MWG - Q4 2021 AM: TGDD & ĐMX ready for positive 2022 plan with potential initiatives while BHX will try to increase sales per store will at the expense of lower profit margins
24-02-2022
24-02-2022: MWG
: Retailing
: Tung Do
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- While upbeat Q4-2021 results of TGDD & DMX, primarily led by solid demand of ICT products post lockdown, lifted full-year blended SSSG to below 1%, BHX saw its monthly sales per store dropping to the under VND 1bn in Q4-2021 following weakened purchasing power dragged the chain’s SSSG down to 2%.
- Strong results from key mature chains led the Group’s revenue and NPAT growth to 13% YoY and 25% YoY, respectively, fulfilling 103% of forecasted revenue and 104% of forecasted NPAT.
- While the plan for 2022 of the TGDD & DMX chains is rather in line with recent updates, the initiatives of BHX to re-engage customer traffic are likely to cause profit margins to be worse than our previous expectations. Our current 2022F revenue and NPAT forecast for MWG are VND 150 trillion and VND 6,800 billion respectively, compared to MWG's guidance for revenue and NPAT of VND 140 trillion and VND 6,350 billion respectively. Current forecasts and TP of VND163,500 are under review.
19 Highlights of the industrial real estate market in 2022
23-02-2022
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: Real Estate
: Hoang Minh Thang
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- We expect FDI inflows to continue to grow in 2022, thanks to the RCEP FTA which officially came into effect on January 1st, 2022. In the long run, Vietnam will continue to attract FDI inflows thanks to macro advantages such as competitive labor costs, low production costs, and high GDP growth.
- Lease prices of industrial parks (IP) in areas neighboring HCM City and Ha Noi economic centers have increased in Q4-21 due to the lack of IP land supply in the above centers.
- Infrastructure investment focusing on the North-South expressway will increase interregional connectivity, shorten travel time between provinces and cities, catapult occupancy rates as well as lease price growth for industrial parks.
VHC – Pangasius selling prices hit new high
22-02-2022
: VHC
: Fishery
: Loan Nguyen
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Is the inflation issue over?
21-02-2022
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: Macroeconomics
: Bernard Lapointe
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- Europe’s inflation is running at just over 5% y/y.
PGI – High profit growth will not be maintained in 2022
21-02-2022
: PGI
: Insurance
: Tam Pham
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- 2021 gross written premium fell because of the pandemic. PAT surged 100% YoY to VND 352 bn (USD 15.3 mn) owing to low compensation payment and a sharp drop of health insurance sales, the product that has the highest expense ratio. Combined ratio declined, meaning the insurance business is more profitable than last year. However, we do not expect that to maintain in 2022, as total sales will recover following the economic recovery and health insurance sales will rise on the low base of 2021.
- For 2022, gross written premiums and PAT are forecasted to be VND 3,767 (USD 164 mn, +12.6% YoY) and VND 251 bn (USD 11 mn, -28% YoY) on the basis of higher combined ratio and the slight picking up of deposit rate. Equivalent EPS and book value per share for 2022 are VND 2,800/share and VND 22,400/share.
- For 2023, we see more growth opportunities for PAT given the recovery of deposit rate and the compensation to be normalized. Thereby, we expect a growth of 19% in PAT, higher than the growth of 11.7% in gross written premium. Equivalent EPS and book value per share for 2023 are VND 3,611/share and VND 24,500/share.
- Forward PBRs for 2022 and 2023 are 1.4x and 1.2x, approximate the average PBR of 1.3x of the last three years. We maintain our target price of VND 31,000/share. This translates to a NEUTRAL recommendation based on the closing price of February 21, 2022 and an expected cash dividend of VND 500/share within the next 12 months. Market price has risen in the short-term since the positive results of Q3 and Q4 were announced but the 2022 performance is not attractive for a higher valuation.
GMD – Better-Than-Expected 2021 Business Results
18-02-2022
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: Seaports, Logistics
: Thu Anh Tran
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- In 4Q/2021, revenue reached VND 1,038 billion, +47% YoY, NPATMI reached VND 190 billion, +226% YoY. Thereby, for 2021, revenue/NPATMI reached VND 3,206 billion (+23% YoY)/605 billion (+63% YoY). Both were 20% higher than our forecasts thanks to solid growth in port operation, high profits from associates and costs tightening scheme.
- Import-Export turnover recovery upon economies reopening, coupled with the competitive advantage of location and demand guaranteed by strategic partner CMA-CGM, will be supportive the growth of throughput at GML terminal. We expect GML’s throughput to reach 1,560 TUEs (+95 % YoY) for 2022F, fulfilling phase I capacity. More capacity to be added with the construction for the second phase in mid-2022. Projected net profit for GML comes at VND 343 billion, significantly underpinning GMD’s profit from JVs to grow by 114% YoY.
- Port operation of GMD’s Hai Phong terminals will continue to grow as Nam Dinh Vu terminal attracts new services. The start of Nam Dinh Vu phase II on December 28th 2021 will create more growth potential for Nam Dinh Vu when Nam Hai and Nam Hai Dinh Vu terminals are already operating at full capacity. We expect the throughput at GMD’s Hai Phong terminals to reach 1.2 Mn TEUs (+16.6% YoY) in 2022F.
- Current 2022 forecasts, revenue of VND 3,214 Bn (+0.3% YoY) and PBT of VND 996 Bn (+ 23.6 % YoY), and target price of VND 55,700 are under review.
VCB – Beating expectations, preparing for the private placement
17-02-2022
: VCB
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: Thanh Nguyen Ngoc
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- 4Q21 earnings beat our forecasts by 11% (VND 8.1 trillion versus VND 7.3 trillion in PBT) due to extensive cost reduction. Total operating income was somewhat up to expectations with a 1% deviation, while provisions were higher than our projections given the deterioration of a interbank loan. For the whole year, VCB reported VND 27,372 bn (USD 1.2 bn, 19% YoY) in PBT, exceeding our estimates by 3%.
- We revise up our 2022-2023 projections as a result of the better-than-expected figures. We make major changes in the forecasts of CASA, funding costs, deposit growth, credit costs and service income. Ultimately, 2022-2023 PBT is revised up by 11% and 1% to VND 36,758 bn (USD 1.6 bn, 34% YoY) and VND 41,035 bn (USD 1.8 bn, 12% YoY), respectively.
- We factor in the private placement deal in 2022 with conservative inputs. We come up with a new forward 2022 book value per share at VND 39,709. The target price is revised up by 23%, at VND 112,800/share as a result of the private placement to foreign investors and robust earnings growth in the base case. This is equivalent to a BUY recommendation and an upside of 29% from the closing price of February 17, 2022.
REE – One-off earnings boosted the business results in 4Q2021
16-02-2022
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: Utilities
: Nguyen Ngoc Thao
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- In 4Q2021, revenue/ NPAT grew by 14% YoY/ 22% YoY to VND 1,898 bn (or USD 83 mn)/ VND 792 bn (or USD 34 mn). This is a record-high thanks to one-off earnings in the real estate segment and the contribution from the power segment.
- For the year 2021, NPAT reached VND 1.854 bn (or USD 81 bn), +14% YoY. In which, the power segment increased by 25% while other segments decreased.
- We reiterate our BUY recommendation on REE with a TP of VND 84,300, an implied return in the next 12 months of 23% as of Feb 15th, 2022.
Starting the year well with strong growth in exports
15-02-2022
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: Macroeconomics
: Ha My
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- Trade surplus continued at the start of 2022.
- Non-electronic domestic exports took the lead in Jan 2022.
- Imports of consumer goods contracted for the first time in 11 months.
- Escalating external risks might act as drags on the exports outlook.
FPT – 2021 Results Showed Solid Performance in Every Core Business Pillars
14-02-2022
: FPT
: Retailing
: Tung Do
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- 2021 revenue and PBT respectively posted VND 35.7 trillion (+19.5% YoY) and VND 6.3 trillion (+20.4% YoY), accomplishing 100% and 97% of our full-year forecast.
- Tech sector revenue grew by 23% YoY to VND 20.7 trillion, while PBT jumped by 25% YoY to VND 2.8 trillion. In which, global IT services recorded a jump of +21%YoY/+23% YoY in Revenue/PBT, largely fueled by robust DX demand (+72% YoY in revenue) and US market (+52% YoY in revenue). At the same time, domestic IT services PBT’s growth rate increased by 29% YoY/34% YoY in Revenue/PBT, slightly decelerated compared to 9M 2021 figures, driven by large contracts with corporates in Banking, Real estate, Manufacturing and Government sectors. Additionally, IT services segment experienced a record high in signed revenue in 2021.
- FPT shared guidance for 2022 with revenue/PBT jumping by 19% YoY/20% YoY vs our current forecasts for 2022F: revenue/PBT of VND 44 trillion (+23% YoY)/VND 8.2 trillion (+29% YoY). Current TP of of VND 118,400 are under review.
PDR – Astral City project is the main pillar for high growth in 2022
11-02-2022
: PDR
: Real Estate
: Tran Hoang The Kiet
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- From our view, the residential real estate is still a key pillar for PDR during 2021 – 2023 with projects in Binh Duong, Ba Ria – Vung Tau, Binh Dinh. The expansion plan into Industrials Parks, Logistics is longer term. We will need to observe for evaluation from further progress in upcoming times. Therefore, we recommend to OBSERVE the stock.
PVD - 4Q2021 result update
10-02-2022
: PVD
:
: Vu Tran
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- Revenue to reach VND 1,334 bn in 4Q2021, up 61.9% YoY. The drilling segment was the main growth driver with revenue of VND720 bn, up 65.7% YoY.
- Gross profit margin to improve to 10.2% (in Q4/2021) from 4.4% (in 4Q2020), pushing gross profit up 3.8x.
- Joint venture profits and other profits both decreased. So, 4Q2021 PBT was only VND54 bn, up 3.8% YoY.
- In 2022, PVD's ring utilization rate is forecasted to be better, which will improve its core profit. However, the current valuation is not very attractive in our opinion. We still maintain our recommendation to SELL PVD stock with a target price of 19,900 VND/share.
- For 2022, we forecast that total revenue and NPATMI will reach VND5,905 bn, up 37.1% YoY and VND179 bn, up 229.4% YoY, respectively. In long term, we expect that the kicking off major projects like Block B will be the main catalyst for PVD, then improving the PVD’s valuation.
