PVS – The stock price is reflecting a lot of expectations from the Block B project
20-06-2023
: PVS
: Oil & Gas
: Vu Tran
Tags: Block B 1Q23 update Offshore windfarm
- PVS announced 1Q2023 results with revenue of VND 3,705 bn and NPATMI of VND 214 bn. Although gross margin increased, G&A expenses were higher and there were no other profits, making the bottom line almost flat compared to the same period last year.
- PVS has been awarded lot of EPC contracts for offshore wind power segment. Recently, the company has announced new contract for the design, manufacturing, and commissioning of offshore substations for the Baltica 2 with an estimated value of USD180 mn. Previously, PVS announced 33 suction bucket jacket (SBJ) foundations contract with a value of more than USD300 mn.
- Not only EPC offshore wind contract, the market is expecting huge Block B backlog for PVS and the share price has increased strongly recently, reflecting the this high expectation. However, the project also missed the FID deadline so many times before. the Golden Camel project (the package value is smaller than Block B) is also another potential project that can contribute to the backlog for PVS. However, PVS is bidding for many large projects and has limited construction capacity. Therefore, the company must also consider the potential projects to add to its backlog.
- Despite consecutively winning many recent projects, the falling point of PVS's profit will be in 2024 with the NPATMI of VND 1,026 bn (+29.2%), equivalent to P/E 2024 of 17.1x. In case of winning Block B, CAGR of net profit will be 14.5% and P/E seems to be attractive. But excluding this project, 2024-2026 P/E is fair. With the conservative view, we have not count the Block B in our forecast and recommend NEUTRAL to PVS at the current market price.
SCS – Profit declining rate to slow from Q2-2023
19-06-2023
: SCS
: Aviation
: Tung Do
Tags: quarterly result preview air cargo
- SCS decreased the 2023 business plan for Revenue and PBT by 9% and 10% respectively compared to the previous preliminary plan in March. The final plan for revenue and PBT in 2023 are VND 780 billion (-8% YoY) and VND560 billion (-20% YoY) respectively.
- For Q2-2023, we forecast revenue vs NPAT to reach VND 175 billion (-15% YoY) and VND 125 billion (-18% YoY), mainly due to weak import-export cargo volume, forecasted to reach 34 thousand tons (-23% YoY).
- We maintain our forecast for 2023, in which revenue is VND 740 billion (-13% YoY) and NPAT is VND 525 billion (-19% YoY). 2023F EPS is VND 5,125.
- We maintain the target price for SCS at VND 69,300/share, recommending ACCUMULATE, based on the P/E valuation method (P/E target of 13x@ 2023F EPS) and DCF (Ke: 11.2% and g: 1.3%). At the closing price on June 19, 2023, SCS is trading at a P/E 2023F of 13.4x.
NTC’s 2023 AGM: THE GROWTH ENGINE RETURNED
16-06-2023
: NTC
: Industrial Land RE
: Hung Le
Tags:
- The critical bottleneck at NTU-3 has been solved. With the investment and business operation of NTU3 in the coming time, it will create a growth engine as well as add value to NTC enterprise value owing to (1) favorable location and (2) scarce supply in nearby area. Regarding the sales, we estimate that the project could bring a total of VND 9,099 billion (USD 386.7 million) from signed contracts in 8 years from 2024. The NPV of the project as of the beginning of 2023 is VND 3,096 billion (USD 131.5 million) or contribute value per share is ~VND 129,000.
- In 2023, NTC plans to lease 90 hectares, combining with the current recurring incomes from IP services, RBFs (ready built factories) leasing and financial assets could bring VND 813 billion (USD34.4 million) revenue and VND 284 billion (USD 12 million) NPAT. However, we conservatively expect NTC’s performance to be the same as the previous year with the estimated total revenue of ~ VND 389 billion (USD 16.5 million, -9% YoY) and VND 232 billion (USD 9.8 million, -10% YoY) of NPAT, respectively.
- In addition, the company plans to disburse VND 235 billion (USD 9 million) to its associate investments related to new IP projects in Binh Phuoc including Nam Dong Phu Extension Industrial Park (480ha) and Minh Hung 3 Extension Industrial Park (577.53ha).
- We saw a positive outlook for the long-term horizon in NTC due to its new growth engine, NTU-3 project, and its investment portfolio. All of them are recorded at the historical cost, which does not reflect the real accumulated earnings from these investments, as well as fair value for the stable dividend during the current years. In addition, some of these are exposed to the new industrial park projects, which could add additional value to NTC’s investment portfolio. Besides, a healthy balance sheet will help NTC maintain an annual cash dividend of at least 6,000 VND/share for the coming year.
Update on trade in 5M2023
15-06-2023
: VDS
: Macroeconomics
: Ha My Tran
Tags: Trade
- Export continued to be sluggish in May 2023.
- The Asian market demand is decreasing.
- Prospects for the export market in the second half of 2023.
Banking sector – Credit demand is expected to gradually recover from the last months of 2023 onwards
14-06-2023
: VCB, MBB
: Banking
: Thao Nguyen
Tags: 1Q23 results update 2H23 outlook
- In 1Q23, a widespread downturn in bottom-line growth was witnessed amongst most industry players, as sector earnings growth recorded a negative level of -3% YoY (or +5% YoY, if excluding VPB’s one-off upfront fee in 1Q22). Among tiers, State-owned group observed the most optimistic results, with an average 18.9% YoY growth boosted by BID’s impressive figure of 53%, whereas the remaining three tiers all experienced marginal or even adverse improvement.
- Deteriorating asset quality with escalating bad debt formation. Non-performing loans of the banking sector have been accelerating for the third consecutive quarter. However, there was also a divergence between bank groups as state-owned banks have seen diminishing signals in NPL formation whereas the deteriorations of private commercial banks’ asset quality have not ceased.
- The banking sector’s credit growth in 1Q23 reached 2.06% YTD, comparatively lower than the same period last year (5.97%) due to weak credit demand amid challenging business conditions and a gloomy real estate market. We anticipate credit demand to gradually recover from the last months of 2023 onwards, backed by the expected turnaround of the export-import sector and brighter signals on the real estate market from 4Q23.
- Banking stock prices have rebounded during the last six months, yet valuation is still below the 5-year average. We foresee this is an attractive valuation for long-term investors to accumulate banking stocks.
Update on Gold
13-06-2023
: VDS
: Macroeconomics
: Bernard Lapointe
Tags: gold
- Central banks worldwide have been increasing their gold purchases in recent years.
- This has pushed the price above USD 2000 per ounce early this year (Figure 1).
FMC – Shrimp export value may bottom out in Q2/2023
13-06-2023
: FMC
: Fishery
: Loan Nguyen
Tags: Shrimp Monthly update
- In the first five months of 2023, FMC's shrimp exports reached USD 68 million, down 29% YoY.
- In Q2-FY2023, we forecast that FMC will achieve revenue and NPAT of VND 908 bn (or USD 40 mn, -10% QoQ, -36% YoY) and VND 77 bn (or USD 3.3 mn, - 32% YoY, +77% QoQ), respectively. While Q2/2023 results are continuing to decline sharply YoY, the improvement QoQ is mainly due to seasonality.
- Overall, we believe that Q2/2023 will mark the lowest point for FMC's export sales. Considering the potential recovery in the second half of 2023 and the promising long-term growth prospects, we view FMC as a viable investment option for the latter part of the year. The target price for FMC is currently being updated.
Update on Gold
13-06-2023
: VDS
: Macroeconomics
: Bernard Lapointe
Tags: gold
- Central banks worldwide have been increasing their gold purchases in recent years.
- This has pushed the price above USD 2000 per ounce early this year (Figure 1).
HPG - Market absorption will stay weak in the short and medium term
12-06-2023
: HPG
: Materials
: Trinh Nguyen
Tags: HPG
- May sales volumes improved month-on-month, but overall recovery pace remains sluggish.
- Steel market does not provide favorable conditions for results to improve in the medium term
STK – A recovery on the horizon
09-06-2023
: STK
: Textile & Garment
: Hoai Trinh
Tags:
- 2Q23 awaits a recovery. We expected STK’s performance to bottom out in 1Q23 and then recover through 2H23. As a yarn company, we expect STK to lead the rebound as demand picks up in 2H23. We expect STK’s 2Q23 net revenue and NPAT to reach VND 420 bn/USD17.8 mn (+46% QoQ, -20% YoY compared to a high base 1Q22), and VND 33bn/USD 1.4 mn (21x QoQ, -50% YoY), respectively.
- Retain ACCUMULATE; we lift our TP to VND 32,800/share (from 32,500/share). We cut our 2023 earnings forecasts by 39% largely reflecting weak 1H23 results. We roll forward our PEx valuation base to 2023-2024 (from 2023). Accordingly, we raise our TP to VND 32,800/share, implying a 17% upside, based on the closing price of Jun 9th, 2023.
Fed’s Rate Cut and Its Impact on the US Stock Market: A Historical Look
08-06-2023
: VDS
: Macroeconomics
: Tung Do
Tags:
- Since the Fed returned to targeting the Fed funds rate range approach to implement monetary policy in 1982, nine series of rate cuts were conducted.
- During those periods of rates cuts, the US equity market performance varied from time to time and largely depended on the context of the US economy and market expectations at that time.
- US stocks tend to perform well to a pause period and a “mid-cycle adjustment” following interest rate hike cycle.
DBD – Results in Q1-FY23 impressive while maintaining double-digit growth rate
07-06-2023
: DBD
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags:
- Results in Q1-FY23, revenue and PBT of DBD were VND 382 billion (+7% YoY and -18% QoQ) and VND 84 billion (+33% YoY and -9% QoQ), respectively, completing 21% and 28% of the plan for 2023, comleting 22% and 24% of our forecast for 2023. Revenue of ETC and OTC channels were VND 209 billion (+35% YoY and -28% QoQ) and VNd 156 billion (+0% YoY and +2% QoQ) respectively.
- For 2023F, we maintain the forecast that revenue and NPAT are VND 1,725 billion (+12% YoY) and VND 292 billion (+20% YoY) respectively, of which ETC and OTC channel revenue are VND 947 billion (+11% YoY) and VND 649 billion (+12% YoY) respectively, EPS for 2023 is VND 3,894 (+20% YoY). We changed the BUY recommendation to ACCUMULATE DBD with a target price of VND 52,600/share due to the current upside level being narrowed after the previous bull run. The P/E forward valuation is 11.5x lower than the average P/E of 5Y by 28%.
20-06-2023
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