PNJ - Company Report Release on July 04, 2016

The positive outlook of Vietnam’s consumer goods market is supported by (1) the young and growing population, (2) recent improvements in income per capita and (2) consumers’ growing tendency to use high-quality, branded products increases. PNJ currently holds over 25% of share in the domestic branded jewelry market, outweighing runner-ups like Doji and SJC. Wide market coverage and strong brand recognition are primary advantages that has helped PNJ to expand their network.

Brief update about DPR and PHR

Recently, our analyst had a company visit with the representative from Phuoc Hoa Rubber JSC (PHR-HSX) and Dong Phu JSC (HOSE –DPR). In 1H2016, rubber price keeps its recovery momentum thanks to three supporting factors (1) Decreasing supply due to some hinder measures in exploiting and exporting, (2) The recovery of oil price and (3) The recovery of Chinese automobile industry

Manufacturing activities remain positive outlook

In the 1H2016 socioeconomic situation report, the industrial production index (IIP) recorded a positive growth, +7.5% yoy. In particular, the manufacturing increased by 10.1% and made the largest contributor (equivalent to 7.1 percentage point) to the industrial production growth rate.

PNJ - Lucrative prospect thanks to the golden age structure and the change in consumer trend

After holding for more than 8 years, Vietnam Azalea Fund Limited, one of four investment fund of Mekong Capital, has just announced that it will divest 3 million shares of Phu Nhuan Jewelry JSC (HSX: PNJ) using negotiation method this July. We believe that the main reason of this divestment is the force to close Azalea Fund next year. At low cost of just around VND35,500 per share, the investment in PNJ has brought the fund quite attractive rate of return. In addition, the price movement of PNJ stock recently has been positive with the liquidity improvement and the growth in stock price.

About PNJ, we highly appreciate the prospect of the Company’s retail segment. Retail is one of three distribution method of PNJ along with wholesale and export. This segment plays the most important role of the three by contributing up to 55% of total revenue and 80-85% of gross profit. More importantly, this sales channel has the highest gross margin of about 27% compared to the wholesale (3-5%) and the export (10-12%).   

ACB: Operation updated

ACB recently announced interest rate for the first interest payment period (Jun 30^th 2016 – Jun 30^th 2017) for 2016 bonds issued by the  bank. We would like to remind you that ACB’s bonds issued in 2016 has total value of VND2,000 bn (face value: VND100 mn per bond), is annual interest payment with 5 year term. We knowledged that all the bonds were bought immediately after the bank announced the issuance.

1H2016 economic growth assessment

According to GSO, 1H2016 economic growth recorded 5.52%, only a slight improvement compared to the first quarter and lowered than a 6.3% in 1H2015.
In particular, the agricultural industry saw a recovery in 2Q2016 but not enough to help the agricultural sector upped. Regarding agricultural-forestry-fishery sector, we high rated the recovery of the agricultural sector, while the fishery sector’s added value recorded the slowest growth in many years. According to Customs, fishery export-import value reached USD2.4bl, downed 17.3% yoy.

Sanest Dien Khanh IPO- Considerable growth potential owing to capacity expansion

Dien Khanh Sanest one-member company limited (Sanest Dien Khanh)’s IPO takes place on June 29^th 2016, on which RongViet Research has a quick analysis.

Dien Khanh Sanest one-member company Limited (Sanest Dien Khanh) is a one member company limited under Khanh Hoa Salanganes Nest Company. The company was formerly known as High-end beverage Sanest Dien Khanh factory, a 5 million products/year factory which went into operation in 2003. The capacity then has been increased and in 2013, the operating capacity was upgraded to 50 million products per year. On December 2014, the factory’s name was changed to the current name.

ITD – Conservative plan for year 2016

2016’s plan is too conservative. At the AGM, shareholders approved the plan with revenue of VND740 billion (+18% vs 2015’s actual value) and PAT of VND47 billion (+2% vs 2015’s actual value). This plan is relatively lower than our estimate. In 2015, the Company has revenue increasing by 34% and PAT increasing by 448% thanks to huge contribution of ITS’s segment. In this segment, ITD is currently the leading company in providing toll collection equipment and solution at express ways as well as national way. In 2015, ITD implementing some large toll collection projects for Hainoi-Hai Phong expressway, Long Thanh –Dau Giay express way. According to the progress of these projects, we believe that ITD will surpass its both revenue and profit target.

Brexit: The terror from within the EU and its affects on Vietnam

Today, global and Vietnamese financial markets’ movements demonstrated cautious and unexpected reaction facing 51.9% of vote for Brexit. According to Bloomberg’s statistics, GBP depreciated by 11%, reached the lowest point since 1985. Most of global market indicators decreased by 5 – 7%. Even in commodity markets, oil price also dropped by 5.1% to USD 47.56/barrel, strongest decline since 02/2016. In contrast, the capital flows into safe assets such as gold or US’s bonds. Majority of assessments provided the opinion that leaving EU will negatively affect UK’s economy with increasing inflation and depreciation of GBP in the future.

IMP - Update on the plant projects and operating result

Recently, Rong Viet Analyst had a chance to meet with representative of Imexpharm JSC to discuss their projects progress and their operational status. In the first 5 months, Imexpharm recorded gross revenue of VND 343 billion and profit before tax of VND 39 billion, which are both lower than those of the same period last year. The reason is that sale of Imexpharm products only increased by 5% cannot offset the significantly decrease of franchise sales (32 billion YTD May 2016 versus 45 billion YTD May 2015), and that in 2016 there was no national program which is valued 20 billion in 2015. According to Imexpharm’s representative, gross revenue and profit before tax for first half of 2016 are expected to reach 450 billion 6T2016 (-2.4% yoy) and 45 billion (-18% yoy) respectively. This means IMP has only completed 41% of the planned revenue and 32% planned profit.

GMD- Core operation continues to keep growth on track

We have a meeting today with representative of Gemadept JSC (GMD-HSX) and hereby would like to give investors some updates.

CNG – Northern market shows no improvement

In the first 6 months of 2016, CNG realized a quite stable performance in a low-price environment, which hit a 12-year low in the first quarter. CNG’s six-month revenue forecasted by RongViet Research was VND 440 million (-11.1% yoy). According to the firm’s representatives, Earnings before Tax was around VND 57 to 58 million (-1.7% yoy). This figure is quite small compared to the year plan, which is VND 150 bn with Earnings before Tax and VND 127.1 bn with Net Income.