FMC – 5M2022 business results
15-06-2022
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.
26 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
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- 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
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- 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.
BFC – 2022 is still good but not extend to 2023
06-06-2022
: BFC
: Fertilizer
: Vu Tran
Tags:
- After posting positive results in 2021, BFC announced another good earnings in 1Q2022 with growth of 46.8% and 19.3% in net revenue and NPATMI respectively.
- However, the revenue growth came from a higher ASP while sales volume fell 15.1% in 1Q2022. The gross margin stayed at 12%, compared to 12.6% in 1Q2021.
- BFC maintained huge inventories as in 4Q2021 to prevent the fluctuation in raw material as well as to ensure enough input for production.
- Revenue and NPATMI are forecasted to post VND9,759 bn (+26.6% YoY) and VND281 bn (+28.1% YoY) respectively. However, there will be no significant earnings growth from 2023 onwards except for the good cash dividend policy, which is a result of a favorable business operation in 2021-2022.
- The fair price of BFC is VND31,300. Combined with the cash dividend of VND2,000, we recommend to HOLD. At the current market price, the investor could receive at least 4,000 cash dividend till 2023, equivalent to a dividend yield of 11.9%.
CMX – Improving long-term growth prospects
03-06-2022
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: Fishery
: Loan Nguyen
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Industrial Park – Bright outlook for the long-term
02-06-2022
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: Real Estate
: Lam Nguyen
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- Vietnam's industrial park prospects are bright with two main segments to be focused including land leasing and ready-built factory.
- We expect land rental prices to keep increasing. Hence IP developers who own large clean land banks will benefit the most given their low COGS.
- Along with the development of e-commerce and the shift of large FDI enterprises into Vietnam, IP developers who tend to expand to the ready-built factory segment are worth to pay attention to.
- Following the correction of the stock market, stock prices of IP tickers have adjusted down from the peak set in the year, making them become more attractive for mid- and long-term investment. Our favorite stocks include PHR (TP: VND 74,400), LHG (TP: VND 62,300), and DPR (Not rated).
Banking sector – Rapidly rising exchange rate under constant pressure
01-06-2022
:
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: Thanh Nguyen Ngoc
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- Contrary to the situation at the beginning of the year when VND liquidity was low and VND interbank rate and VNDUSD swap rate gap were elevated, the current liquidity position is ample on the VND front. Instead, the tension on USD liquidity is intensified due to the Fed’s decision, our monetary policy and headwinds on the USD flow side.
- As a result, the exchange rate has rallied persistently since the Ukraine war started. The demand for USD was high even when exchange rates rose. The swap rate gap turned negative last week. The circumstance is expected to last until the supportive external factors come.
The Indo-Pacific Economic Framework for Prosperity (IPEF)
31-05-2022
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: Macroeconomics
: Bernard Lapointe
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- US President Biden announced the formation of the Indo-Pacific Economic Framework for Prosperity (IPEF) while travelling to Seoul and Tokyo the week of May 23-26.
- Two central banks in Asia have raised interest rates by 25 basis points lately: the Central Bank of the Philippines and the Bank of Korea. Both of them are extensively fighting domestic inflation that's occurring at the moment. In reality, both of them want to support their currencies.
