Vietnam’s monetary market volatilities
25-10-2022
: VDS
: Macroeconomics
: Ha My
Tags: Monetary market
- The dong depreciated by 4.1% from the beginning of October until now
- Is the pressure of devaluation of the dong subjective or objective?
- Liquidity in the system is still tight
- Exchange rate and interest rate outlook
STK – 3Q22 earnings results worse-than-expected; FX losses hurt bottom line
24-10-2022
: STK
: Textile & Garment
: Hoai Trinh
Tags: Business Update STK
- 3Q22 net revenue was VND 515 bn/ USD 20.7 mn (-3% QoQ, +10% YoY compared to 3Q21 low base). NPAT-MI just came at VND 50 bn/ USD 2 mn (-28%QoQ, -18%YoY), missing expectations, due to FX losses and direct customers’ weakening orders. Overall, STK has completed 65% of its net sales & NPAT targets for FY22.
- For 4Q22, we forecast net revenue and NPAT-MI of VND 520 bn/ USD 20.9 mn (+1%QoQ, -19% YoY) and VND 57 bn/ USD 2.3 mn (+14% QoQ, -25% YoY), respectively, as orders momentum decelerate, and a weak VND. For FY22, we expect STK’s net revenue and NPAT-MI to be VND 2,205 bn/ USD 90 mn (+8% YoY) and VND 252 bn/USD 10 mn (-9% YoY), respectively. The correspondent EPS is VND 3,086.
- We maintain a BUY recommendation with 8% lower one-year target price of VND 38,500/share (from VND 41,600/share). The lower TP is primarily driven by downward earning revisions. With an expected cash dividend of VND1,000/share in the next 12 months, this implies a total return of 27%, based on the closing price of Oct 24th, 2022.
Banking Bad Debt Prospect Seen from the Recent Changes in the Real Estate Sector
21-10-2022
: TCB, VCB, ACB, BID, MBB, LPB, HDB, TPB, VIB, OCB
: Banking
: Tam Pham
Tags:
- The real estate industry has enterred a period of strong adjustment, which will increase the risk of bad debt at banks with a high exposure of credit to the real estate sector, leading to a higher credit cost margin. However, the level of risk is different depending on the credit exposure of each bank to the real estate industry and the financial health of the real estate partners.
- Bad debt from Covid-related restructured debt will increase after Circular 14 expires, but most of the banks in the recommended list will not be affected.
- The ratio of bad debt in the coming time will continue to differentiate depending on the characteristics of each bank's customer base and the impact of the macro factors on customer groups. The K-shaped recovery pattern will continue.
Vietnam automobile sales are expected to keep growing in Q4 2022
20-10-2022
: HAX
: Automobiles
: An Nguyen
Tags: HAX
- According to VAMA, automobile sales reached 33,463 vehicles (+8.5% MoM; +147% YoY) in Sept-2022. The month-over-month growth, despite inflation hike, proves strong demand of private vehicles as well as development of logistic activities. These are positive signals for sales growth of automotive & spare parts companies.
- We predict that Vietnam automobile sales will keep growing in Q4 2022, fueled by various new models coming to markets. The global chip shortage problems is easing since Jun-2022, supporting global car producers to enhance their supply in Q4 2022. Consequently, Vietnam car distributors is expected to show strong sales growth in Q4 2022.
- However we think that sales might be negatively affected in 2H2023 as a result of the European energy shortages during the spring of 2023. The potential energy crunch risk might reduce global car supply, leading Vietnam distributors to struggle with low inventory in 2H2023.
HND – 3Q22 tiny profit despite depreciation extension
19-10-2022
: HND
: Power
: Hoai Trinh
Tags: HND
- HND reported its 3Q22 electricity sales volume to 1.57mn kWh (-3%QoQ, -8% YoY). Despite a slight decrease in electricity sales volume, the high contracted price (Pc) due to rising input material prices prevailed, resulting in net revenue of VND 3,070 bn/USD 126 mn (+40% YoY). Net income came at VND 41 bn/USD 1.7 mn (5.6 times higher YoY compared to a relatively low base in 3Q21).
- The company is experiencing short-term hiccups as a result of (1) rising coal prices, (2) FX losses due to USD/VND appreciation, and (3) unfavorable weather conditions for thermal plants. However, HND maintains a competitive advantage by operating two power plants with stable capacity, which is expected to have a high mobilization rate when the El Nino phase comes next year.
- We are maintaining our FY22 earnings forecast for sales of VND 10,946 bn/USD 450 mm (+21% YoY), and NPAT of VND 751bn/ USD 31 mn (+65% YoY). However, we lower our target price due to the future impact of rising input materials, coupled with La Nina which might persist longer than expected. Using 40%/30%/30% of FCFF, P/E and EV/EBITDA methodology, we arrive at a one-year target price of VND 20,500. With an expected cash dividend of VND 1000/share in the next 12 months, implying a total return of 42%, based on the closing price of Oct 19th, 2022. We have a BUY rating on HND.
KDH – Business results are forecasted to lack the growth drivers
18-10-2022
: KDH
: Real Estate
: Anh Tran
Tags: KDH Business Update
- Sales activity recorded a positive return at the end of 3Q22 with the new launch of The Classia project – phase 1, sales results recorded at a high level of 96%. According to the plan, the phase 2 is likely to open for sale in November. In addition, the high-rise projects of The Privia and The Clarita are also expected to launch in 2023. In addition, the projects of 11A - Phase 1 and the expanded Le Minh Xuan IP are also in the legal completion stage, we expect that these two projects will be open for sale in 2024.
- In 3Q22, Rong Viet estimates revenue and NPATMI to reach VND 952 billion (+30% QoQ and -21% YoY) and VND 409 billion (+26% QoQ and +29% YoY). In 2022, we forecast the revenue and NPATMI to be VND 2,779 billion, -26% YoY and VND 1,443 billion, +20% YoY, respectively, completing 70% and 103% of 2022 plan. EPS is estimated at VND 1,954/share.
- We maintain our BUY recommendation for KDH stock with a holding of more than 12 months. The adjusted target price of VND 37,300 per share, upside of +41% compared to the closing price of October 18, 2022 (6,360 VND lower than the target price in the report on October 4, 2022, due to an adjustment in the discount rate in line with the increasing trend of interest rates.
Update on Trade and Exchange Rate
17-10-2022
: VDS
: Macroeconomics
: Ha My
Tags: Trade
- Trade growth weakened sharply in September 2022.
- The low base effect will not persist in Q42022.
- The decline in the import of raw materials signals a weakness in exports.
- The dong will depreciate sharply in 4Q2022.
VSH – From loss to profit in 3Q2022
14-10-2022
: VSH
: Power
: Thao Nguyen
Tags: VSH
- In 2Q2022, VSH posted revenue and NPAT of VND 661 bn (or USD 27.5 mn, +33% YoY) and VND 257 bn (or USD 10.7 mn, +90% YoY) due to a growth of 5% YoY in volume and 26% YoY in ASP.
- In 3Q2022, generated volume reached roughly 620 mn kWh, +87% YoY and 13% QoQ. Meanwhile, selling price in CGM surged by 60%YoY in 3Q2022 on an average basis. Hence, earnings in 3Q2022 are forecasted to be grow moderately compared to that in 2Q2022.
- Large hydropower plants continue to enjoyi favorable conditions to reserve more water to produce electricity until 1H2023 as La Nina is forecasted to prevail in 2022 according to NOAA. The Thuong Kon Tum plant still has potential revision of contracted price (Pc) in the future that might be the catalyst in the long run.
- Currently, VSH is trading as 9.7x, relatively lower than that of the 5-year average. Meanwhile, earnings in 2H2022 are forecasted to be higher than that in 2021. As a result, as of Oct 14th, 2022, we foresee that 22F P/E is going to be lower than currently.
KBC – Has to wait further to see Trang Cat treasure
13-10-2022
: KBC
: Industrial Land RE
: Hung Le
Tags: KBC
- Nam Son Hap Linh, Tan Phu Trung and Trang Due urban project will be the main source of revenue for KBC in 2022. While, Trang Cat urban area project is likely to be delayed, along with Phuc Ninh urban area. Although the sales at Phuc Ninh urban is good, it can't be handed over due to unfinished obligation-related issues to book revenue this year.
- In the base scenario, total revenue and NPAT in 2022 are estimated to be at VND 2,985 billion or USD 125.4 million (-30.7% YoY) and VND 3,044 billion or USD 127.89 million (+288% YoY), completing 30.5% and 68% of the year plan, respectively. In which, revenue and NPAT in 2H2022 are estimated at VND 1,900 billion or USD 79.8 million (+6.2% YoY) and VND 2,929 billion or USD 123 million (1,939% YoY).
- Based on the sum-of-the-parts valuation (SOTP), we maintain our BUY recommendation and lower the target price to 33,400/share to (1) adjusting the discount rate to be more reasonable to the context of increasing interest rate pressure, (2) delaying the business progress in Trang Cat urban area due to the legal issues mentioned below. Based on closing price of stock on 10/12/2022, the total expected return will be +43.7%.
PNJ – 8M-2022 business results – Resilient demand to drive retail sales
12-10-2022
: PNJ
: Retailing
: Loan Nguyen
Tags: PNJ
- In Aug 2022, the company posted net revenue of VND 2,328 Bn (or USD 99 Mn, +14 times YoY) and NPAT of VND 79 Bn (or USD 3.4 Mn) compared to a loss of VND 79 Bn in Aug 2021. Accumulated 8M 2022, net revenue and NPAT at VND 23,049 Bn (or USD 1 Bn) and VND 1,246 Bn (or USD 53 Mn), soaring by 88% YoY and 99% YoY.
- For 2022, we forecast net revenue and NPAT to reach VND 32.0 trillion (or USD 1.3 Bn, +64% y/y) and VND 1.7 trillion (or USD 71 Mn, +67% y/y) respectively, 10.8% higher and 2.0% lower than our previous forecast, respectively, backed by (1) stronger-than-expected spending of MAC consumers on luxury goods and (2) the low base of PNJ’s retail sales in 2H2021 disrupted by COVID-19 lockdown from June to October 2021.
- Our new target price comes at VND136 000 per share, which is 5.5% lower than the previous valuation, implying an expected return of 32% on the closing price as of Oct 11th, 2022. We recommend BUYING this stock. At the current price, PNJ is trading at a 2022 P/E of 14.8x with a corresponding EPS of VND7 061/share.
TNH – Expected to build a new hospital with a total investment of nearly USD 30 million
11-10-2022
: TNH
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: TNH
- In the first half of 2022, revenue and NPAT reached VND 207 billion (+13% YoY) and VND 54 billion (+9% YoY), completing 48% and 36% of the annual plan, respectively. In 1H2022, the total number of visits to two hospitals reached about 200,000 and is expected to be about 400,000 by the end of the year. The number of health insurance cards registered for medical examination increased from about 30,000 in 2021 to 80,000 cards in 2022.
- TNH plans to build a new general hospital in Viet Yen district and two specialized eye and obstetric hospitals with a total investment of VND 618 billion, VND 165 billion and VND 330 billion, respectively. To balance capital, the company will focus its resources on building Viet Yen general hospital in 2023, it is expected that by October 2022, the company will be able to complete the construction permit for Viet Yen hospital and be able to operate from Q4/2023.
- Thai Nguyen International Hospital is located in a dense area but we find that the hospital has many strengths to attract people to medical examination and treatment: (1) modern and clean facilities, (2) services at private hospitals can save more time than at public hospitals, (3) people with health insurance will be entitled to 100% payment even if they are at the inappropriate hospital.
CMG - Preliminary 1H-2022 Results: Robust Results of Global Business Division Led the Growth
10-10-2022
: CMG
: Software, Technologies
: Tung Do
Tags: CMG
- 1H-2022 (from Apr 1st to Sep 30th) results: Net sales grew by 36% YoY to VND 3,918 Bn and PBT jumped by 23% YoY to VND 246 Bn.
- In terms of 1H-2022 sales by division, Global business division posted the strongest growth of 83% YoY, followed by Technology & Solutions division (+38% YoY) and Telecom division (+22% YoY).
- For 1H-2022 PBT by division, Telecom still contributed the most (57% of the Group’s PBT), but growth has decelerated to only 3% YoY, while Global business started to gained traction after 5Y of inception in terms of both PBT growth (89% YoY) and contribution (34% of the Group’s PBT).
- The company reveals the guidance for the 2H-2022 with expectation to exceed full year PBT target by 14%.
25-10-2022
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