However, RongViet macro analyst do not believe that it was the early signal of high inflation progress but it was a positive sign when the market has shown a match between consumer confidence and the level of consumption (according to ANZ, consumer confidence had increased steadily since 8/2015 and reached 144.8 points in 12/2015, the highest level since early 2014). IIP were still up 7.9% compared to the same period of last year. Although the Purchase Managers’ Index (PMI) went down to 50.3 points from 51.5 points of the previous month, the PMI is still in the level of improvement. Based on the above analysis, RongViet macro analyst believe the economy is stable in the first months of the year.

MWG – 2016’s growth would depend on new stores’ sales

Rocket growth was maintained thanks to new stores’ sales
In 2015, MWG’s revenue increased 60%, with thegioididong.com sales growth at 54% and dienmayXanh sales growth at 98%. In which, same store growth of thegioididong.com and dienmayXanh.com was 5% and 10%, respectively. According to our estimation, new stores (opened in 2014 and 2015) accounted for 57% total revenue of MWG. Those showed that rapid growth of MWG was mainly thanks to a contribution of new stores, with over 126 stores opened in 2014 and 269 stores opened in 2015. If excluding stores in HCM and HN, the average of thegioididong.com store per province was 7 stores. Currently, dienmayXanh has operated in 51/63 provinces of Vietnam and planned to spread out all Vietnam’s provinces in this year.

Positive 2016’s prospects for Building and Construction plastic

During the recent decrease in oil prices, the price of petroleum products generally continued downward trend. Specifically, the price of PVC powder in Asian Pacific market, accounted for 60-70% of plastic pipe’s COGS, dropped 11.3%; HDPE powder prices also lost 10.3% compared to the average of 2015. Low raw materials price is one of the main factors supporting the performance of Building and Construction plastic companies and price movements of those shares as well.

Vissan IPO - Expect on closed-end production line

Tomorrow, the deposit deadline for Vissan auction is upcoming. In today’s analyst pin-board, we would like to deeply analyze its business performance and prospects.

High possibility of growth and divergence in 2016 for listed ports firm

Put in the current context that many industries have to deal with various factors from oil prices, FX, interest rate to increasing foreign competition, logistics sector or port services in particular is rated to benefit from Vietnam’s expected fast increasing trade activities in the coming years from the conclusion of free trade agreements (FTAs).

MWG: January business result updates

The January result was very attractive. In January, MWG’s revenue was VND3,527 billion (+99% yoy), inculuding VND2,519 billion from thegioididong.com (+73%) and VND1,008 billion from dienmayXanh.com (+218%). So, the bottom line was VND153 billion (+118% yoy) and accounted for 11% out of total year guidance. This attractive growth was thanks to new stores, with number of stores nearly double compared to the same period. Therefore, with about 270 stores opened in 2015 and another 150 planned to open in 2016, MWG would probably reach their target for this year as PAT of VND1,388 billion, a 29% higher than the bottom line of 2015.