PVT – 2Q2023 results to benefit from new vessels and higher freight rates.
06-07-2023
: PVT
: Oil & Gas
: Vu Tran
Tags: Fleet expansion results update rising charter rates
- 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.
FPT – 5M-2023 Results Update
05-07-2023
: FPT
: Technologies
: Tung Do
Tags: results update
- 5M-2023 revenue reached VND 20 trillion (+23% YoY) while NPAT-MI amounted to VND 2.5 trillion (+20% YoY), fulfilling 38% and 40% of our full-year forecasts respectively.
- Global IT services have not yet witnessed any signs of deceleration, growing by 32% YoY in revenue and by 29% YoY in EBT. This result was mainly due to the superiority of the Japanese market (+41% YoY) and APAC (+50% YoY), which offset the deceleration of the US market (+15% YoY).
- The Telecom sector and domestic IT services segments faced a challenging business landscape, recording EBT growth of 6% YoY and -61% YoY respectively.
- We maintain the TP for FPT at VND83,400, equivalent to an expected return (including cash dividends) of 14%. Given that FPT has rallied 11% since the last recommendation, we downgrade our recommendation to ACCUMULATE.
Seaport industry – Too early to expect a recovery at the beginning of 2H2023
04-07-2023
: GMD, HAH, VSC
: Seaports
: Quan Cao
Tags:
- Vietnam's major export markets are the US, China, and the EU, with export market shares of 28%, %, and 11%, respectively, experiencing negative growth. In 5M2023, the estimated export value through sea containers to these markets was USD 21.9 billion (-19% YoY), USD 9.1 billion (-4% YoY) and USD 8.5 billion (-9% YoY), respectively. In the first two months of Q2-FY23, the export value to European-American markets continued to grow in double digits, while there were signs of recovery for the intra-Asian region.
- In the Vung Tau region, there was a significant decrease in container throughput compared to the Hai Phong region. Accumulated 5M2023, the total container throughput in the Hai Phong and Vung Tau areas were 2.4 million TEUs (-5% YoY) and 1.8 million TEUs (-25%), respectively.
- In June 2023, Vietnam's PMI of 46.2 was still below 50 points for the fourth consecutive month, showing that the health of the manufacturing industry continues to decline. Weak demand conditions are the main cause of a decrease in the number of new orders. We think that the seaport industry will unlikely recover as soon as 2H2023 as expected because the picture of trade activities is not bright.
Steel industry in the first half: Consumption bottoming out
03-07-2023
: HPG, HSG, NKG
: Materials
: Trinh Nguyen
Tags: Steel
- Recovery remains unsustainable even after more than a half year from trough.
- HRC exports took a rare spotlight.
- 2Q2023 earnings season is starting, investors should monitor profits
PHR – The upside value is on potential mode
30-06-2023
: PHR
: Industrial Land RE
: Hung Le
Tags:
- We think that there is still uncertainty related to rubber price and progress of handover to the tenants in VSIP3, that may affect the success of 2023 business plan. In our base case, the total revenue is estimated at VND 1,685 billion (USD 73.8 million, -1.4% YoY), NPAT could reach VND 528 billion (USD 23.1 million, - 40.4%YoY), fulfill 96% 2023 plan. The corresponding EPS will be 3,896 VND.
- In the long term, the rubber segment seems not profitable compared to the industrial park business. PHR is in transition phase to focus on IP segment. However, there are still barriers ahead related to regulations including 1/ Restructuring plan of GVR – a state own enterprise (SOE), 2/ Land used after going equitization following 60 resolution/2018/QH2014 as it require the asset has to be used as the initial register purpose, 3/ Decree 167/2017/ND-CP on disposition of public property, which required auction process, and 4/ the investment law that regulates who to be chosen as the investor of the project. GVR and PHR are trying to solve each of these bottlenecks.
- Target price is revised up by 19.5% to VND 49,000/share as we reflect positive outlook of NTU-3 (Ownership of 32.85%) when the crucial bottleneck was solved, and land handover of the project will be processed further. Combined with an annual cash dividend of VND 3,000/share, the total expected return is +11.7% (based on the closing price as of June 30th, 2023).
Sugar industry – Sugar prices increase following tight global supply
29-06-2023
: QNS, LSS, SLS, SBT
: Sugar
: Loan Nguyen
Tags: Sugar outlook El Nino
- The global sugar supply is currently experiencing a notable contraction due to several factors, resulting in lower-than-anticipated output from major-producing nations.
- Vietnam's sugar prices are aligned with global trends, albeit with a delay and at a comparatively slower pace. In our assessment, the upward trajectory of sugar prices, driven by supply constraints, is anticipated to persist throughout the latter half of 2023. Therefore, we anticipate that sugar prices will remain at a relatively high level in the near future, although the rate of increase may not be as pronounced.
- World sugar futures contract prices are declining, potentially disrupting the over-positive sentiment fueling recent stock price increases. Investors should closely monitor the sugar price trend in case of short-term holdings.
Infrastructure development to be the prospect for the real estate market recovery
28-06-2023
: KDH, NLG, HDG, VHM
: Real Estate
: Thach Lam Do
Tags: Real estate
- Since 1H2023, sepecial urban cities in Vietnam (Hanoi, Ho Chi Minh) have restarted the progress of Ring road and highway system construction, as part of fiscal policies to support economic growth. The Ring road 03 and the Bien Hoa -Vung Tau expressway in HCMC organized groundbreaking ceremonies on June 18, as more than 81% of the land needed for the section of the project that crosses the city are handed over. The Ben Luc – Long Thanh highway (which is a part of Ring Road 03 and connect HCMV with Long An and Dong Nai provinces) is on the process of re-construction. The completion time will be in 2025. Those form the transport route connecting Mekong River Delta – HCMC – Southeast region.
- In the short-term, we expect that the kick-off of those projects will warm up the real estate market which has been on frozen status since 2022. In the long-term, as the market recovers and becomes more attractive for customers, projects located near the ring roads/highway system will get benefits.
- For the eastern North-South Expressway, the Ministry of Transport will try to put expressways into operation by 2025, with the goal to connect economic regions, especially between the Central and the Northern and Southern regions. In the long-term, it will be the support factor for the hospitality real estate market, especially for coastal cities in the South Central Coast. However, lack of corridors will be the bottleneck for this segment, and we expect the issues to be resolved from late 2024, after related amended Law (the Land Law, the Real Estate Trading Law, the Housing Law) are completed.
BID – Completion of enhanced provisioning process
27-06-2023
: BID
: Banking
: Chinh Nguyen
Tags:
- BID demonstrates its position as one of the leading banks in the industry by maintaining growth in most of its core business segments. Specifically, net interest income increased by 9% YoY and net fee income grew by 19% YoY. Although total operating income grew only 6.5% YoY, provision expenses became a factor that helped BID achieve a significant growth in its profit before tax of 53% YoY.
- Annualized cost of funds continued to trend up reflecting the continuous deposit rate hikes taking place in the last months of 2022, with a quarter-over-quarter 81-bps increase. Meanwhile, as average loan yield followed a lagging repricing trajectory, which improved by 57 bps and translated into a 61-bps climb in assets yield, BID’s NIMs (annualized) kept declining by 15 bps QoQ to reach 2.67% in 1Q23. Despite that, the widened share of higher-yield customer loans in total interest-earning assets allocation also made a favorable contribution to NIM, offsetting the comparatively poor average yield of debt securities.
- Strengthening the provision to supplement the LLR in the previous years will provide a basis for the company to reduce credit costs in the future. We project the bank's credit costs to be 1.4% and 1.2% for 2023 and 2024, respectively, compared to the range of 1.67% to 2.3% during the period of 2018-2022. Projected PBT for 2023-2024 is VND 26,992 billion (+17.3% YoY) and VND 35,305 billion (+30.8% YoY).
- We estimate the fair value of BID at VND 48,600/share, equivalent to a forward P/B for the one-year timeframe of 2.08x. This price is equivalent to an expected return of 9.7% compared to the closing price on June 27th, 2023. Therefore, we recommend to ACCUMULATED BID.
Update on monetary market in Jun 2023
26-06-2023
: VDS
: Macroeconomics
: Ha My
Tags: Monetary market
- Excess liquidity in June 2023.
- Credit and deposit growth slowest in 10 years.
- The SBV continued to reduce the regulatory interest rates
IMP - Continue to maintain impressive growth rate
23-06-2023
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags:
- In May 2023, net revenue and PBT were VND 142 billion (+48% YoY) and VND 33 billion (+81% YoY), respectively.
- Accumulated 5M2023, net revenue and PBT were VND 774 billion (+50% YoY) and VND 165 billion (+61% YoY), respectively completing 44% and 47% of the plan for 2023 and 37% and 38% of our forecast.
- For 2023F, net revenue and NPATMI were VND 2,110 billion (+28% YoY) and VND 346 billion (+48% YoY), of which the ETC and OTC channels revenue reached VND 975 billion (+70% YoY) and VND 1,064 billion (+8% YoY). EPS for 2023 is 4,413 VND.
- We raise the target price from 65,800 VND/share to 68,500 VND/share because the drug bidding on ETC channel is more exciting than expected and is expected to continue to be maintained in 2024. We maintain an ACCUMULATE rating.
PC1 – Growth outlook seems priced in
22-06-2023
: PC1
: Utilities
: Hoai Trinh
Tags:
- Q1/2023, PC1 recorded net revenue and NPAT-MI of VND 1,505 bn (+2% YoY) and VND 14.7 bn (-89% YoY), respectively. Despite the new contributions from nickel project and Nomura IP, the low profit is reflected in (1) lower earnings contribution from hydropower plants, whose output plummeted by 59% YoY, and (2) higher interest expenses, which totaled VND 202 bn (+81% YoY).
- In 2023, we expect net revenue and NPAT-MI to be VND 8,942 bn (+7.0% YoY) and VND 505 bn (+9.8% YoY), respectively. The earnings contribution from the Nickel project and IP real estate is expected to compensate for the power construction and hydropower segments. Although not exposed to exchange rate losses as in 2022, interest charges will continue to put pressure on the company’s earnings as PC1 extends its scale in both short-term and long-term debts.
- We raise our one-year target price to VND28,900/share (up 10% from VND26,000/share) when (1) adding IP real estate to valuation and (2) setting a new target P/E for the period between mid-2023 and mid-2024. Currently, we believe that the growth outlook seems priced in. As a result, we rate PC1 NEUTRAL with a 3% upside based on the closing price on Jun 22nd, 2023.
Bottoming out pork prices bring glimmer of hope for pork companies in 2023
21-06-2023
: DBC, MML, HAG, BAF
: Food, Beverage & Tobacco
: An Nguyen
Tags: live hog prices commodity prices Higher demand
- As of Jun 14th 2023, the average selling price of Vietnam live hog reached VND59,000 per kg (+20.4% from the bottom). Given the recovery of pork consumption, the upward trend of prices is supported by the low supply. We suppose that pork prices might keep increasing as the supply could not increase consistently with demand in the short-term.
- Although global prices of livestock commodities is forecasted to go up in 2H2023 due to the risk of low production from El Nino and Russia-Ukraine tensions, we believe that local prices of livestock commodities will be traded at the level as same as in 2022 this year. The main reason is the downward trend of global prices between Aug-2022 and Jun-2023 which will be translated into local prices in 2023.
- With the price of over VND55,000 per kg, pork breeders have profits. Therefore, we believe that the upward trend of live hog prices brings a glimmer of hope to the pig farming companies. Particularly, it will enhance the profit margin of pork breeders in the next three quarters, then generating positive growth in the 2023 bottom-line.
06-07-2023
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