ASEAN Equity Markets
30-11-2021
30-11-2021:
: Macroeconomics
: Bernard Lapointe
Tags:
- Equity markets in ASEAN, except for Vietnam, have not done well versus developed markets.
- Energy prices are a drag on most emerging economies.
- Private equity deals. Much more in developed economies than in emerging markets.
23 Is inflation a risk for economic recovery?
29-11-2021
:
: Macroeconomics
: Ha My
Tags:
- Inflation is running hot globally.
- Transitory vs. Persistent inflation.
- What is happening with Vietnam’s inflation right now?
HCMC’s residential real estate market: Plummeted in Q3 but market is likely to recover.
26-11-2021
:
: Real Estate
: Tran Hoang The Kiet
Tags:
- HCMC's condo market in Q3 2021 was hit hard amid strict lockdown caused by the escalation of Covid-19 given the significant drop of both supply (-60% YoY) and sold units (-68% YoY). The average primary price still rallied backed by the supply shortage. On the positive side, the absorption rate was still over 80% even with online sales (c. Moonlight Centre Point in Binh Tan).
- We expect the market to recover from Q4 2021 and will be better in 2022 with new launches from the resumption of offline sale events given the high vaccination rate (over 85% in HCMC) and the fact that large developers have delayed their projects to 2022.
- New launches in 2021-2022 are mainly attributed by Thu Duc City and Binh Chanh regions. The accelerated of nearby infrastructure projects will drive Thu Duc City market momentum while the “turning pages” story heat up the Binh Chanh region.
Steel industry update – Strong recovery in the domestic market
25-11-2021
:
: Materials
: Tu Pham
Tags:
- Total steel consumption grew strongly in 10M2021, mainly driven by high export volume in both coated and construction steel.
- Domestic consumption has recovered in October in major segments after the easing of social distancing measures in the South.
- Construction steel selling volume rose in October driven by both high growth in exports and domestic sales. Producers sold roughly 1.2 million tons, increasing by roughly 60% YoY.
- Recovery in the domestic market boosted steel pipe sales and supported coated steel consumption to remain at a high level.
DPM – Urea price will be the main factor to follow
24-11-2021
: DPM
: Fertilizer, Chemicals
: Vu Tran
Tags:
- Revenue and NPAT-MI reached VND 2,824 bn (USD125.5 mn) (+44.4% YoY) and VND 630 bn (USD28 mn) (+145.1% YoY) respectively in Q3/2021 due to favorable movements of selling prices of urea products.
- Urea's gross profit margin reached 44.0% in 3Q2021 compared to 36.0% in 2Q2021 and 28.4% in 3Q2020.
- Urea price factor will need close attention to when DPM stock price has been led by a strong increase in urea price recently. In addition, the gas tariff is also an unknown factor as DPM has not fixed the gas price contract with PVGas for the FY 2021. GAS is temporarily charging DPM a tariff of 1.9 USD/MMBTU.
- Business activities are expected to continue to be favorable in 4Q2021 following the increase in selling price of urea. So we believe that the stock price can reach to VND53,100 per share at the end of 2021 to factor the impressive 4Q result. However, the profit of 2022 is forecasted to decrease when there is no longer an abnormal profit and the urea price is unlikely to be as high as in 2021. So the investor should consider it because the stock is likely to drop to price in the decreasing bottom line event in 2022.
- DPM is being traded at 2021 PE forward of 6.2x and 2022 PE forward of 14.1x.
TNG: Strong revenue growth is expected in 2022 driven by real estate
23-11-2021
: TNG
:
: Loan Nguyen
Tags:
|
MWG – TGDD & DMX thrived post-lockdown, but BHX’s sales per store dropped
22-11-2021
:
: Retailing
: Tung Do
Tags:
- Social distancing caused a divergent in key chains’ SSSG: TGDD & DMX stores posted a SSSG of -36% while BHX chain thrived with a SSSG of +33% in Q3-2021.Higher contribution of DMX Super mini (DMS) lifted blended GPM of TGDD & DMX to 23% (+1.5 pps YoY), whereas effort to increase fresh food supply in the time of social distancing propped BHX’s GPM after wastage up to more than 28%.
- After the lockdown relaxation in October, consumer electronics chains’ revenue jumped to more than VND10 trillion on the back of pent-up demand and promotion campaigns, but BHX’s revenue declined to around VND2 trillion due to impacted demand following repatriation of consumers and wet market reopening. As a result, BHX is likely to incur losses in Q4-2021 after a profitable Q3-2021.
- We revise 2021F NPAT upward by 12% to VND4.7 trillion (+20% YoY) to reflect system-wide profit margins expansion. On the back of SSSG recovery for TGDD & DMX and enhanced profitability of BHX, 2022F Revenue/NPAT are projected at VND150 trillion (+26% YoY)/VND6.8 trillion (+45% YoY). As a results, we revise the TP by +10% from the last report to 163,500, implying a total expected return of 19% as of Nov 22nd, 2021.
Energy transition: soaring metal prices are an issue
19-11-2021
:
: Macroeconomics
: Bernard Lapointe
Tags:
- Transition towards greater use of green energy will push prices of some metals higher.
- Commodity producing countries could benefit from that.
- A substantial expansion of mining for metals could have negative effects on the environment.
PHR – Resilient long-term outlook and better-than-expected 9M2021 result
19-11-2021
:
: Chemicals, Chemicals, Real Estate, Industrials, Industrials, Real Estate
: Tam Pham
Tags:
- Q3 revenue grew 16% QoQ to VND 522 bn while NPAT-MI surged 90% QoQ to VND 145 bn, supported mostly by revenue from industrial park (IP) leasing, versus no revenue from IP in Q2.
- 9M2021 revenue posted VND 1,253 bn (+44% YoY) and NPAT-MI VND 305 bn (-57% YoY). Revenue growth came from main business segments, including rubber and IP. The plummet in the bottom line was the result of no compensation payment for land use right conversion, versus VND 456 bn compensation payment received in 9M2020 for Nam Tan Uyen 2 Expansion project (NTC3).
- Land use right compensation of VSIP 3 is likely to be received in Q2/2022.
- Given the actual result of the IP segment better than our expectation, we change our forecast for revenue and NPAT-MI of 2021 to VND 2,161 bn (+32% YoY) and VND 487 bn (-55% YoY). The 2022 forecast has also been adjusted down in revenue (VND 2,226 bn, +3%YoY) and NPAT-MI (VND 1,190 bn, +144% YoY) as we think the profit margin of the rubber segment will contract due to higher input prices and Tan Lap 1 IP will be open for leasing later than our old forecast. EPS for 2021 and 2022 are VND 2,937/share and VND 7,173/share, equivalent to P/E forward 2021 and 2022 of 25x and 10x, based on the closing price of Nov 19, 2021, while TTM P/E is 15x.
- We raise our target price for PHR from VND 61,300/share to VND 74,000/share to reflect the better-than-expected result of the IP segment as well as the rubber segment. Together with an expected cash dividend of VND 1,500/share in the next 12 months, this translates to an upside of 2%, equivalent to a NEUTRAL recommendation. <
Do we overlook the thermal group?
18-11-2021
:
: Utilities
: Nguyen Ngoc Thao
Tags:
- Earnings from the thermal group in 9M2021 were generally low due to difficulties in the industry. Results from most thermal companies experienced a decline in PBT except for POW, PGV and QTP.
- The turnaround story for the thermal group is expected to happen in 2022 based on higher probability of El Nino. Hence, earnings in 2022 are forecasted to grow to normal levels.
- Dividends from thermal companies are attractive.
CTG – Continued pressure in the short-term
17-11-2021
:
:
: Thanh Nguyen Ngoc
Tags:
- CTG reported resilient income but moderate earnings growth due to major pressure from provisions.
- We revise down earnings estimates for the 2021-2022 period. 2021 NII was revised down by -2% to price in the scale of ongoing supportive interest rate package, while that of 2022 is maintained thanks to higher projected credit growth and lower yield of newly issued bonds. The forecasted 2021-2022 NFIs are shifted down by -4% as we think the bancassurance model is vulnerable to disruptions. The credit cost margin curve is conservatively revised upward to price in the pandemic’s impact, the lag of NPL formation and the uncertainty of the recovery. 2021-2022 PBTs are forecasted at VND 20.5 tn (USD 891 mn, +20% YoY) and VND 23.8 tn (USD 1.0 bn, +16% YoY), down -15% and -13% from our prior projections respectively.
- The volatility in earnings come from the sensitivity to credit cost margin. This might lead to a large discount on valuation multiple depending on the business cycle. The revised 2021-2022 book value per share figures are VND 20,327 and VND 22,645 respectively. We adjust downward the 1-year target price by -1% to VND 39,900/share and maintain a BUY recommendation. This translates to an upside of 24% from the closing price of November 17 2021.
Strong external demand but headwinds remained
16-11-2021
:
: Macroeconomics
: Ha My
Tags:
- Trade surplus in Oct was the highest since Jan.
- Strong rebound of domestic sector’s exports.
- Strong external demand but headwinds remained.
