PHR – The Land Conversion Story Becomes Increasingly Clear

: Industrial Land RE
: Hung Le

  • The proposed  master plan for Binh Duong province reveals a clearer path for land conversion, opening up numerous opportunities to realize the value of PHR's rubber land for future socio-economic development projects. According to estimates, the total area of land PHR can convert by 2030 is up to 3,972 ha.
  • In our baseline scenario, we project that PHR's revenue and net income for the year 2024 will reach VND 1,623 billion (USD 66 million) and VND 694 billion (USD 28 million) respectively, marking increases of 20.1% and 11.5% year-over-year. This forecast is based on the scenarios where 1) the revenue from the VSIP 3 project continues, and the NTU3 project begins deliveries this year, and 2) the average selling price of rubber for the year is VND 41 million per ton. The corresponding EPS for 2024 is anticipated to be VND 5,042.
  • Based on the Sum of The Parts (SOTP) method, the target price has been adjusted to VND 68,900 per share due to our updates on new projects and the benefits from land compensation in the proposed  master plan of Binh Duong province. Coupled with an expected dividend of VND 4,000 per share over the next 12 months, the total expected return is 22% (based on the closing price on April 8, 2024), corresponding to a BUY recommendation for long-term investment objectives

imageimageimage 143 image 0

TCM – Eland will be the main growth driver in 2024

: Textile & Garment
: Hien Le

  • Q1-2024 revenue is estimated at USD 39 million (+6% YoY) and net profit is estimated at USD 2.5 million (+9% YoY). Revenue and net profit growth as the low base of 2023 and orders increase.
  • The business plan for 2024 targets a revenue of VND 3,707 bn (or 157,7 mn) (+12% YoY) as a doubling of Eland orders compared to the same period. Gross margin is expected to improve due to changes in the sales portion, with net profit is expected to reach VND 161 bn (or 6.8 million USD) (+ 21% YoY).
  • We believe that the company's revenue plan for 2024 is feasible due to the doubled of order volume from the major customer/shareholder Eland (with Eland’s revenue in 2023 amounting to VND 746 billion). Additionally, we expect net profit growth to be higher than planned as the sale of the Trang Bang factory and land in the Vinh Long area will be realized this year.
  • We are reassessing the valuation of TCM as we need to observe additional factors affecting the industry and the company's prospects. The stock is currently trading at a P/E ratio of 36x, higher than the 5-year average P/E ratio of 19x.

imageimageimage 58 image 0

ACB - Promising outlook for recovery

: Banking
: Chinh Dang

  • The bank has presented a relatively cautious plan for 2024 at its annual General Meeting of Shareholders (AGM). Total assets are expected to grow by 12%, reaching approximately VND 805,050 bn (USD 32,857 mn). It is important to note that the 14% credit growth target in the plan represents the limit allocated for the entire year for ACB. Additionally, we anticipate that ACB may be granted additional credit limits by the end of the year based on evaluations by the State Bank of Vietnam
  • Preliminary net profit before tax (PBT) for Q1/2024 amounted to VND 4,900 bn (USD 200 mn), a decrease of 5% year-on-year (YoY), achieving 22.27% of the 2024 plan. The decline in Q1 PBT was mainly influenced by non-interest income sources, particularly bancassurance fees, and high collection in Q1/2023. Meanwhile, based on the bank's disclosed PBT level, we estimate that net interest income will grow by approximately 12.6% YoY to VND 7,000 bn when credit growth reaches 3.7% year-to-date (YTD) and the net interest margin (NIM) increases by 20 basis points (bps)
  • Our forecast for 2024’s PBT is VND 23,059 bn (USD 942 mn), marking a 15% YoY increase and a 4.8% increase compared to the bank's plan. Earnings per share (EPS) and book value per share (BVPS) stand at VND 4,710 and VND 22,000, respectively. Our latest target price is VND 32,300 per share, combined with a dividend of VND 1,000 per share, equivalent to a return of 22% compared to the closing price on April 5, 2024. Therefore, we recommend a BUY for ACB

imageimageimage 90 image 0

DRC – The growth path is less bumpy over past year

: Automobiles
: Hung Nguyen

  • Radial TBR tire maintains the riding role for DRC’s performance in 2024F of 25% YoY, owing to (1) the improvement of global goods rotation, (2) the elevated capacity in its phase-3 radial factory from 0.75 to 1.0 mn units/year from Q2-2024; and (3) the increased sales of the US market as we believe DRC’s products is able to be substitute for Thailand’s TBR tires in H2-2024.  
  • In 2024, we anticipate DRC’s operating margin will improve by +6 bps YoY due to the historic lows of 2023 coupled with our assumption that DRC will increase the natural rubber inventory reservation or level up its selling price to partly offset the upward shifts from this material. In summary, for 2024, we project DRC’s net revenue and NPAT to gain VND 5,349 bn (or USD 221 mn, +19.0% YoY) and VND 235 bn (or USD 12.2 mn, +19.9% YoY), resulting in an EPS of VND 2,331.
  • We determine a one-year target price for DRC at VND 30,300/share, based on two methods: FCFF and P/E, with respective weights of 50% and 50%, which is -11% lower than the closing price on April 4th 2024. However, DRC maintains a stable dividend policy, with an average payout ratio in 2024 of ~60%. Hence, we suggest that investors following the arbitrage strategy can consider accumulating DRC stock when the market undergoes a significant correction at a reasonable price. Investors who prefer stable dividends can flexibly disburse when the cash dividend yield is attractive more than the bank deposits.

imageimageimage 79 image 0

SCS – Raise TP to VND 95,600. Reiterate BUY recommendation

: Aviation
: Tung Do
Tags:  Q1/2024 results

  • We have adjusted the target price for SCS to 95,600 VND, up 6% from the latest TP, implying an expected total return (including a cash dividend of 5,000 VND/share) of 36% as of April 3rd, 2024. We reiterate a BUY recommendation for SCS.
  • The volume of international cargo has shown robust growth following collaboration with Qatar Airways. International volume in Q1/24 is estimated to reach nearly 43 thousand tons (+40% YoY), while domestic volume reaches 15.8 thousand tons (+23% YoY).
  • For the year 2024, projected revenue and net profit after tax (NPAT) are VND 974 billion (+38% YoY) and VND 659 billion (+32% YoY), respectively. The forecasted EPS for 2024F is 6,300 VND.

imageimageimage 104 image 0

HPG – Dung Quat 02 Complex to be the long-term growth driver

: Materials
: Thach Lam Do, CFA
Tags:  HPG

  • The Dung Quat 02 Steel Complex (DQ02) has a designed capacity of 5.6 mn tons of HRC/year, divided into 2 phases. In which, phase 01 has the capacity of 2.8 mn tons/year, and it is expected to start trial production in the 4Q24, and begin operation from the 1Q25. As of March 2024, the project has completed 50% of phase 1’s total progress, in which HPG has completed 90% of the construction of main items (roller mills, steel smelting, iron smelting, coke smelting, and raw material processing plants) and completed more than 50% of the total steel structure.
  • With the current construction progress of the Dung Quat 02 complex, we believe the factory will be able to be put into operation from the 1Q25 as planned, with relatively high efficiency (utilization rate of 80% for phase 01, corresponding to 2025 HRC output of 2.24 million tons). Thereby, HPG's revenue in 2025 can reach VND 197 tn (USD 8.1bn, +35%YoY), with 2025 gross profit can reach VND 30.6tn (USD 1.3bn, +59%YoY), and net profit to reach VND 21tn (USD 864mn, +85%YoY). The corresponding EPS in 2025 will be VND 3,380.
  • We use two methods (FCFF and PB) to evaluate the stock; our fair value comes at VND 36,600 per share, implying a total return of +20% as of the closing price on April 02nd, 2024, equivalent to a BUY recommendation for long-term investment purpose for Hoa Phat Group Jsc

imageimageimage 114 image 0

Anticipated PCE inflation signal for the Fed’s first rate cut

: Macroeconomics
: Luan Pham

  • Fed’s key inflation indicator holds steady, as anticipated.
  • A normalization of super core PCE and services inflation.
  • PCE inflation trends point towards a rate cut in June.

imageimageimage 76 image 0

Fisheries Industry - Prospects of Major Markets

: Fishery
: Hien Le

  • The export value in the first two months of the year has increased by 28% YoY, with the export value of Pangasius rising by 8% YoY and shrimp increasing by 28% YoY. The increase in export value is primarily due to an 18% YoY increase in Pangasius volume and a 32% YoY increase in shrimp volume, while prices continue to decrease by 9% YoY and 3% YoY, respectively.
  • The Pangasius industry in 2024 is expected to see growth in export volume in the US and China markets, while the EU market will remain stable compared to the previous year. Price increases in major markets are expected to be challenging compared to the period year due to high price competition and abundant supply of Tilapia and Pollock.
  • The shrimp industry in 2024 is expected to see growth in both export volume and price recovery in the Japanese market as its low base and increasing wages in Japan. For the US, China, and EU 28 markets, competition with raw shrimp from Ecuador and India remains high, so we expect export volume to increase due to economic recovery while prices may not rise due to abundant shrimp supply.

imageimageimage 154 image 0

Seaport industry – Awaiting the wave of recovery in 2024

: Seaports
: Quan Cao

  • Accumulated 2M2024, the estimated value of container via sea ex-im of goods were USD 32 billion (+17% YoY) and USD 20 billion (+13% YoY), respectively.
  • Accumulated 2M2024, the container throughput in Hai Phong and Vung Tau regions were 1,005 thousand TEUs (+30% YoY) and 900 thousand TEUs (+55% YoY), respectively.
  • For 2024, the import-export demand could recover strongly  as early indicators are sending positive signals.

imageimageimage 136 image 0

DCM - 2024 Fully depreciated urea plant drives earnings growth

: Fertilizer
: Ngan Le

  • We project the revenue and MPAT-MI in 2024 to reach VND 14,470 billion (USD 603 million) and VND 1,622 billion (USD 68 million) respectively, marking a 15% YoY increase in revenue and a significant 46% YoY surge in NPAT. The NPK segment is expected to be a revenue growth driver after the merger with the NPK Han-Viet plant, while the fully depreciated urea plant will stimulate profit growth in 2024.
  • At a projected 2024 EPS of VND 3,064, DCM shares trade at a forward PE of 11.6x, higher than the 5-year average of 10.1x, showing that the current share price reflects the prospects of increasing business profits in 2024.
  • In 2024, it is expected that the amended VAT law (imposing a 5% VAT on fertilizer products) will be implemented at the conference for review and comment at the 7th meeting (May-2024), and approved at the 8th meeting (Oct-2024). If the Law is passed with fertilizer products moving from non-taxable to 5% VAT, we expect domestic fertilizer producers will be able to compete with imported products thanks to lower costs.
  • However, the intention of including fertilizer products into VAT’s item list has been considered at many National Assembly session but has not yet approved. Therefore, we do not yet include this factor in our assumptions for forcasting the business’s results. We will re-evaluate when we have more information after the 7th session of the National Assembly.

imageimageimage 105 image 0

Update on monetary market in March 2024

: Macroeconomics
: Ha My
Tags:  Monetary market

  • The SBV's liquidity withdrawals may be near its peak.
  • Credit improved slowly despite reduced lending interest rates.
  • The dong may depreciate by 3% in the first half of 2024.

imageimageimage 105 image 0

PNJ – Retail segment will drive the growth in 2024

: Retailing
: An Nguyen
Tags:  PNJ Jewelry

  • In the picture of economic recovery, we believe that retail segment will be growth driver for PNJ’s performance in 2024, in the pillars of, (1) the increase in jewelry demand; (2) the leading position of PNJ in reaching customers thanks to the largest store network throughout Vietnam; and (3) PNJ‘s various advertising and promotional campaigns.
  • In the assumption that the gold prices will be traded at high level in 1H2024, we forecast 2024 net sales and NPAT–MI to reach VND35,375 bn (or USD1,461 mn; +6.8% YoY) and VND2,245 bn (or USD93 mn; +13.9% YoY), respectively. The equivalent EPS is VND6,345 (+13.9% YoY).
  • Based on the P/E (50%) and FCFF (50%) valuation methods, we raise PNJ's target price to VND97,500 from VND86,200 in our previous report, based on: (1) Increase 2024 NPAT-MI; and (2) Decrease WACC. PNJ’s stock price has increased by +15% YTD on the expectation of both recovery in the retail segment in 2024  and surge in the gold bar price. Therefore, we suppose that the positive expectation of PNJ’s performance has been reflected in the stock price movement.
  • However, PNJ still has both upside and downside risks. We recommend investors to follow new signals from PNJ’s operations over the next 12-month that are not included in our current forecast, or wait for a correction in PNJ stock prices to make a suitable investment decision

imageimageimage 73 image 0


Business UpdatePoliciesInterestCurrencySector outlookSTKTradeHAXMonetary marketSector UpdateACBDPRMacroeconomicsLHGNKGReal estateSCRRubber tiresPharmaceuticalsIndustry updateIndustry outlookITAutomobiltesBusiness result updateExchange rateRetailingSeaportsIndustrial Real EstateEarnings updatesIndustrial Land REOil & GasTextile2023 outlookthe 2023 plan is ambitiousEGM updatesEarnings updateIndustrial ParkResult Update2023 Result Update, Attractive cash dividendBond yieldsPowerNickelMortgageAviation4Q22 resultsUtilitiesDrilling market4Q22 Results updaterising rig day rateChina's reopeningbanking4Q results updateOffshore wind powerSu Tu TrangBlock BMonthly update Jewelry retailCTG4Q22 updateIT Industryinterest rateOil Gas transportationCharter rate hikeFleet expansionQuarterly forecastAGMDecreasing fertilizer pricesAttractive cash dividendPharmaceutical2023 GuidelinePreliminary results2023 AGMHigh oil priceOPEC+ cutSteelattractive valuationhigher charter rateresults update1Q23 results updateQuarterly Business Result Updaterising rig day rateslegalProjectPre-sales1Q2023 results updateSugar industryValuationAutomotive salesprices of raw milk powderVietnam dairy companiesgross marginVinamilkDairy industry updateregression testConsumer staplegoldShrimp2H23 outlookquarterly result previewair cargo1Q23 updateOffshore windfarmlive hog pricesHigher demandcommodity pricesSugar outlookrising charter ratesVietnam consumer stapleVietnam dairyhigh dividendfalling selling priceAutomobile sales2H2023 outlookMaritime2Q results updateday rate remains highcompensation for terminated contractbusiness resultdairy industry2Q2023 earnings update2Q232H 2023 outlookBanking IndustryOil priceRussiaSaudi Arabiadraft IP lawIndustrial parkstruck tiresshopping seasonretail industrySeaportdebt3Q2023DGWICTLaptops & TabletsMobile PhonesPostal10M2023Frisheryoil&gasBusiness Results Preview4Q2023JewelryQ1/2024 resultsTextile & GarmentMarket pricesQ1-2024 Update