19-12-2025VNINDEX1704.3127.331.63% HNXIndex253.970.740.29% UPCOM119.410.660.56% VN301933.2829.811.57% VN1001831.7827.721.54% HNX30547.993.690.68% VNXALL2863.4540.461.43% VNX503185.4953.731.72% VNMID2213.9816.830.77% VNSML1485.72-5.49-0.37% Industrial Park - Development orientation for ready-built factories/warehouses
14-10-2024
: LHG, SIP
: Industrial Land RE
: Thach Lam Do, CFA
Tags: LHG SIP
- We observe stable growth in demand for ready-built factories and warehouses (RBFs/RBWs), a sector that industrial park developers may increasingly focus on for long-term expansion. According to JLL, from 2019 to 2023, the supply of RBFs/RBWs recorded an average annual growth rate of 14.5%, with a total leasable area increasing by 6 million sqm. By 2027, the total leasable area is expected to reach 19 million sqm, with a projected average growth rate of 8% per year between 2023 and 2027.
- For Vietnam’s industrial park developers, expanding into RBFs is also a strategy to capitalize on available industrial park land, though it remains on a small scale. We believe this development model will attract more attention from industrial park companies in the near future due to its key advantages: 1) Providing stable cash flow; 2) Suited to small and medium-sized customers; 3) Meeting the high demand for RBWs, particularly serving e-commerce activities in Tier-1 cities like Hanoi and Ho Chi Minh City.
- Among companies in our watchlist, we see several have aligned their investment strategies with this business segment to maximize the potential of their industrial park land. In 2024, LHG completed the construction and has begun leasing RBFs at lot 3A 26-19 (LH3 Industrial Park) and plans to build additional RBFs at lot 3A and high-rise RBF in 2025, raising the total leasable area to 136,800 sqm (+20% YoY). SIP is partnering with CBRE to develop a system of RBW and a logistics center at LMX03, which will enhance LMX03’s business performance in the coming years.
Textile Industry – Profit faces challenges in highly competitive context
11-10-2024
: TNG, TCM
: Textile & Garment
: Quan Cao
Tags:
- Vietnam's textile industry is facing intense competition, not only from other countries but also among domestic companies.
- The room for margin exansion is shrinking due to increasing competition.
- In the long term, growth opportunities will arise for companies that adopt advanced technologies to improve productivity or focus on high value-added products such as designer goods
Rubber prices – supply shortage creates a driving force for price anchoring in the medium term
10-10-2024
: DPR, PHR
: Industrial Land RE
: Giao Nguyen
Tags:
- In early October, rubber prices continued to increase and peaked after 13 years and reached VND73.6 million /ton (RSS3) (+96.7%YoY, +10.3%MoM). The main reason comes from supply shortages in key manufacturing regions in Southeast Asia. We believe that the trend of world rubber prices is expected to remain at a high level when the supply is forecasted to remain in short supply; the shortage is forecast to extend to 1H2025.
- For the Vietnamese market, output in 2024 is forecast to decrease only slightly by 3.5% because rubber-growing areas are less directly affected by the storm. Rubber prices are expected to continue to be anchored at a high level (over $1,600/ton) and react to the supply and demand situation of the world rubber industry.
- We believe that DPR and PHR's core business segments are expected to benefit. In which, PHR's revenue and profit after profit in 3Q2024 were VND 497 billion and VND 120 billion, respectively, with revenue from rubber reaching VND 484 billion (+88%YoY). DPR's revenue and profit after tax in 3Q2024 are estimated at VND 358 billion and VND 60 billion, revenue from the rubber segment contributed VND 313 billion (+34%YoY).
The pharmaceutical retail market — Long Chau leads the market
09-10-2024
: FRT
: Retailing
: Quyen Nguyen
Tags:
- There are approximately 50,000 pharmacies in Vietnam, with mom & pop drugstores dominating the market, holding about 85% market share. However, modern pharmacy chains, led by Long Chau, are continuously expanding their scale.
- We anticipate that competition in the pharmaceutical retail market will increase in the near future. However, we believe that Long Chau will continue to lead as the top modern pharmacy chain.
Power Sector — Favourable cycle to support hydropower generation companies in 2025
08-10-2024
: PC1, REE
: Utilities
:
Tags: REE PC1
- System-wide electricity consumption achieved stellar growth in 9M2024, driven by the recovery of industrial production activities and increasing residential electricity demand. We expect electricity demand to continue growing in 2025, alongside an improvement in the financial performance of power companies in general.
- For hydropower generation companies, we remain optimistic due to (1) increasing sales volume in 2025 thanks to the ongoing La Niña cycle, and (2) stable or potentially higher average electricity prices in 2025, given the possibility of improved financial conditions for EVN.
Fertilizer Industry – A Perspective on Global Demand and Short-term Selling Prices
07-10-2024
: DPM, DCM, BFC
: Fertilizer
: Hien Le
Tags:
- The domestic fertilizer market has become saturated with supply exceeding demand. As a result, companies are shifting their focus towards exporting fertilizers to global markets. However, export growth is expected to come from capturing market share from other countries rather than relying on natural growth, as global supply for each type of fertilizer is projected to exceed demand.
- Regarding fertilizer selling prices, according to World Bank data, the average selling prices of fertilizers are expected to decrease in 2024 and 2025 as supply is expected to increase due to India and Brazil expanding production capacity to reduce import demand, while China continues to restrict exports.
- Currently, domestic Urea prices remain stable at 10,000 VND/kg and are expected to slightly increase by 5%-10% during the Winter-Spring crop season as agricultural demand returns. However, the increase will not be too significant as global Urea prices remain stable in the range of 300-350 USD/ton. Domestic Urea fertilizer prices correlate with global fertilizer prices with a correlation coefficient of 0.9.
Vietnam chilled-fresh meat market – Significant long-term potential but difficult to realize in
04-10-2024
: MML, VSN
: Food, Beverage & Tobacco
: Hung Nguyen
Tags:
- Euromonitor predicts that growth in the meat market will slow down to a CAGR of 4.1% over the period 2024-28, as rising consumption of new types of meat such as beef and goat will not be enough to offset saturation in consumption of pork and poultry, the main products consumed in Vietnam
- Although overall market growth may be limited, the potential for a shift in consumer preferences from hot-fresh to chilled-fresh meat in Vietnam continues to attract major brands. However, the market still faces obstacles, including long-standing consumer habits of buying hot-fresh meat in traditional markets and the higher price of packaged chilled-fresh meat in retail chains
- The pace of development of modern supermarket channels, along with the ability to raise public awareness of the benefits of chilled-fresh meat, is key to unlocking the long-term potential of this market, creating investment opportunities for chilled-fresh meat stocks such as MML and VSN
- Investors should also pay attention to the market share growth of supermarket chains associated with chilled-fresh meat producers, such as Co.op Mart (VSN), BHX, Lan Chi, Go! (CP, G) and Winmart (MML) when making investment decisions in these stocks. Due to fierce competition, a meat brand will typically only distribute through a few specific supermarket chains it has developed
VPB – Expectation of Maintaining Strong Profit Growth in Q3 2024
03-10-2024
: VPB
: Banking
: Tung Do
Tags:
- For Q3-2024, we estimate consolidated pre-tax profit (PBT) to grow 80% YoY, reaching VND 5.6 trillion. This is based on expectations of a significant 90 basis points YoY increase in consolidated net interest margin (NIM) to 5.8%, as VPB's NIM hit its lowest point in the same period of 2023. Consolidated credit growth is projected at 17.4% YoY (or 9.5% year-to-date). Consequently, net interest and total operating income are expected to grow 37% YoY and 38% YoY, respectively, providing VPB with additional resources to increase provisions in the year's second half prudently. At the same time, VPB is expected to record high-profit growth, benefiting from a low base in 2023. Provision expenses are estimated to rise 22% YoY to approximately VND 6 trillion but will decrease by about 28% from the previous quarter, as VPB repurchased VAMC bonds in the prior quarter, which temporarily increased provisioning pressure.
- For the first nine months of 2024, consolidated PBT is projected to reach VND 14.3 trillion, up 72% YoY, achieving 62% of the full-year PBT target. Of this, the bank’s standalone PBT for the nine months is expected to reach VND 13.7 trillion (up 25% YoY), fulfilling 66% of the full-year target. Regarding FE Credit, we forecast the consumer finance company to report a profit of more than VND 200 billion in Q3-2024, bringing cumulative PBT to negative VND 108 billion (full-year target of VND 1.2 trillion).
- For the 2024F forecast, we have revised down our consolidated PBT estimate by 8% from our previous projection to VND 19.0 trillion (+73% YoY) from VND 20.7 trillion (+88% YoY). This adjustment is based on a downward revision of the full-year consolidated credit growth assumption from 23% to 16%, and an increase in the credit cost ratio from 3.3% to 3.6%, reflecting our expectation that VPB will adopt a more cautious approach in managing risks for the remainder of the year.
- We have slightly reduced VPB's target price by 3% to VND 22,500 per share. With an assumed cash dividend payout ratio of 10% over the next 12 months (corresponding to a payout ratio of 54%), the expected total return is 17%. We reiterate our recommendation to ACCUMULATE VPB.
SIP – Stable growth in leasing and providing industrial park services
02-10-2024
: SIP
: Industrial Land RE
: Thach Lam Do, CFA
Tags: SIP
- In 1H2024, SIP recorded revenue and gross profit of VND 3.76 tn (USD 151.6mn, +23% YoY) and VND 516bn (USD 21mn, +23%YoY), respectively. Electricity and water distribution for industrial parks (IPs) continues to be the main revenue-generating sector for SIP, with revenue and gross profit to reach VND 3.1 trillion (USD125mn, +22%YoY) and VND 238 billion (USD 9.6mn, +21%YoY), respectively. In terms of sales, the company signed new lease contracts with a total area of ~28ha (completing 60% of the business plan), mainly leasing to customers with large areas.
- For 2H2024, in addition to positive business results from electricity and water distribution to IPs, we expect SIP to start recording revenue from new lease contracts (signed in 2024); thereby revenue and gross profit could reach VND 3,757 billion (USD 151mn, +4%YoY) and VND 571 billion (USD 23mn, +11%YoY), respectively. NPATMI for the 2H2024 and full year can reach VND 567 billion (USD 22.9mn, +12%YoY) and VND 1,111 billion (USD 44.8mn, +20%YoY), respectively. EPS 2024 can reach VND 5,500.
- Using the sum-of-the-parts method, we set a target price for SIP shares at VND 101,600 per share (with an upside potential of +39% compared to the closing price on October 02, 2024), equivalent to a BUY recommendation for long-term investment.
Pharmaceutical retail market - Potential growth in the mid-term but beware of risk
01-10-2024
: FRT
: Retailing
: Quyen Nguyen
Tags:
- Pharmacies are one key distribution channel for not only pharmaceuticals but also other products (supplements, cosmetics, FMCG,….) directly to end consumers.
- According to IQVIA, pharmaceutical retail revenue reached VND 125,203 billion (USD 4,968 million) in 2023, growing at an average annual rate of 13.0% from 2018 to 2023. Both IQVIA and our projections estimate that retail revenue will reach VND 186,390 billion (USD 7,399 million) by 2028, growing at an average rate of 8.3% per year. However, the retail channel is expected to lose market share in the overall pharmaceutical sector due to the increasing coverage of Social Healthcare Insurance (SHI), as directed by the government, and improvements in the infrastructure of both public and private hospitals.
- Long Chau is the only pharmaceutical retail chain in the market to have profited since 2021, and currently leading in the number of pharmacy outlets.
- A major risk we highlight, which could impact the current pharmaceutical retail model, is the habit of purchasing prescription drugs without a doctor’s prescription at pharmacies in Vietnam. Regulations clearly prohibit such sales. When these rules are enforced strictly (which we expect will happen in the future, as it is already implemented in many developed countries), it will affect the business operations of current pharmacy retailers significantly.
Coated steel market in 8M2024
30-09-2024
: HPG, HSG, NKG
: Materials
: Dung Ma
Tags: NKG HPG HSG
- Steel coated consumption in 8M2024 experienced positive growth, with total domestic volume reaching 1.527 million tons (+18.9% YoY). The southern region led in terms of volume, accounting for 922,951 tons (60.4%), though the northern region posted stronger growth at +21.8% YoY. Export volumes surged to 2.152 million tons (+48.0% YoY), primarily focused on key markets in ASEAN, the EU, and the U.S. Hoa Sen Group (HSG) maintained its leadership in the domestic market, capturing 34% of the northern market and 21% in the southern region. This represented a 0.5% increase in market share compared to the same period last year. Nam Kim Steel (NKG) also increased its market share by 0.5%, while Ton Dong A (GDA) saw a 2.3% decline, as its factory was operating at full capacity.
- For Q4/2024, domestic volume is projected to reach 600,000 tons (+5.4% QoQ, -1.7% YoY), while export volume is expected to reach 587,500 tons (-14.6% QoQ, +0.5% YoY). Regarding commodity prices (HRC), we believe the decline in Chinese HRC prices will stabilize following real estate support policies. In addition, the recovery in HRC prices in the U.S. and EU has shown signs of improvement, raising expectations that the price gap between domestic and global HRC will widen towards the end of 2024, thereby improving export profit margins for companies.
- For the latter part of 2024, we recommend a short term buy on HSG shares, with a target price of VND 23,500, based on the following: 1) A recovery in the real estate market, particularly in the North, where HSG leads the market; 2) A reduction in the export ratio to below 60%, helping to reduce the impact of steel price fluctuations on gross profit margins; 3) HRC prices bottoming out, stabilizing domestic steel prices, and improving domestic profit margins in Q4/2024.
Seafood Industry – Expected to maintain growth momentum in the remaining months of 2024
27-09-2024
: VHC, FMC, ANV
: Fishery
: Hien Le
Tags:
- In August 2024, Vietnam’s pangasius exports saw a slight increase of 2% YoY, reaching USD 174 million. This growth was supported by a 6% YoY increase in export volumes, despite average selling prices for the sector being 4% lower than the same period last year. The overall industry growth rate slowed down in August due to the absence of a low base effect for export volumes. However, export volumes to the U.S. and China maintained strong double-digit growth, with YoY increases of 24% and 19%, respectively.
- Pangasius export value is expected to increase in both price and volume for the remaining months of the year. Price growth is forecasted due to (1) the upcoming holiday season, (2) a low base in 2023, and (3) gradual increases in pangasius prices in line with other fish types. Volume growth will be driven by (1) retail F&B inventory to sales ratios in the U.S. remaining below the 5 year average, (2) lower U.S. imports of fish fillets during 7M2024 compared to the same period last year, suggesting inventory levels are not excessively high, and (3) pangasius prices remaining lower than those of other fish species.
- In August 2024, shrimp exports reached USD 358 million (+8% YoY). Within this, whiteleg shrimp accounted for USD 267 million (+7% YoY), black tiger shrimp reached USD 42 million (-5% YoY), and other shrimp species, primarily lobsters, totaled USD 48 million (+25% YoY). Export volumes for whiteleg and black tiger shrimp rose by 12% and 5%, respectively, although average selling prices remained 4% and 9% lower than last year.
- In the pangasius sector, Vinh Hoan Corporation (VHC) is expected to benefit more than Nam Viet Corporation (ANV) due to anticipated sustained price growth in the US market (main export market of VHC), while prices in China (main export market of ANV) have yet to recover. In the shrimp sector, although Japan’s market (main market of FMC) growth has slowed, increased export volumes to the US and the UK (which together account for 40% of FMC revenue) are expected to improve overall export volumes.
14-10-2024
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