PGV – Await to finish the equitization settlement
21-06-2022
21-06-2022: PGV
: Utilities
: Nguyen Ngoc Thao
Tags:
- AGM approved the 2022 financial guidance, which targeted revenue and NPAT to be VND 45,417 bn (or USD 1,974 mn, +22% YoY) and VND 1,827 bn (or USD 79 mn, -40% YoY), respectively. A growth of 10% in volume would drive the company’s revenue. Hence, the company’s core earnings are forecasted to increase yet financial expenses are going to eat part of it, resulting in a fall in NPAT.
- Holding a well-diversified electricity portfolio including coal thermal, gas turbine, hydropower plants and solar power, the company’s core earnings are quite stable. However, its NPAT is sensitive to the FX rate due to high leverage. We have to closely monitor the FX rate to forecast its NPAT-MI. Fortunately, the company is able to book FX revert revenue in the future, which becomes the potential earnings in the following years.
- Currently, free float is relatively low, and forward P/E ratios are relatively fair (equivalent to 12.x). Investors can accumulate this stock to enjoy dividends as the dividend yield is roughly at 4%.
25 Downtrend of palm oil price in 2H2022 supporting margins of edible oil producers
20-06-2022
:
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: An Nguyen
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- According to CGS CIMB the crude palm oil (CPO) price is expected to be in a downtrend in 2H2022 due to improved global palm oil supplies. The CPO price has decreased in the beginning of June 2022 after Indonesia resumed palm oil exports in the end of May. On 17th June 2022, the CPO price was MYR 5,454 per ton (-10.8% MoM; +59.3% YoY).
- We believe that Vietnam edible oil producers will have the opportunity to purchase raw palm oil at a lower price compared to the 1H2022 level. Accordingly, the profit margins of Vietnam edible oil producers will start to recover in 2H2022.
- According to Kantar Worldpanel, one of the most prominent consumption trends across edible the oil industry during 2021 in Vietnam is the increasing consumer interest in premium edible oil after the Covid-19 pandemic. The higher contribution from premium segment will help to boost sales of edible oil producers.
- In Vietnam, Kido Group is the parent of the three Vietnam leading cooking oil producers. As a result, we believe that KDC will capture the growing edible oil sales value.
Time to buy gold?
17-06-2022
:
: Macroeconomics
: Bernard Lapointe
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- Price on the Comex exchange hit a bottom at $1800 per ounce.
- As we expect the USD to weaken, it should be supportive for gold price.
Overview of intelligent transportation
17-06-2022
:
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: Cao Ngoc Quan
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- Wide application of technology in the field of intelligent transportation in the world and Vietnam.
- Accelerating the application of intelligent transportation systems in Vietnam.
- Synchronously building an intelligent transportation system at the key project of the North-South Expressway in the East.
Rising pressures on the dong’s stability
16-06-2022
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: Macroeconomics
: Ha My
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- The dong has depreciated about 1.7% ytd but is the least volatile compared to other currencies.
- A more hawkish Fed will keep USD at its record high for a while.
- The yuan’s depreciation is expected to ease in 2H22.
- Vietnam’s balance of payments faces turbulences in 2022.
- The dong to depreciate about 2.0-2.5% in 2022.
FMC – 5M2022 business results
15-06-2022
: FMC
: Fishery
: Loan Nguyen
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- In 5M 2022, Vietnam's shrimp exports reached USD 1.8 Bn, up 38% YoY. However, shrimp exports in May 2022 decreased slightly by 6% MoM due to a shortage of raw materials and cooling-down demand. VASEP forecasts that shrimp exports in 2Q 2022 are likely to slow down QoQ.
- FMC's 5M 2022 revenue recorded USD 100 Mn (~ VND 2,300 Bn, +33% YoY). We maintain our forecast for FMC's revenue and NPAT-MI at VND 6,551 Bn (+26% YoY) and VND 360 Bn (+35% YoY), respectively.
- FMC's long-term outlook is bolstered by expansion of both farming area and operating capacity. In 2022, two new factories will double capacity and a 40% increase in farming area will come into operation. In the period of 2022 - 2026, we forecast that FMC's revenue and NPAT-MI will achieve a CAGR of 12% and 21%, respectively. Our current target price remains unchanged at VND69,500/share, equivalent to a P/E 2022 of 12.6x with a 2022 EPS of VND5,536. We recommend to ACCUMULATE this stock with an expected return of 19% including 3% cash dividend yield.
VCB – Lasting revenue pressures and positive cost cuts in the first half
14-06-2022
: VCB
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: Thanh Nguyen Ngoc
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- VCB maintained its growth momentum in 1Q22 with moderate earnings results (15% YoY), driven by robust net interest income and net profit margin. Non-interest income was impacted by the bancassurance fee bonus, zero transaction fee package and high comparison base. Credit cost margin was a minor growth factor despite the reversals of provisions for interbank lending.
- We expect the provisioning level in the next quarter to be sustained and become the leading growth factor. NIM will be maintained from 1Q22 but still suffer from the high comparison base effect, putting tension on the net interest income growth despite the resiliency of credit expansion. Total operating income will be supported by the bancassurance segment. Earnings growth is projected to pick up strongly to 56% YoY, reaching VND 7.7 trillion.
- We maintain our positive view on the capital raising catalyst, while being neutral on the zero-dong bank deal. Given the weak sentiment towards the banking sector and the recent valuation multiple re-rating on a sector-wide basis, we revise down our target price by 14% to VND 96,900/share. This is equivalent to a BUY recommendation with an upside of 26% from the closing price of June 14th, 2022.
ACV – Domestic pax volume rapidly returned to near all-time high in May, boding well for a full recovery
13-06-2022
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: Logistics, Non-aviation Services, Aviation
: Tung Do
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- Longer consecutive holidays amid no travel restrictions have driven domestic air pax volume to near all-time high, reaching 8.5 mn in May 2022. Accumulated 5M-2022 domestic volume amounted to 31.4 mn pax, up by 23% YoY.
- Following a full international sky reopening in mid-March, international air pax volume started to pick up in Apr. Accumulated 5M-2022 international volume was more than 7.5x higher YoY, reaching 1.5mn pax.
- Civil aviation authority of Vietnam expects that air pax volume will recover to 70-80 mn pax in 2022 since all restrictions are lifted. In which, int’l pax and domestic pax could reach 10mn pax (24% pre-Covid level) and 60-70 mn pax (80%-94% pre-Covid level), respectively.
- We’re pending a comprehensive review on the current TP for ACV of VND 100,400 due to better-than-expected air passenger volume.
NT2 – AGM Update
10-06-2022
: NT2
: Utilities
: Nguyen Ngoc Thao
Tags:
- The AGM approved 2022 financial guidance, which targeted revenue and NPAT to be VND 8,128 bn (or USD 353.4 mn, +32% YoY) and VND 468 bn (or USD 20 mn, -12% YoY), respectively. Actual cash dividends for the year 2021 exceeded the 2021’s guideline by 10% to VND 1,650.
- Core earnings in 1H2022 are higher than expected thanks to an increase of mobilized volume and selling price. Revenue and NPAT in 2022 are forecasted to be VND 7,946 bn (or USD 326 mn, +29% YoY) and VND 650 bn ( or USD 28 mn, +22% YoY), respectively.
- In 2022 and 2023, NPAT is made up of FX reversal that will boost the company’s earnings. Holding prosperous cash flows from 2022, the company will utilize these to pay high dividends in the coming years.
- Our target price for this stock is VND 29,200, comprising of VND 650 of dividends in the next 12 months, offering an upside of 12% compared to the closing price as of June 10th , hence investors might accumulate this stock.
HSG – Dim export outlook in Q4
09-06-2022
: HSG
: Materials
: Tam Pham
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GMD – China reopening to bolster throughput from June
08-06-2022
: GMD
: Logistics
: Nguyen Ngoc Thao
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- GMD posted 1Q2022 revenue/NPATMI of VND 880 bn (USD 38 mn)/ VND 274 bn (USD 12 mn), +28% YoY/+86% YoY.
- While 1Q2022 throughput volume of Northern terminals and Binh Duong Port in the South grew by 14% YoY and 20% YoY, respectively, Apr and May should see volume cool down before recovering from June following China reopening.
- The expansions of Gemalink and Nam Dinh Vu construct a solid foundation for the long-term outlook.
- We raise our GMD’s target price to VND 65,700, offering an upside of 9% compared to the closing price as of Jun 8th,2022. Thanks to the bright prospect in the long run, we recommend ACCUMULATING this stock when the market has a deep correction.
SCS – April International Cargo Throughput Slightly Decreased MoM but Remained at A High Level
07-06-2022
: SCS
: Logistics, Non-aviation Services
: Tung Do
Tags:
- SCS's import-export cargo throughput in April decreased by 8% compared to the previous month to 15.7 thousand tons, but this level was still 4% higher than the same period last year.
- International throughput in May is likely to be under pressure before recovering in June due to the reopening in Shanghai.
- We expect international throughput in 2022F/23F to reach 201 thousand tons (+15% YoY) / 221 thousand tons (+10% YoY). Combined with the higher renewed freight handling tariffs, 2022F/23F NPAT is estimated at VND 694 billion (+23% YoY) / VND 812 billion (17% YoY), equivalent to an EPS in 2022F/23F of 12,312 VND/14,598 VND. We reiterate our ACCUMULATE recommendation for SCS with a target price (based on P/E multiple and DCF) of VND 188,200/share, implying P/E 2022F/23F of 15.3x/12.9x respectively.
