MSN – Higher-year ago level of income from JVs pushed the bottom-line up in 9M2022
28-12-2022
: MSN, MCH, MML, MSR
: Consumer Staples
: An Nguyen
Tags: MSN
- In Q3 2022, Masan Group (HSX: MSN) posted net
sales of VND19,523 bn (+9.5% QoQ; -17.3% YoY). The strong negative YoY growth
is due to the deconsolidation of the feed segment. In detail, Q3 2022
excluded-feed sales growth was –2.1% YoY, driven by lower revenue from WCM.
- We expect that 2022 core revenue of MSN will show a positive growth despite of rising inflation, supported by double-digit growth of MHT and modest growth of consumer segments (MCH, MML). However, we predict that 2022 bottom-line will decrease, in the pillar of, 1) rising agriculture commodity costs; and 2) higher SG&A expenses.
- Based on SoTP valuation, we evaluate MSN at VND101,400 per share. We recommend to ACCUMULATE on MSN shares with the
12-months total expected return of +9.5% compared to closing price of VND92,600
on Dec 27th 2022.
GMD – NOT ATTRACTIVE WHEN THE ROOM FOR GROWTH IS RESTRICTED
27-12-2022
: GMD
: Seaports
: Quan Cao
Tags: Seaports GMD
- GMD's main ports in Hai Phong and Cai Mep - Thi Vai areas maintain stable performance in the context that import and export growth is forecasted to be slow. The container throughput forecast for 2023F in Hai Phong and Gemalink (GML) is 1.2 million TEU (+4% YoY) and 1.4 million TEU (+13% YoY), respectively.
- In the long term, GMD has more room for growth thanks to the expansion of Nam Dinh Vu and GML. However, there will be many challenges ahead when the competition is getting fiercer in Hai Phong area and GML phase 2 is still in the process of applying for a construction permit.
- GMD is trading at a 2023F P/E valuation of 13.3x, 32% lower than 5Y average of 17.6x. The valuation has been strongly discounted, suitable for investors who prefer to hold in the medium and long term. We recommend ACCUMULATE GMD with a target price of VND 53,300 per share.
Update on monetary market in Dec 2022
26-12-2022
: VCB
: Macroeconomics
: Ha My Tran
Tags: Macroeconomics
- Credit growth for the whole year 2022 is estimated at 14%.
- The liquidity of the banking system is getting better.
- The liquidity of the banking system is expected to improve in 2023.
Retail industry – Short-term hiccups create golden investment opportunities
23-12-2022
: PNJ, MWG, FPT
: Retailing
: Loan Nguyen
Tags: Retailing
- The economic slowdown puts pressure on the retail industry.
- Non-uniform effects among modern retailers.
- Attractive valuation but timing is key.
SIP – Maintain steady growth momentum
22-12-2022
: SIP
: Industrial Land RE
: Le Tu Quoc Hung
Tags: SIP Industrial Real Estate Earnings updates
- In the 9M2022, SIP recorded revenue of VND 4,595 billion ($196mn), up 11% YoY and completing 88.3% of the year plan. Meanwhile, NPAT-MI reached VND 678 billion ($29mn), equivalent to the same period last year. Notably, the utility businesses had an impressive move, as the revenue reached VND 3,809 billion ($162mn or +15% YoY).
- In this update, we have more information to evaluate investment prospects for SIP, including (1) the abundant available GFA from current IPs, the new growth driver from Long Duc Phase 2, (2) the residential real estate segment still has a plenty of room to unlock the value, (3) earnings of utility businesses are becoming attractive and will grow following IP occupancy, and (4) Ready-built factory (RBFs) leasing development plan is potential and ambitious.
- We maintain our positive outlook for SIP due to the above investment prospects. In addition, a healthy balance sheet with a strong cash balance will support the annual cash dividend plan of VND 2,000/ share. In our base case for 2023, we estimate that SIP’s revenue in 2023 is roughly at VND 6,785 billion ($288mn) and VND 1,132 billion ($48mn) in NPAT.
VCB – Healthy growth prospects
21-12-2022
: VCB
: Banking
: Thao Nguyen
Tags: VCB
- PBT reached VND 7.6 tn in 3Q22 (+32% yoy), mainly coming from interest-earning assets expansion and NIM improvement. NII and TOI were recorded at VND 13.7 tn and 16.7 tn, respectively.
- The bank has utilized almost full credit growth quota granted of 9M22 to make up a 17.3% growth ytd. There has been a certain gap between credit and deposit of the overall system as deposit growth reached 5.4% ytd as of 3Q22. CASA ratio declined to 33.8% after peaking at the historical high of 34.5% in 2Q, yet remained a favorable figure.
- NPL ratio increased to 0.8% in 3Q22 while net NPL formation rate maintained a steady downward movement to reach a minor level due to the expiration of Circular 03 regarding the Covid-19 restructured loans. The coverage ratio stayed at the highest level among industry peers of 401.8%. In addition, VCB has shown a comparatively healthy growth prospect amid the recent turbulence on corporate bond and real estate market due to its stringent assets allocation policy.
- We revised our forecasts in 2022 and 2023 to factor in (1) the potential of a delayed private placement due to unfavorable market conditions and (2) High credit quota to net off the decline in NIM due to the support package. Altogether, TOI is forecasted to increase by roughly 9%, driven by an 9.5%%/12% growth of NII/NFI. The credit cost margin somewhat decreases thanks to top-tier provision buffer. As a result, PBT is forecasted to slightly rise by a single digit in 2023. The target price is revised down to VND 90,200/share due to the delay of the private placement and the decline of earnings in FY22 and FY23. As of Dec 21st, 2022, this stock offers an upside of 14%, hence, investors can ACCUMULATE this stock.
HSG – Expectation of a Margin Spring in 2H/FY22-23
20-12-2022
: HSG
: Materials
: Tam Pham
Tags: HSG
- Profits tumbled amid falling demand and high-priced materials in FY21-22. Gross profit margin slumped to 9.9%, versus 18.1% of the previous fiscal year. Revenue added 2% YoY to VND 49,711 bn but PAT-MI tumbled -94% YoY to VND 251 bn.
- Domestic sales to lead growth and margin recovery in FY22-23. Gross margin is expected to return to the positive territory from Q2 and recover better in 2H with more support from the returning demand in Western markets while competition with China and India relaxing. The whole-year gross margin could rise to 12.4%. Revenue and PAT-MI could reach VND 34,513 bn (-31% YoY) and VND 427 bn (+70% YoY).
- Applying three valuation methods including discounted FCFF, P/E and P/B, we arrive at a target price for HSG of VND 14,400/share, which is equivalent to an ACCUMULATE recommendation with an upside of 5%, based on the closing price of December 19th, 2022. The stock is currently trading at PER of 31.7 and PBR of 0.8. The EPS and BVPS for FY22-23 are VND 663/share and VND 18,021/share, or forward PER and PBR are 20.7 and 0.8, respectively.
NLG – The ability to complete the 2022 plan depends on many variables
19-12-2022
: NLG
: Real Estate
: Anh Tran
Tags:
- During the meeting of Nam Long Day, NLG set a plan to record positive revenue (VND3,327-4,441 bn). NPATMI (VND786-1086 bn) and pre-sales value in 4Q2022 (VND2,383 bn). However, we believe that the plan will not be able to achieve the target because the Can Tho project is in progress at the stage of waiting for land allocation approval , it is necessary to continue to fulfill financial obligations and build basic infrastructure in order to be eligible for the official sale. While Paragon Dai Phuoc Project is in the adjustment phase 1/500 to add documents to adjust the enterprise registration certificate (ERC). However, in the context that the Land Law has not been agreed, and many inspection activities are taking place in Dong Nai province, we believe that the project transfer can be extended to 2023.
- On this basis, we forecast revenue and NPATMI in 4Q2022 at VND1,693 bn (-62% yoy) and VND126 bn (-65% yoy). Equivalent to the estimated revenue and net income of parent shareholders for the whole year of 2022 at VND4,403 bn (-15% yoy) and VND245 bn (-77% yoy), EPS is estimated at VND 640 per share.
- In 2023, the BOD set an initial pre-sales target of over VND12,000 bn, which will be a big challenge as most of the new subdivisions opened for sale next year will focus on suburban areas and invest in the context of high interest rates.
- According to the construction progress, 2023 will be the drop-off point for the handover of projects. We estimate revenue and NPATMI at VND6,951 bn (+58% YoY) and VND1,013 bn (+314% YoY), respectively. In which, profit is mainly contributed from (1) VND350 bn from divestment of Paragon Dai Phuoc project and (2) handover of Mizuki-CC3, Southgate, Izumi-1A and land plots of Can Tho project.
- We maintain our HOLD recommendation for NLG stock with a target price of over 12 months, with a target price of VND 27,000/share, 11% lower than the closing price of December 17, 2022.
Weakening growth drivers, easing exchange rate pressures
16-12-2022
: VDS
: Macroeconomics
: Ha My
Tags: Exchange rate
- Manufacturing and retail in Nov are in line with our expectations.
- Trade turns into negative growth.
- The exchange rate reversed rapidly from the beginning of December.
HAX – Profit margin moving backing to normal levels
15-12-2022
: HAX
: Automobiles
: An Nguyen
Tags: Automobiltes Business result update HAX
- In Q3 2022, Haxaco posted net sales and net profit of VND1,970 bn (or USD77 mn; +27% QoQ; +178% YoY) and VND57 bn (or USD 2 mn; -29% QoQ), respectively. There are some negative signals from the Q3 2022 profit performace. Profits showed a negative quartely growth, equivalent to a lower profit margin compared to Q2 2022.
- In 9M2022, consolidated net revenue and NPAT were VND5,177 bn (or USD203 mn, +53% YoY) and VND192 bn (or USD8 mn, +583% YoY), respectively, exceeding their 2022 PBT target by 14%. Covid-19 pandemic boomed in 9M2021, significantly hurting the 2021 performance, but creating a low-base for 2022 strong growth.
- In the view of rising inflation, we predict that HAX ‘s 2023 revenue and net profit will reach VND7,172 bn (or USD281 mn, +6% YoY) and VND253 bn (or USD10 mn, -10% YoY), respectively. More than 70% of HAX ‘s clients buy cars on installment payments. Consequently, higher interest rates will partly discourage consumers taking loan to purchase luxury cars.
MSH – Gearing up for a bumpy ride
14-12-2022
: MSH
: Textile & Garment
: Hoai Trinh
Tags: MSH
- Cumulative 9M22 revenue climbed but GPM plummeted to the lowest level in over eight years despite revenue climbing. On a positive note, financial income surged 66% YoY, owing primarily to a 103% increase in net FX gain and a 49% increase in net interest income.
- For FY23, we expect net revenue and NPAT-MI to be VND 5,146 bn/ USD 218.8 mn (-3% YoY) and VND 361bn/USD 15.4 mn (+2% YoY), respectively. Our assumptions are that (1) lower order volume compared to 2022 levels, (2) material costs to ease, and (3) rising deposit interest rates might continue to benefit the company in 2023.
- We maintain an ACCUMUALTE rating while lowering the one-year target price to VND 40,000/share (from VND 48,200/share). The lower TP is primarily driven by downward FY23 earning revisions due to rising inflation risks affecting spending on discretionary items in exporting countries. We also lower our target P/E to 7.0x, below MSH’s historical average range since the stock listing owing to potantial risks from the rising discount rate. With an expected cash dividend of VND 2,500/share in the next 12 months, it implies a total return of 14%, based on the closing price of Dec 14 2022.
IMP – Low growth prospects make valuation not really attractive
13-12-2022
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: IMP
- In Q3-2022, IMP recorded net revenue and PBT of VND 418 billion (+63% YoY) and VND 72 billion (+89% YoY), respectively. Accumulated 9M2022, net revenue and PBT reached VND 1,087 billion (+25% YoY) and VND 197 billion (+27% YoY), completing 75% and 72% of the annual plan. Net revenue and PBT accumulated 9M2022 completed 70% and 71% of our forecast, respectively.
- IMP 4 factory will help IMP become the first domestic company to participate in competitive bidding with foreign manufacturing companies in bidding packages of Non - Betalactam antibiotics tiers 1&2. However, we forecast that revenue contribution from IMP 4 will only reach VND 83 billion, equivalent to 5% of the share of the ETC channel in 2023 due to the scale of Non-Betalactam antibiotics that IMP 4 is expected to produce is relatively small.
- Net revenue and NPAT in 2022F are VND 1,546 billion (+22% YoY) and VND 222 billion (+17.6% YoY), respectively. For 2023F, net revenue and NPAT will reach VND 1,675 billion (+8.3% YoY) and VND 240 billion (+7.8% YoY), respectively. The stock is being traded at a P/E 2023F valuation 13% lower than the 5Y average of 22.3x at 19.8x but still quite high considering the 5Y CAGR of NPAT at 7%.
- We recommend to ACCUMULATE IMP with a target price of VND 63,000 VND per share.
28-12-2022
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