C&G Market (Collagen and Gelatin) and growth prospect
05-02-2024
: VHC, ANV
: Fishery
: Hien Le
Tags:
- According to a report by Precedence Research, the global collagen market is estimated to reach a capitalization of USD 10.08 bn in 2022, with a projected Compound Annual Growth Rate (CAGR) of 8.9% during the 2023-2032 period as (1) the increasing demand for collagen to enhance joint and skin health as the world's average age rises, and (2) the gradual increase in individual incomes, which is expected to stimulate higher spending on health care products.
- US, Germany, Japan, and Canada are major importer of C&G powder products, while China is the largest exporter of C&G powder. The C&G powder market has achieved a compound annual growth rate (CAGR) of 5% during the 2013-2022 period. Among the top importing countries, the volume of collagen powder imports has surpassed that of Gelatin. The prices of C&G range from approximately USD 7-9/kg in major importing countries.
- The entry of VHC into the C&G market (since 2015, primarily in powder form) and ANV (since 2023) is expected to optimize by-products from pangasius. We anticipate that the C&G segment of VHC and ANV will achieve double-digit CAGR for the 2024-2032 period as companies increase their factory capacities to meet consumer demand.
ACB - Sustaining growth focused on quality and efficiency
02-02-2024
: ACB
: Banking
: Chinh Dang
Tags:
- ACB announces its Q4 operational results with consolidated total operating income (TOI) reaching VND 8.4 trillion (USD 381.82 million) (+5.7% YoY and -0.5% QoQ) and profit before tax (PBT) reaching VND 5 trillion (USD 227.27 million) (+39.7% YoY and +0.2% QoQ), attributed to sustained growth in income and effective cost control
- For the entire year of 2023, the cumulative total operating income and profit before tax are VND 32.7 trillion (USD 1.485 billion) (+14% YoY) and VND 20 trillion (USD 909.09 million) (+17% YoY), successfully achieving the bank's 100% profit plan for 2023. Key drivers for income and profit growth include (1) a 6% YoY increase in net interest income, (2) a 48% YoY increase in non-interest income, and (3) a 6% YoY reduction in operating expenses
- The non-performing loan ratio for customer loans is 1.22%, up 1 basis point from the previous quarter, partly influenced by the CIC. Regarding the internal portfolio, the non-performing loans for personal customers stand at 1.1%, and for business customers, it is 1.11%. ACB's structured debt as of the end of 2023 is VND 2.2 trillion (USD 100 million), compared to VND 1.8 trillion (USD 81.82 million) in September
- Looking ahead to 2024, we anticipate the bank's total income to grow at a faster rate than in 2023, driven by net interest income. Additionally, we expect the bank to effectively manage internal non-performing loans, while the impact of CIC gradually diminishes, maintaining profit growth in the double digits as in previous years. The current target price is VND 29,000 per share, and we are reviewing adjustments to better reflect recent positives
PVD – “April showers bring May flowers”
01-02-2024
: PVD
: Oil & Gas
: Ngan Le
Tags: PVD oil&gas
- In 4Q2023 PVD reported revenue of VND 1,747 bn (USD 74 mn; +20% YoY), led by drilling services. Overall, PVD recorded revenue of VND 5,812 bn (USD 245 mn; +7% YoY) and NPAT-MI of VND 579 bn (USD 24 mn, 2022: loss of VND 103 bn) for FY2023. 2023 EPS is VND 803.
- Thanks to the high demand for rigs in SEA, all of PVD’s drilling rigs have secured contracts for 2024 with a day rate of USD 90k – USD 100k (+11% YoY). This will partly ensure the company’s bottom line in 2024, which is anticipated to increase by 12% YoY to VND 646 bn (USD 27 mn). Correspondent EPS and BVPS are VND 1,161 and VND 27,508.
- In 2025-2026, drilling activities in the domestic market are anticipated to become vibrant thanks to major O&G projects such as Block B, Su Tu Trang 2B and Lac Da Vang. The well services segment is also expected to boom as a result.
- We remain ACCUMULATE and raise PVD’s target price by 7% to VND 33,000/share to reflect PVD’s NPAT growth outlook in 2024.
ACV – 4Q-2023 Financial Results: Profit Falls Short of Expectations but Some Positive Signs Emerge
31-01-2024
: ACV
: Aviation
: Tung Do
Tags: ACV
- ACV has announced its Q4-2023 financial results, reporting revenue and net profit (excluding Takeoff/Landing operations) of VND 5.1 trillion (+24% YoY and -5% QoQ) and VND 1,310 billion (+26% YoY and -46% QoQ), respectively.
- The increase in the proportion of international passengers helped mitigate the QoQ decline in revenue compared to passenger volume (-17% QoQ), surpassing our previous expectations.
- Despite falling short of our profit expectations due to ACV increasing provisions for overdue receivables from Bamboo Airways, Pacific Airlines, and Vietravel Airlines, there are several positive points to note: (1) ACV has provisioned for most of the bad debts from the aforementioned airlines, significantly reducing the provisioning pressure for 2024, and (2) ACV has begun to reverse provisions of VND 260 billion for bad debts from Vietjet.
- For the full year, ACV recorded revenue of VND 20 trillion (+45% YoY) and net profit (excluding Takeoff/Landing operations) of VND 7.3 trillion (+18% YoY), equivalent to an EPS of 3,362 VND, surpassing full-year profit plan by 25%.
- The current target price of VND 77,600, and the 2024 forecasts will be updated in the upcoming report
Residential market – Expectations for a broader recovery
30-01-2024
: KDH, NLG, HDG
: Real Estate
: Thach Lam Do, CFA
Tags: KDH NLG HDG
- Within the framework of the residential industry, we believe that the land law has provided a relatively complete legal framework, which has a clear impact on companies in the industry: 1/ The residential real estate sector will be developed more sustainably, reducing the phenomenon of investors those consolidate agricultural land and develop projects that are inconsistent with local general plans; 2/ For developers with land funds that are facing legal issues, their projects will have to wait until 2025, when the amended Land Law comes into effect and the guiding Decrees are completed, to be able to continue the legal process to put them into operation.
- The major points of the Land Law (amended) including: 1/ Provide regulations to ensure consistency of the planning system; 2/ Projects which will be directly recovered by the State (Social housing projects, Urban area projects with various service functions, investment projects to renovate and rebuild apartment buildings, sea reclamation projects for socio-economic development purposes,…); 3/ Detailed regulations on cases of land allocation through (a) auction of land use rights, (b) bidding for investor selection and (c) agreement on obtaining land use rights; 4/ Specific regulations on valuation methods to determine land prices and applicable conditions (Articles 158 with 04 methods), whereby land use fees will be calculated closer to market prices, increasing efficiency in state budget collection activities, but will also increase project’s development costs in the future (Residential land prices maintain a long-term upward trend).
- For tier-I cities, we believe that units serving residential needs (especially the apartment segment) will continue to be promoted for sales in 2024. For low-rise units, we expect secondary prices to recover more significantly in the 2H2024, thereby supporting sales of these unis in the primary market. For tier II cities, given secondary market shows no signs of bottoming out and recovering, we believe that the primary market and sales events in tier-II cities will also recover more slowly than in tier-I cities.
MSR – 2024 profit is expected to improve thanks to increasing selling prices
29-01-2024
: MSR
: Retailing
: An Nguyen
Tags: MSR
- Q3 2023, Masan High-Tech Materials Jsc. (UPCOM: MSR) recorded net sales of VND3,590 bn (or USD150 mn; +1.7% QoQ; +1.8% YoY). Net sales increased QoQ due to the growth of the Copper segment. NPAT–MI continued to be negative at VND-229 bn (or USD-10 mn) due to high costs pressure, however, higher than Q2 2023 NPAT–MI at VND-515 bn (or USD-21 mn) thanks to quarterly recovery in selling prices.
- Due to weak 1H2023 result, 9M2023 accumulated net sales and NPAT–MI reached VND10,905bn (or USD454 mn; -6.4% YoY) and VND-740bn (or USD-31 mn; VND262 bn or USD11 mn in 9M2022), respectively.
- Gross profit margin improved in Q3 2023, reaching 11.1% (+460 bps QoQ; -500 bps YoY) thanks to a quarterly recovery in selling prices. The SG&A expenses/sales ratio slightly decreased compared to Q2 2023, reaching 6.6% (-60 bps QoQ; -60 bps YoY) thanks to effective SG&A expenses management. As a result, the operating profit margin was improved, reaching 4.5% (+510 bps QoQ; -440 bps YoY).
- In 2024, we expect that MSR’s revenue will continue to increase because (1) Production volume will return to normal level as NPMC (Nui Phao Mining Company) will return to operate; and (2) Commodity prices (such as Copper, Bismuth, or ATP) will increase. The gross margin will continue to recover in 2024. Without recorded unusual expenses from the blasting interruption as in 2023, and the ability to utilize SG&A expenses, we expect that MSR will record 2024 positive net profit
Update on monetary market in Jan 2024
26-01-2024
: VDS
: Macroeconomics
: My Tran
Tags: Monetary market
- Real estate credit growth was differentiated in 2023.
- Credit growth 2024: cautious optimism.
- Possibility of extending the term of Circular 02.
- Exchange rates increased sharply in the first month of the year
HND – 4Q23 recorded a significant loss due to a shift in accounting for major repair costs
25-01-2024
: HND
: Utilities
: Hoai Trinh
Tags: HND
- In Q4 2023, HND recorded an electricity production volume of 1.768 bn kWh (-4% QoQ, +30% YoY). NPAT reached VND 2,238 bn/USD 91 mn (-9% QoQ, +17% YoY), with a significant drop in the ASP during Q4. Despite a gradual reduction in total debt and low-interest expenses, HND reported a net loss of VND 115 bn/USD 5 mn, compared to a loss of VND 7.5 bn in Q4 2022. This was primarily due to a change in the accounting for major repair costs (recording expenses for the overhaul of the S1 unit at VND 267 bn, moving away from previous years' practice of pre-allocation and reversal). Overall, for FY23, HND posted net revenues and NPAT of VND 11,142 bn/USD 43 mn (+9% YoY) and VND 417 bn/USD 17 mn (-24% YoY), respectively, aligning with our earlier forecasts. The corresponding EPS for 2023 stood at 1,111 VND per share.
- Based on the electricity operation plan and the business strategy outlined by the company, we forecast HND's electricity production in 2024 to register 7.5 bn kWh, a 5% increase YoY. Assuming an average decrease of 7% YoY in the cost of mixed coal input for 2024, we project a 5% YoY reduction in HND's average selling price. Consequently, we forecast HND's net revenue and NPAT in 2024 to reach VND 11,376 bn/USD 463 mn (-1% YoY) and VND 555 bn/USD 23 mn (+33% YoY), respectively. The corresponding EPS is projected at 1,234 VND per share.
- For the dividend payout plan for 2023, in addition to funds from operational results, HND will also allocate from the Development Investment Fund (dedicating VND 276 bn for a dividend of 552 VND/share). This decision was approved at the EGM in 2023. We expect the total cash dividend payout in 2024 for FY2023 to reach 1,552 VND/share. We maintain an ACCUMULATE recommendation with a target price of 15,500 VND/share, corresponding to an expected return of 14% based on the closing price as of January 25, 2024.
TCB – POSITIVE SIGNALS PERSIST
24-01-2024
: TCB
: Banking
: Chinh Dang
Tags: TCB
- In the fourth quarter of 2023, TCB recorded total operating income (TOI) and net profit of VND 11 trillion (USD 446 million) (+16.9% YoY and +5.8% QoQ) and VND 5.7 trillion (USD 231 million) (+21.6% YoY, -1.2% QoQ) respectively. It is evident that the bank's operational income began to recover in Q4/2023. Simultaneously, effective cost control served as a driving force for profit growth in Q4 compared to the same period. Cumulatively for the entire year 2023, TCB's total operating income (TOI) and net profit were VND 40 trillion (USD 1.6 billion) (-2% YoY) and VND 22.8 trliion (USD 926 million) (-10.5% YoY) respectively, achieving 104% of the bank's profit plan for 2023.
- As of the end of the fourth quarter, TCB's non-performing loan (NPL) ratio was 1.16%, marking a 20 basis points decrease QoQ. Concurrently, “G2 loans” ratio continued to demonstrate positive trends, decreasing to 0.86% from 1.26% at the end of the third quarter. The outstanding balance of structured loans according to Circular 02 at the end of 2023 for TCB was VND 1.8 trillion (73 million USD) with a 100% provisioning.
- Despite modest expansion potential in the first half of 2023 due to challenging conditions, the bank's business operations signaled a bottoming out as net profit in the second half grew by 3% compared to the first half and increased by 1.4% 2H2022. We anticipate this trend to continue improving in the coming quarters as the bank gains some control over certain bottlenecks related to funding costs, investment banking, and bancassurance activities
TLG – Stand steadfast in the face of macro headwinds
23-01-2024
: TLG
: Consumer Durables
: Hung Nguyen
Tags: TLG
- In 10M-2023, TLG’s net revenue reached VND 3,036 bn (or USD 127 mn, +0.8% YoY). Of which, domestic & export sales recorded by +0.9% YoY and +0.4% YoY, respectively. This growth was due to the stable demands for writing instruments & school supplies, even in the context of an economic slowdown.
- 10M net profit margin narrowed by -250 bps compared to the same period last year, mainly driven by an increase in SG&A expenses of +9.4% YoY. Since Q4-FY22, TLG has boosted their branding activities, such as a debut of Clever Box stores, proceeding Mega Color events & “key store program”, or recruiting more marketing and sales staff.
- In 2024, we expect that TLG‘s profitability would improve YoY in the pillar of (1) the continuous efficiency of “brand-repositioning strategies”, (2) the recovery of office supplies and art material’ consumption in both domestic and export markets, (3) the low levels of input material’ prices, and (4) optimizing the sales channel structure and product portfolio.
- TLG is currently trading at trailing P/E ratio of 12.5x, which is higher than its 10y-historical average of 11.6x. We believe the company’s PER has been re-rated in recent years owing to its strategies to expand its market share in both domestic and export markets and improving the profit margin. Hence, investors should closely monitor the company’s sales and profit margin improvements in the upcoming quarters for the stock investment timing. Last but not least, the company’s ability to maintain a cash dividend of at least 20% (even during the Covid-19 years) is a plus which investors should be noticed.
IMP - Expectations for the ETC channel to be a driving force for sustaining growth in 2024
22-01-2024
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: IMP
- In Q4-FY23, revenue and NPAT were VND 608 billion (+9% YoY) and VND 72 billion (-8% YoY), respectively. In which, revenue from self-produced pharmaceuticals accounted for 92% of total net revenue. The two main sales channels, ETC and OTC, reported revenues of VND 300 billion (+28% YoY) and VND 257 billion (-2% YoY), respectively.
- Forecast for 2024F, revenue and NPAT will be VND 2,229 billion (+13% YoY) and VND 367 billion (+36% YoY), EPS is 4,458 VND. In which, revenue from ETC and OTC will be VND 1,016 billion (+20% YoY) and VND 1,116 billion (+7% YoY).
- We maintain a target price of 74,000 VND/share, implying a P/E valuation for 2024F at the target price of 16.6x. We are changing our recommendation from BUY to ACCUMULATE due to the market price having increased by 16% since the previous recommendation.
ANV – High growth opportunities from Chinese market
19-01-2024
: ANV
: Fishery
: Hien Le
Tags: ANV
- According to Argomonitor, although 2023 is a challenging year for the pangasius industry with export turnover reach nearly USD 1.9bn (-24% YoY), ANV's export value only decreased by 9% YoY as Chinese market grew (+74% YoY). We estimate that ANV's revenue and NPAT-MI will reach VND 4,577bn (USD 188mn, -6.5% YoY) and VND 103 bn (USD 4.2mn, -85% YoY), respectively. EPS 2023 is equivalent of VND 773 (-85% YoY).
- In 2024, we estimate that NPAT-MI will reach VND 4,902bn (USD 201.7mn, +7.1% YoY) and VND 261bn (USD 10.7mn, +154% YoY), respectively. This is based on the expectation that volume and average price (ASP) will increase by 6% YoY and a 2% YoY, respectively, as (1) a reduction in pangasius supply and (2) recovery in demand in the second half of 2024 in the US and China as the holiday season comes. The gross margin is expected to improve from 10.3% to 13.8% as the decrease in feed cost. This supports NPAT-MI to reach VND 261 bn (USD 10.7 mn, +154% YoY). EPS 2024 is equivalent of VND 1,961 (+154% YoY).
- We are reviewing carefully the valuation for ANV as we need to observe additional factors affecting the export prospects of the industry and the company. ANV’s current price is trading at a P/E ratio of 25x, higher than the 5-year average P/E ratio of 11x.
05-02-2024
125 
