GMD – Aggressive Expansion Plans Ahead to Manage Resilient Throughput Volume

• GMD plans to kick off the construction of the next phase at Gemalink and Nam Dinh Vu terminals this year.
• We estimate that the Gemalink terminal has handled 70-80k TEUs since the official operation on Jan 19^th, 2021 (~5% designed capacity).
• Nam Dinh Vu Terminal in Hai Phong has successfully attracted new services in early 2021. Consequently, we expect GMD terminals in Hai Phong to post solid performance in 2021.
• We are reviewing the forecast and valuation for GMD, pending an update on the situation. GMD’s stock price has reached our current TP of VND 35,300.

TCB – Ambitious technology-enabled growth

• The 2020 results beat our expectation by 2%.
• 2021 projected PBT is revised up to VND 18,870 bn (USD 820 mn, +19%), lower than the proposed PBT in the annual plan (VND 19,800 bn).
• The 2021-2025 plan is ambitious. We revise our estimation to match the strategic plan, but our projected NFI to TOI ratio will be not in line with the target.
• We raise the target price to VND 50,900/share and maintain a BUY This translates to an upside of 21% from the closing price of April 7 2021.

The 2020 results were better-than-expected, and lead to some revisions for 2021. Actual PBT was VND 15,800 bn (USD 687 mn, +23%), higher than our projection (VND 15,562 bn, +21%). We raise our projection for credit growth in the 2021-2025 period, due to rapid expansion of loans and the confidence of the BOM in receiving top credit limit. NII and net service income are revised upward also. 2021 PBT is expected at VND 18,870 bn (USD 820 mn, +19%).

We appreciate the ambitious strategic plan for the 2021-2025 period. We think that TCB will be able to scale up strongly in the next five years, given its solid capital base (CAR) and high efficiency (ROE and NIM). The credit book will see robust growth with diversification of customer segments. We think the target for NFI growth is hazard, and would wait for the execution to make further reassessment. The conservative leverage ratio is expected to be higher.

Sustainable ROE is li

FRANCE: GDP growth revised down.

President Emanuel Macron had hoped to steer France out of the pandemic without having to impose a third national lockdown. That did not happen as strict measures are now been put in place to attempt, again, to stem the rapid rise of new Covid-19 cases. French schools and non-essential stores such as clothing chains will now be shut for four weeks.

DXS – IPO of the biggest real estate broker

Dat Xanh Services (“DXS”) – the brokerage arm of Dat Xanh Group (“DXG”) is currently the golden-egg laying hen by contributing 70-90% of DXG’s gross profit. With a leading position in real estate brokerage and impressive growth potential, DXS is expected to attract the attention of investors in this IPO (IPO price is VND 32,000) from three main highlights include:

(1) Undisputed champion in real estate brokerage

(2) Superior financial performance above other players

(3) Solid growth prospect thanks to its efforts to become a fully integrated broker  

Pig prices are unlikely to decline much

China re-herd of pigs went well, causing the price of animal feed materials to increase strongly and it is expected to stay at high level in the future. Although the supply of pigs in Vietnam is increasing rapidly, the breeding cost increased together with the animal feed prices, causing the price of pork (live weight) to not decrease much. This situation will help large companies who have their own breeding pigs like Dabaco to grow their profits by expanding their sale volume.

HSG update – Strong performance in 2Q and 3Q FY2020-2021

Favorable market conditions will be supportive factors for HSG’s 2Q and 3Q bottom line. Therefore, we think investors can consider a short-term trading opportunity. Per our estimation, HSG’s TTM EPS at the end of 3Q will be VND 4,300. Assuming a 7.7x PE (20% discounted from HPG’s PER), the share price can go up to VND 33,000. However, in the longer term, NPAT can revert to the normal level. At the current market price, the FY2020-2021 forward PE is 8.7x, which we think is already fair, somewhat overpriced considering that next year's NPAT growth will be -39%. Therefore, we recommend to MONITOR the stock to see if there is an investment opportunity for the long term.

REE: AGM update

We maintain our target price for REE at VND 54,000, offering an upside of 3% compared to the closing price on March 31^st, 2021. Hence, we recommend to accumulate this stock. Our new target price for REE will be published in our next report.

US: Recent NABE Survey

Highlights.

Comments on recent events: Moody’s & credit quota

• Moody’s lifted Vietnam’s outlook to positive
• How can we interpret recent rumors on lower credit growth quotas?

BMP – PVC resin price reached a historical high

• PVC resin price reached a record high level during March, USD 1,400 per ton.
• Plastic pipe companies’ profit margin is going to shrink strongly.
• 2021 earnings are likely to be lower than our expectations.
• BMP is currently rated “NEUTRAL” on our list, with a VND 57,300 target price and VND 4,000 cash dividend in the next 12M.