GMD – Need more time for the recovery as the macro context does not support
20-07-2023
: GMD
: Seaports
: Quan Cao
Tags:
- Forecast for Q2-FY2023, revenues and NPATMI are respectively VND 965 million (+7% QoQ and -1% YoY) and VND 235 million (+16% QoQ and -18% YoY). Compared to the previous quarter, revenues improved based on the recovery in volume, the GPM will slightly decrease because of the depreciation of NDV phase 2, but NPATMI will grow by double digits as GML is expected to be profitable again.
- For 2023F, net revenue and NPATMI are respectively VND 3,781 billion (-3% YoY) and VND 2,396 billion (+148% YoY), in which, core operating profit is VND 796 billion (-27% YoY) and VND 1,600 billion from divestment of Nam Hai Dinh Vu port (NHDV). EPS is 7,313 VND for 2023F.
- We used Sum-of-the-parts method (SOTP) to provide a one-year target price of 63,400 VND. Combined with a cash dividend of 2,000 VND, equivalent to a total expected return of 15%. We recommend to ACCUMULATE.
Vietnam automobile sales are expected to be brighter in 2H2023
19-07-2023
: HAX, CTF, PTB
: Automobiles
: An Nguyen
Tags: Automobile sales 2H2023 outlook
- In Jun-2023, sales of passenger cars (PCs) reached 16,572 units (+18.9% MoM; -24.9% YoY). The imported car number also presented positive growth of +18.4% MoM to 9,006 units. We believe that the positive MoM growth is a good indicator for the recovery of sales in 2H2023 on the back of favorable business conditions.
- Given upcoming favorable business conditions with issued buffer policies and the completion of road infrastructure projects, 2H2023 is turning out to be a better time for automobiles consumption than 1H2023. We calculate that the strong sales of 2H2023 will compensate for the weak sales of 1H2023, resulting in stable sales compared to the 2022 results.
- Due to the weak sentiment regarding the economic outlook in Q2 2023, we expect that results of Vietnam’s automobile distributors will suffer. However, we suppose that the picture for 2H2023 will reverse compared to 1H2023. The combination of lower registration fees and higher demand will help these companies to save costs, resulting in improved profit margins.
Update on trade in 6M2023
18-07-2023
: VDS
: Macroeconomics
: Ha My Tran
Tags:
- Trade surplus hits record high in 6M2023.
- The quarterly growth trend is a positive indicator of external demand.
- Export prospects from the US & China markets.
Money supply
17-07-2023
: VDS
: Macroeconomics
: Bernard Lapointe
Tags:
- Money supply trends are not currently market friendly.
- Broad money growth momentum in G7 countries, and elsewhere, is weak, at best
Steel and steel material prices in 3Q2023: Stable trend but dampened demand
17-07-2023
: HPG
: Materials
: Trinh Nguyen
Tags: Steel
- World steel material prices were mixed: iron ore and scrap remained up, while coking coal and HRC decreased.
- Price trend in Q3: low construction season, unlikely to drop sharply, but demand from the domestic market is going to remain weak and cannot provide a sustainable driver for steelmakers’ profitability to recover
HDB – Stable growth trajectory
14-07-2023
: HDB
: Banking
: Chinh Nguyen
Tags:
- HDB has maintained a strong performance across most of its core operations. Specifically, net interest income has grown 19.7% YoY, and net fee income of 11.3% YoY growth. Total operating income has shown a significant growth rate of 10.4% YoY. However, the Bank has simultaneously increased its provision for credit losses during the period, leading to an 8.5% YoY increase in PBT.
- As asset yield improved by a smaller extent due to the lagging repricing period, 1Q23 NIM returned to 5.1% after a steady upward momentum of 5.2% in 4Q22, on a consolidated basis. Specifically, the parent’s bank NIM was down to 3.9% from 4% in 4Q22 and NIM of HDSaison also declined to 28.7% from 30.2%, yet the falling degree remained quite modest compared to peers.
- HDB's NPL ratio from customer loans increased to 1.8%, reaching a 5-year high, yet it is still well-controlled compared to other joint stock commercial banks in the same tier.
- We estimate the fair value of HDB at 21,000 VND/share, equivalent to a forward P/B for the one-year timeframe of 1.2. This price is equivalent to an expected return of 11% compared to the closing price on July 14th, 2023. Therefore, we recommend to ACCUMULATE HDB.
MWG – 5M 2023 results: A slight signal of sales recovery in Q2
13-07-2023
: MWG
: Retailing, TCGs Retailing, Consumer Staples
: Loan Nguyen
Tags:
- MWG's May 2023 revenue dropped 10% YoY but rose 4% MoM, driven by higher CE demand in hot weather and effective promotions. Accumulated 5M 2023, MWG’s sales plunged by 21% YoY to reach VND 47,144 Bn (or USD 2.0 tn).
- ICT segment's earnings recovery is expected to follow a U-shaped pattern, with limited short-term improvement due to the lack of significant signs of improvement in consumer income and purchasing power, key drivers for a sustainable revival in the electronics retail sector. The breakeven point of BHX, anticipated in late 2023 or early 2024, is an important catalyst to consider for a potential upward revision.
- We forecast MWG’s net revenue and net income figures of VND 114/132 tn (-15%/+16% YoY) and VND 1.5/4.4 tn (-64%/+192% YoY) in FY2023/2024, respectively. 2023/2024 EPS to reach VND 1,018/2,973.
- Using the SOTP method, we arrive at a target price of 51,200/share, representing a 5% upside from the closing price on July 13th, 2023. We recommend ACCUMULATING this stock.
Vietnam’s T&G sector – Yarn exports are showing signs of revival, while textile exports are not out of the woods yet
12-07-2023
: STK, MSH, TNG, TCM
: Textile & Garment
: Hoai Trinh
Tags:
- In the first six months of 2023, Vietnam's textile and garment export turnover was 15.7 bn USD (-17.4% YoY), mostly due to declining export market consumption and brands’ destocking cycle as well as caution when placing new orders.
- While textile & garment are not out of the woods yet, fiber & yarn are showing signs of improvement, with 17% & 18% YoY volume growth in May and June, respectively. This recovery theme aligns with our expectation that since mid-2Q23, textile customers are gradually placing more new orders for season 1H24.
- Per our Q2/2023 results estimates, almost of the T&G companies in our coverage list have core business results that improve QoQ while still recording negative YoY growth.
Stock market – 1H2023 market recap
11-07-2023
: VDS
: Financial Services
: Hung Le
Tags:
- In the first half of 2023, Vietnam’s stock market witnessed the second-best return in the last eight years. 70% stocks witnessed positive YTD returns. The strong reversal of the stock market was driven by investor’s expectations about the macro-outlook as both global and local environments are favorable for the market.
- Small Cap index (24.59% YTD) and UPCOM index (+20.03% YTD), which includes speculative stocks, outperformed the others. Notably, VN Small Index is beyond the 5-years valuation range.
- Market liquidity improved gradually in the 1H2023, remarking a new stage of Vietnam stock market.
HDG – Energy to face headwinds, real estate segment to lack new projects.
10-07-2023
: HDG
: Real Estate, Power
: Thach Lam Do
Tags:
- In 1Q23, HDG recorded revenue of VND 956bn (USD 40.4mn, +40%YoY) and gross profit reached VND 575bn (or USD 24.3mn, +24%YoY, -6%QoQ). The gross profit margin (GPM) reached 60% owing to the high GPM of the energy segment (1Q23 gross profit of VND 398bn with GPM of 73%).
- For the residential segment, HDG continues to handover villas at the Ha Do Charm – phase 2 project, with expected 2023 revenue of VND 750bn (USD 31.7mn, -32%YoY). At the same time, it plans to open the third phase of sales in late 3Q2023. Given the high selling price (VND 15-25bn/unit), however, we expect that the market can absorb ~30% of total units, equivalent to an expected pre-sale value of VND 570bn.
- For the energy segment, the 2Q23 power output was 197mn Kwh (-45%QoQ, -36.5%YoY), as the hydrological conditions were negatively affected by the dry season and the El Nino phenomenon. With the high probability that El Nino phenomenon can last until 1Q24, we expect the 2023 output of power plants will reach 1,517mn Kwh (-8%YoY), and revenue of VND 1,943bn (USD 82mn, -8%YoY).
- We estimate 2023 NPAT of VND 1,112bn (-18%YoY, 115% of the company’s business plan). The 2023 EPS will be VND 3,138. Using the SoTP (Sum-of-the-parts) method, we maintain the target price of VND28,600/share (Upside -5%), equivalent to a NEUTRAL recommendation for Hado Group Jsc. We like the company’s asset with power plants and high-potential residential land bank. However, the company’s 2023 business results could poor perform due to the weaken of hydropower and residential segments as mentioned, we recommend investors to wait for further discount on the stock price to accumulate for long-term investment.
Vietnam dairy industry will benefit most from reduced input costs
07-07-2023
: VNM, MCH, KDC, QNS, SAB
: Food, Beverage & Tobacco
: An Nguyen
Tags: commodity prices Vietnam consumer staple Vietnam dairy
- The downward trend of agricultural and livestock commodity prices in 1H2023 will be reflected on the 2H2023 gross margin of Vietnam F&B companies which were hurt by the surge of input prices during the 2021-2022 period. On the expectation that the consumption of F&B products is stable, we believe that when cheap raw materials takes effect, the gross margin of the F&B industry will recover.
- Among commodities, prices of raw milk powder is below-year ago level at the end of Jun-2023 while the prices of corn, wheat, soybeans or palm oil have surged since the beginning of Jun-2023. We suppose that the lower milk powders imported from China will be the main factor limiting the upside of global milk powder prices.
- Since Apr-2023, the price performance of Vietnam F&B stocks has bottomed out. Overseas investors has turned to net buyers on F&B shares since the end of Jun-2023. Meanwhile, the trailing P/E of some leading F&B stocks such as VNM or QNS have recovered since Apr-2023. Cash seems to be moving to F&B stocks.
PVT – 2Q2023 results to benefit from new vessels and higher freight rates.
06-07-2023
: PVT
: Oil & Gas
: Vu Tran
Tags: rising charter rates Fleet expansion results update
- In 1Q2023, PVT recorded revenue of VND 2,043 bn (+1.1% YoY), while NPATMI reached VND 182 bn, (+19.2% YoY). Gross margin improved thanks to the transportation segment, which was driven by the petroleum/chemical tanker.
- With the fleet expansion and favorable freight rate trends, 2Q2023 results is anticipated to maintain its growth momentum. In details, the crude oil tanker and LPG tanker are expected to be the driving forces in 2Q2023, offsetting a slight decline in the petroleum/chemical tanker. Additionally, PVT has recorded abnormal profits from the liquidation of the Apollo Pacific and PVT Dragon vessels.
- Although 1H2023 number is positive, the 2H2023 may face challenges due to a high base last year, mainly attributed to the liquidation of Athena vessel. For the full year 2023, we forecast PVT's revenue to be up 2.1% and reach VND 9,233 bn. Meanwhile, NPATMI is expected to remain at VND861bn, equivalent to P/E 2023 of 9,3x.
- We keep a positive view for PVT as core business still records 10% growth in 2023. Assuming freight rates remain at the current levels in 2024 and the fleet is still expanding, we think that 2024 profit will still grow. Therefore, maintaining the BUY recommendation for PVT stock at 26,000 VND/share.
20-07-2023
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