LCG – Potential not yet confirmed by business performance

Yesterday, our analyst attended an analyst meeting of Licogi 16 JSC (HSX – LCG), where the Company revealed its business results for FY2015 as well as the guidance for FY2016. In the nine months to September, LCG reported VND45bn of net income, 100% of the annual NPAT guidance. However, the firm said it made only a third of that number for the whole year of 2015. The stock of LCG lost over 13% over the past 5 days.

DHA, KSB earnings update - Keep on growing

The fourth-quarter earnings season is about to pick off. Like many other listed enterprises, Hoa An JSC has just unveiled its over-expected performance in 2015. Accordingly, 2015’s revenues were VND201.51 billion, an increase of 17.8% compared to FY2014; net income rose significantly 190% to VND44.37 billion. If excluding extraordinary profit from the transfer Thuong Tan mine, the adjusted profit still climbed 155.1%. The positive earnings came from (1) consumption volume climbed 10.3% compared with FY2014, (2) the average selling price added 7% and (3) the Company tightened its control policy to avoid losses and enhance production efficiency.

GAS - Preliminary estimated results for 2015 and 2016 prospects

Today (22/1/2016), Rongviet Research participated in the analyst meeting hosted by PetroVietnam Gas Corporation (GAS – HSX).

In 2015, under the negative pressure from global crude oil prices, GAS achieved pessimistic business results with revenue and profit before tax at 63,454 billion (-13.84% yoy) and 11.220 billion (-37.64% yoy) respectively

DGW - 2015 Earnings updates

2015’s performance was not as expected due to sudden drop in Nokia’s revenue. Total revenue of 2015 was only VND 4,208 billion, 14% lower than 2014’s figure and only 78% his guidance. This poor result was mainly due to external factor, which come from Nokia’s strategy. Nokia’s revenue in 2014 accounted for over 50% total revenue of DGW. However, in 2015, Nokia changed his business strategy to focus on software development, instead of manufacturing devices as previous years. Therefore, there was less new Nokia cell phone models introduced to customers and his products also become less attractive to customers in Vietnam. As a consequence, DGW get trouble in generating revenue by distributing Nokia’s products. Moreover, in DGW’s 2016 guidance, he also did not account for Nokia revenue in his business plan.

DHC recorded sweet figure in 2015

According to Q4/2015 DHC performance report published today, revenue and PAT reached respectively VND 172,7 billion and 27,5 billion, increased by 13.2% and 188.3% yoy. The positive result came from (1) an increase in revenue when carton packaging demand grew significantly, (2) an improvement in gross margin thanks to proactive BOM management when storing OCC in the low-price period (~USD 170/ton, compared with ~USD 200/ton in peak period) (3) getting preferential treatment in corporation income tax, which was recently approved by the General Department of Taxation. Currently, the tax of kraft manufacture plant was exempt while tax of box making plant was reduced 50% in 2015. Thus, in 2015, DHC only had to pay VND 6.3 billion, equivalents to tax rate of 7.6% (compare with 2014 tax rate of 22%)

PAC – Brighter prospect ahead

Recently, RongViet Research just had a chance to meet with representative of Dry Cell and Storage Battery JSC (PAC–HSX) and discuss the 2015 earnings result and 2016 annual targets. Specifically, in terms of 2015, PAC recorded revenue and NPBT at VND 2.253 bn (+11% y-o-y) and VND 123 bn (+28% y-o-y) respectively, equivalent to EPS at 3,096 dong. PAC can achieve such positive earnings result thanks to (1) The automobile storage battery recorded positive earnings result since automobile market had a remarkable sale volume figure in 2015; particularly, Thaco and Ford, two biggest customers of PAC, both recorded two digit growth rate in sale volume, (2) Material Input (Lead, Zinc) considerably decreased as China’s Economy slows (estimated lead prices in 2015 is equal to 1,789 USD per ton), (3) Profit from dry cell segment is slightly enhanced since PAC switched their material suppliers; this segment currently contributes about 12% in total revenue.

DHG-Need more solid basis

Today DHG has just published 4Q2015 business result in which revenue and NPBT reached VND1,150 billion (-12% yoy) and VND192 billion (-6.5% yoy). In 2015, revenue recorded VND3,609 billion (-7% yoy) and NPBT was VND704 billion (-2.5%). To compare with the 2015 target, DHG only accomplished 90% of revenue and 96% of NPBT.  However, thanks to tax incentives of about VND44 billion, NPAT still rose by 11%, reaching VND594 billion. EPS was about 6,800 VND/share, equivalent to P/E trailing at 9x.

HPG - The hog industry report relase

Pig raising activity has a long history of establishment but is now facing challenges from the need to modernize and rising competition brought on by FDI’s integrated pig rearing system holding large market share. While consumers still favor domestically sourced meats and demand growth is rated stable, large domestic firms’ opportunities to participate in this industry still looks bright looking forwards. HPG is one of those that has seen the potential of pig farming industry and believes that this particular industry would grow to become the firm’s second spearhead business beside steelmaking with appropriate approach and investments.

HSG – Comments on Annual General meeting

In the early of this week, Hoa Sen Group (HSX-HSG) hold its annual general meeting. Based on the information related to the yearly guidance plan in the fiscal year 2015-2016, there are some comments regarding to the business prospect of the Company.

FDI and FTAs - Two key drivers for Vietnam trade growth in 2015

As many Asian countries saw a rapid decline in trade activities, Vietnam, in contrast, has witnessed various highlight spots in both trade activites as well as economic growth. According to the General Department of Customs, export - import experienced a positive growth in 2015, corresponding to 8.2% and 11.6% yoy. Thus, these numbers reached USD162.11 billion and USD165.65 billion US dollars respectively, equivalent to USD 3.54 billion for trade deficit.

GSP – one step back, two steps forward

Last week, Gas Shipping JSC announced an important change to the firm’s accounting policy regarding “vessel docking expense”. Accordingly, from October 1 2015, the firm would start to make expense provision for scheduled docking of its vessel fleet (excluding vessels co-owned by Nhat Viet subsidiary) instead of carrying on the regime of allocating docking expense already incurred. As a consequence, GSP’s 4Q2015 earnings is likely to suffer as (1) the firm has to expend the entire unallocated accumulated docking expense as of the end of 3Q2015 (about VND10.7 billion) and (2) simultaneously make an expense provision for docking activity due to take place in the next 2.5 years. Given that assumption, we forecast the firm’s 4Q2015 earnings would see insignificant change in revenue as to preceding quarter but on the contrary suffer a drastic fall in PAT to only VND1-2 billion (down 88% qoq). However, FY2015 is still regarded a milestone year for GSP given its first time breaking the VND1,000 billion in revenue mark and recording impressive growth in PAT of VND53 billion (up 67% yoy) for the whole year.

HSG - 2014-2015FY updates

At the end of Hoa Sen Group’s financial year on September 30^th 2015, the company realised VND 17,447 billion revenue and VND 653 billion NPAT respectively, 16% and 59% higher than those of the previous financial year. HSG’s sales volume exceeded 1 million tons, increasing 26% y.o.y, as the gross margin inclined 3.1 percentage points to 14.77%. The company remained the first ranking in terms of HDG market shares (38.2% in 11M2015) and came second regarding steel pipe market share (19.1%).