Update on monetary market in Nov 2024

• Trump 2.0 and its impact on the USDVND exchange rate.
• Banking system liquidity becomes tight due to year-end capital needs

GEG – 2024 Earnings growth driven by wind power segment; lower interest expenses

• GEG posted Q3 2024 results as anticipated, with revenue reaching VND 1,770bn (+11% YoY; USD 70mn) but a net loss of VND 27bn (USD -1mn) due to a lower sales volume of wind farms. For 9M2024, GEG revenue of VND 1,770bn (+11% YoY; USD 70mn), while net profit reached VND 84bn (-3% YoY; USD 3mn).
• We expect GEG's Q4 2024 earnings to improve, supported by reduced financial expenses from debt restructuring. Accordingly, we forecast 2024F revenue of VND 2,349bn (+9% YoY; USD 93mn) and NPAT-MI of VND 199bn (+45% YoY; USD 8mn), which are driven by a full-year contribution of the Tan Phu Dong 1 power project and lower interest expenses. 2024F EPS is estimated at VND 441.
• For 2025, we expect growth to resume in 2025 due to: (1) a recovery in hydropower sales volume compared to 2024, and (2) debt restructuring. Additionally, there is potential for an one-off profit once GEG finalizes electricity tariff negotiations for the Tan Phu Dong 1 project.
• GEG's shares are currently trading at VND 10,800 per share (P/B 0.7x), reflecting a high discount and the negative outlook of power sector in general. We recommend an "Accumulate" rating for GEG, with a target price of VND 12,200 per share (+14%), based on FCFF and P/E valuation methods.

SAB – The big wagon is inching slowly in the context of the increasingly bumpy beer industry

• SAB's Q3-2024 results continued a series of low growth in single digits with net revenue of VND 7,670 bn (-5.1% QoQ, +3.4% YoY) and NPAT-MI reached VND 1,119 bn (-10.3% QoQ, +7.2% YoY).
• With great challenges from the industry context and the unattractive story of market share snatching, the current valuation of EVEBITDA (11x) is considered in line with the low growth prospects (single digits) in the coming years.
• The point of note lies in the dividend distribution strategy, its dividend yield (5.5-6.0%/year) is tending to be higher than the deposit interest rate (5.0%/year) in the last 2 years. Investors who follow the dividend investment theme need to monitor the consistency of this ratio in the following years to consider accumulating dividends every year
  

HAH - Fleet expansion and high charter rates to sustain profit growth through 2025

• We apply a multiple valuation approach and set target P/B and EV/EBITDA multiples at 1.0x and 5.9x, respectively. We raise our 2025 target price for HAH from VND 50,600 per share to VND 58,000 per share. We maintain a BUY recommendation on HAH, with an expected return of 23% based on the target price as of November 18, 2024.
• In November 2024, HAH invested in the TORO vessel, which has a capacity of 3,500 TEU, for a purchase price of USD 25 mn. HAH owns a 100% interest in this vessel. Currently, TORO is under a time charter agreement with its previous owner at USD 30,000 per day until the end of June 2025. The vessel was renamed HAIAN GAMA and continues to operate under the existing charter contract. We estimate that HAIAN GAMA will contribute VND 230 bn (USD 9 mn) EBITDA and VND 100 bn (USD 4 mn) NPAT-MI in 2025.
• For 2025, we forecast revenue and NPAT-MI to reach VND 4,176 bn (USD 166 mn, +11% YoY) and VND 748 bn (USD 30 mn, +37% YoY), respectively. This translates to a diluted EPS of VND 5,067. The projected BVPS is VND 30,200, while EBITDA is expected to hit VND 1,860 bn (USD 74 mn, +34% YoY). The robust growth is fueled by 2 factors: (1) a low base in 1H2024 and (2) high charter rates in vessel time charter operations.
• With better-than-expected  9M2024 results, we have revised our 2024 projections upwards. Revenue and NPAT-MI are expected at VND 3,759 bn (USD 149 mn, +44% YoY) and VND 544 bn (USD 22 mn, +41% YoY), up 1% and 14% respectively from our previous estimates. Diluted EPS for 2024 is projected at VND 3,635.

Update on Vietnam’s trade in 10M2024

• Export growth of the domestic sector is double that of FDI exports in October 2024.
• Electronic exports are gradually declining in the last months of the year.
• Trump 2.0 and Vietnam's export prospects in 2025.

MSB 3Q-2024 Update: Foreign exchange trading activities caused 3Q-2024 PBT to drop sharply by 28% YoY but should drive the profit growth in the next quarter, in addition to lower credit cost

• 3Q-2024 PBT reached VND 1.2 trillion, down sharply by -43.9% QoQ and -27.6% YoY due to (1) NIM (quarterly) narrowing by -20bps QoQ and -60bps YoY as funding cost increased, and (2) foreign exchange trading recorded a loss of VND 131 billion.
• Accumulated 9M-2024 PBT to VND 4.9 trillion, completing 72% of the 2024 plan (VND 6.8 trillion). ROA and ROE ratios reached 1.5% and 13.2%, respectively.
• Regarding asset quality, net bad debt formation (before write-off) has decreased in the last two quarters, which is a positive signal. Outstanding loans of group 2, 3 and 4 all decreased compared to the previous quarter, which may continue to support the improving trend of asset quality in the short term. The bad debt ratio decreased slightly to 2.0% compared to 2.1% in 2Q. MSB also expects that bad debt has peaked and the bad debt ratio will be kept at 2% at the end of 2024.
• MSB maintains its full-year PBT plan at VND 6.8 trillion (+16.6 YoY). This profit target implies that 4Q-2024 PBT will reach VND 1.9 trillion (up 56.6% QoQ and 213.0% YoY) driven by: (1) Profit from foreign exchange trading activities returning to profitability in 4Q based on expectations that exchange rates will continue to be anchored high, (2) Credit costs will cool down as MSB is on a trend of improving asset quality, (3) Profit from bad debt recovery of about VND 1 trillion.

The Seafood Industry from the Perspective of Trump's President

• VHC will benefit the most if US imposes an import tax of 60-100% on China and 10-20% on other countries, as the US is its primary export market, while ANV and IDI will benefit less, as the US market accounts for only about 10% and below 5% of their revenue, respectively. In the best-case scenario, VHC's NPAT-MI in 2026 could reach 1,872 billion VND (or USD 74 mn), equivalent to an EPS of 9,307 VND/share (+12% compared to our previous estimate).
• The likelihood of imposing these taxes is still uncertain, but the expected rates may not be too high due to the low trade volume of seafood imports and exports in the US
• Before the tax period begins, seafood export volumes are likely to increase sharply as US buyers stock up in advance to avoid high taxes. However, rising transportation costs are expected to erode profits.
• After the new tax rates take effect, the market share of pangasius in the US will increase or decrease depending on price competitiveness post-tax. Meanwhile, the shrimp industry is expected to neither benefit nor be negatively impacted, as shrimp exporters to the US are primarily India, Ecuador, and Indonesia, and the price of Vietnamese shrimp is also higher than domestically produced shrimp in the US

KDH – Foresta is a key project for presales in 2025

• Business results in Q3/2024 are relatively modest with NPAT-MI reaching VND 70 billion; and revenue and profit in 2024 are expected to be recorded in 4Q2024 when the company hands over The Privia project, with revenue and profit expected to reach VND 3,694 billion and VND 895 billion. For the whole year of 2024, we estimate total revenue and PNAT-MI reach VND 4,523 billion (+116% YoY) and VND 1,058 billion (+48% YoY), respectively, with the focus on handing over The Privia project (Binh Tan). EPS 2024 is expected to reach VND 979.
• Inventory in 3Q2024 recorded the 6th consecutive quarter growth, reaching more than VND 22,400 billion with a large contribution from growth by projects preparing to be handed over (Privia) and projects under development of land funds (Solina, BT-BTD, BT-BTD,...).
• Using the RNAV method, we offer a target price of VND 41,200/share, equivalent to an expected total return of 23% compared to the closing price on November 13, 2024, with a BUY recommendation for long-term investment purposes.

MWG – Performance decelerated due to end of peak air-conditioning season and high one-off costs

• Q3-2024 business results of core segments in line with our forecast, except for one-off costs from store closures were higher than expected. Net revenue reached VND 34,147 bn (flat QoQ, +12.7% YoY), NPAT-MI reached VND 800 bn (-31.7% QoQ, x20 times YoY).
• In the long term, the trend of trimming the stores system in saturated and highly competitive segments such as TGDD&DMX will continue, while BHX will gradually become a pillar in expanding revenue (~35% supermarket market share), net margin (0.8%).
• As reported in MWG's valuation report on October 21st, 2024, the current stock price relatively reflects long-term growth prospects with a fair value of VND 63,700, equivalent to a projected PE of 20.8x in 2025

IDC – Expanding Land Bank to Sustain Growth

• For 9M2024, IDC reported revenue of VND 6.9 trillion (USD 274 million; +38% YoY), with industrial park (IP) land lease revenue reaching VND 3 trillion (USD 119 million; +52% YoY). During this period, the company recorded lease revenue for 88 ha, of which 46 ha were from MOUs signed in 2023, and 32 ha were from new contracts signed in 2024. 
• For 2024, IDC’s NPAT is projected to reach VND 2.2 trillion (USD 87 million; +57% YoY); EPS for 2024 is estimated at VND 6,600, with a maintained cash dividend of VND 4,000/share. Q4 revenue and NPAT could reach VND 2.3 trillion (USD 91 million) and VND 554 billion (USD 22 million), respectively, comparable to the same period in 2023
• IDC plans to advance operations with IPs that have completed investment policy approvals, increasing the total leaseable land area to 961 ha, including Tan Phuoc 01 IP (Tien Giang, 65% owned by IDC) and My Xuan B1 IP expansion (Vung Tau, 51% owned by IDC).
• Using SOTPs method, we set the IDC’s target price of VND 60,100/share (with a +12% upside from the closing price on November 11, 2024, inclusive of a cash dividend of VND 4,000/share), corresponding to an ACCUMULATE recommendation. 

VPB - Q3-2024 AM Update: Net Interest Income and Bad Debt Recovery Drive Total Operating Income; Asset Quality Begins to Improve

• Consolidated Pre-Tax Profit (PBT) for Q3-2024 reached VND 5.2 trillion (+66% YoY), falling about 7% below expectations. Cumulatively for the first nine months of 2024, consolidated PBT reached VND 13.9 trillion (+67% YoY), achieving 70% of the full-year forecast.
• Key drivers contributing to PBT growth this quarter aligned well with expectations, including: (1) credit growth (8.7% consolidated and 10.4% for the parent bank); (2) a 90 bps YoY expansion in NIM to 5.8% from last year’s low base, along with positive bad debt recovery at both the parent bank (over VND 800 billion, +82% YoY) and FE Credit (VND 750 billion, triple the 2022-2023 average); (3) a 29% reduction in credit risk provisioning compared to the previous quarter, as VAMC bond repurchase pressures eased, resulting in a consolidated credit cost ratio of 1.0%, on par with the same period in 2023.
• Looking ahead to the end of the year, VPB anticipates credit growth of 15-17%, with potential for a slight increase in funding costs (due to accelerated credit growth by year-end), which could put NIM under pressure in Q4. While income from bad debt recovery is expected to remain positive, VPB remains cautious, forecasting a flat NPL ratio compared to Q3.
• Forecasts for 2024F-2025F and target price for VPB are under review and will be updated in the forthcoming report

PNJ – Gold supply shortage remains a major risk

We attended the investor meeting of Phu Nhuan Jewelry JSC (Ticker: PNJ), with the company's management team present. Key points we would like to highlight are as follows: