Social Housing Project 2021 – 2030: Expectations for positive changes in the next stage
26-09-2024
26-09-2024: NLG, VHM, TCH
: Real Estate
: Giao Nguyen
Tags:
- Social housing projects in the period of 2021 – 2025: most projects are at the stage of approving investment policies but have not yet been implemented (accounting for 73% of the total number of projects granted investment policies). Meanwhile, the planning progress of most localities is still slow, and the general planning rate for the whole project from 2021 to 2025 is only 2%. At the above rate, it is unlikely that the 2021-2025 Project will reach the set target, most of the reasons for the maf come from the bottleneck in the land fund as well as the policy mechanism that is not attractive to developers and difficult to access for buyers (low income).
- Decree 100/2024, which takes effect from August 1, 2024, and Decree 115/2024, which takes effect on September 16, 2024, are expected to (1) have solutions to help developers shorten the time for social housing development procedures, (2) remove obstacles and bottlenecks over the past years in the procedures for approving investment policies for projects in general and social housing in particular.
- We expect that with the introduction of the above decrees, and at the same time there are more feasible solutions for access to capital from developers and home buyers, the implementation speed of social housing projects will have a marked positive change in the period of 2025 – 2030.
178 Update on monetary market in Sep 2024
25-09-2024
: VDS
: Macroeconomics
: My Tran
Tags:
- Global currencies did not respond strongly after key monetary policy meetings.
- The SBV continues to support liquidity for the banking system.
GEG – 2024F earnings growth driven by wind energy and lower interest expenses
24-09-2024
: GEG
: Utilities
: Thang Hoang
Tags:
- GEG achieved solid results in H1 2024, with revenue of VND 1,227bn (USD 49mn +19% YoY) and NPAT-MI of VND 11bn (USD 0.4mn; +52% YoY), mainly driven by wind energy segment.
- We estimate that GEG's 2024F revenue of VND 2,321bn (USD 92mn; +7% YoY) and NPAT of VND 192bn (USD 8mn; +40% YoY), due to the full-year contribution of the Tan Phu Dong 1 wind energy project and the falling financial expenses. Accordingly, we estimate forward 2024F EPS of 563 VND.
- For 2025, GEG's growth potential will be (1) its ability to negotiate electricity tariff negotiations with EPTC for the Tan Phu Dong 1 project and (2) debt restructuring through the retirement of its high-yield old outstanding loans.
- GEG's share price is trading at 11,550 VND/share (P/B 0.9x) - a fairly high discount compared to its book, which reflects current gloomy outlook for GEG-owned renewable energy projects. We will update GEG's valuation in the future reports.
Vietnam's vaccine market to expand – who will benefit?
23-09-2024
: FRT
: Retailing
: Quyen Nguyen
Tags:
- We estimate that revenue of the vaccine market grew at an annual average rate of 3.1% between 2014 and 2023, reaching VND 20,010 billion (USD 794 million) by 2023. The market's growth has been supported by rising disposable income and population growth.
- During the 2024-2030 period, we project the vaccine market will continue to grow at an average annual rate of 6.9%, reaching VND 31,964 billion (USD 1,268 million) by 2030. This growth will be driven by continued increase in disposable income and sustained public interest in health and disease prevention.
- Over the past 5-7 years, Vietnam's vaccination market has seen strong participation from private sector players, including three major private chains: VNVC, Long Châu, and Nhidong 315. These private entities have addressed the limitations of public healthcare facilities, such as overcrowding, long waiting times, poor service, and vaccine shortages. Additionally, private providers meet the demand for supplementary vaccinations for diseases not covered under the Expanded Program on Immunization (EPI) and for vaccines targeting adult populations.
HAH - Expecting growth surge in 2H2024 thanks to high charter rates
20-09-2024
: HAH
: Seaports
: Quan Cao
Tags:
- In 8M2024, HAH achieved a transport volume of 391,000 TEUs (+50% YoY). International and domestic volumes stood at 129,000 TEUs (+103% YoY) and 262,000 TEUs (+33% YoY), respectively. Several factors drive this growth in container transport: (1) HAH's partnership with the shipping company ONE to tap into the Intra Asia market, (2) there are more service routes/ports compared to the SPLY, and (3) the recovery in import-export activities since 2H2023.
- In 1H2024, HAH reported revenue of VND 1,653 billion (+31% YoY, USD 66 mn) and NPAT-MI of VND 170 billion (-21% YoY, USD 7mn), completing 42% and 38% of full-year targets, and achieving 53% and 58% of our forecast, respectively. A larger profit is expected to be concentrated in 2H2024, as the vessel HAIAN OPUS began chartering in August 2024 at a rate of USD 24,000 per day, and HAIAN MIND is set to be chartered from October 2024 at the same rate. This rate represents a 60% increase over the average charter rate of USD 15,000 per day in 1H2024.
- Given positive financial results in 1H2024, we have revised our projections for 2024. We now forecast revenue of VND 3,719 billion (+42% YoY, USD 148 mn) and NPAT-MI of VND 478 billion (+24% YoY, USD 19 mn), increasing 18% and 62%, respectively, compared to our previous estimates. The strong profit adjustment is due to HAH securing higher-than-expected charter rates. Diluted EPS is projected to be VND 3,184.
- Using a combination of the EV/EBITDA and P/B valuation methods, with target multiples of 1.7x and 7.0x, we have set a target price of VND 50,600 per share for HAH in 2024. At this target price, the 2024 forecasted P/B and EV/EBITDA multiples are 1.9x and 5.0x, respectively. We recommend a BUY rating for HAH, with an expected total return of 25%, based on the closing price as of September 20, 2024.
O&G marine shipping segment in 2H2024 – “Keep up with good work”
19-09-2024
: PVT, PVP, PDV, GSP
: Oil & Gas
: Ngan Le
Tags:
The oil and gas marine transportation market includes segments for the transportation of crude oil, oil products/chemicals, and LPG. Overall, charter rates for the oil and gas transportation sector increase from mid-2022 to mid-2023 and remain relatively stable throughout 2024 due to increasing demand for transportation while vessel supply remains limited.
In 2025, overcapacity due to the increase in vessel supply is forecast to pose a risk of a cooling in charter rates. However, rates may vary depending on the type and size of vessels. Currently, new orders are concentrated in medium (Aframax, MR) and large (LNG carriers) size vessels, with almost no orders for smaller vessels (13k dwt, 20k dwt, 3,500-5,000 cbm). Therefore, we believe that charter rates for smaller vessels may remain stable in 2025.
For Vietnam's oil and gas marine transportation companies, particularly PVT and its subsidiaries (including PVP, GSP, and PDV), we expect NPAT to grow in 2H 2024 compared to 6M 2024, due to 1) active fleet expansion and 2) an increase in transportation trips for BSR. We forecast the following NPAT growth rates for 2H2024 as follow: PVT (+36% HoH, +47% YoY), PVP (+17% HoH, 48% YoY), PDV (+150% HoH, +352% YoY, boosted by ship liquidation proceeds in Q3 2024), GSP (+3% HoH, +53% YoY).
FY2024 is a blooming year for Vietnam’s O&G marine transportation segment as most of companies are forecasted to achive impressive growth in NPAT, as detail: PVT (VND 1,224 bn, +26% YoY, corresponding EPS is VND 3,233), PVP (VND 228 bn, +24% YoY, corresponding EPS is VND 2,269), PDV (VND 196 bn, +206% YoY, corresponding EPS is VND 2,966), GSP (VND 120 bn, +41% YoY, corresponding EPS is VND 1,958). Using 5-yr average P/E at 9.5x, we recommend TP for PVT stock at VND 30,700/share, equivalent to a return of 11% at the closing price on Sep 19th 2024.
Stock Market – What matters now as the Fed begins cutting rates?
18-09-2024
: VDS
: Financial Services
: Hung Le
Tags:
- The U.S. labor market is cooling down compared to the pre-pandemic period. Inflation is decreasing, but the unemployment rate is rising, though it has not yet surpassed the full employment threshold. This provides a basis for the U.S. Federal Reserve (FED) to implement moderate interest rate cuts, facilitating a soft landing for the economy. Global investors are eagerly awaiting the FED's interest rate meeting, with hopes for the first rate cut in four years. The market is focused on the potential reduction, which could be 25 or 50 basis points (bps), with 25 bps currently being the base scenario.
- Throughout history, when the Federal Reserve (FED) has cut interest rates, the U.S. stock market has responded differently depending on the severity of recessions and financial crises. Currently, the market is anticipating a "soft landing" scenario for the U.S. economy. Under this scenario, we expect the U.S. stock market to react positively following the FED's decision to lower interest rates.
- The Federal Reserve's decision to cut interest rates could have a positive impact on global financial markets, including Vietnam, in a scenario where the U.S. economy cools down without entering a recession. The correlation between the VN Index and the S&P 500 stands at a positive 0.6. Therefore, if the FED reduces interest rates and the U.S. economy achieves a soft landing, the Vietnamese stock market may indirectly benefit from international capital flows shifting towards higher-risk and higher-expected-return assets over the next 12 months.
LHG – Positive outlook from Long Hau industrial park 03 (Phase 01)
17-09-2024
: LHG
: Real Estate
: Thach Lam Do, CFA
Tags: LHG
- In 1H2024, LHG recorded revenue of VND 238 bn (USD 9.5mn, +31% YoY), mainly from land leasing at Long Hau Industrial Park 3 - phase 01 (LH3 IP), and from ready-built factory leasing (RBF). Gross profit reached VND 134 bn (USD 5.4mn, +45% YoY), and gross profit margin improved to 56%, as the margin of the industrial park leasing segment rose to 64%. NPAT reached VND 97 billion (USD 4mn, +33% YoY), equivalent to 74% of the business plan.
- For 2H2024, we expect revenue to reach VND 262 billion (USD 10.5mn, +24% YoY), driven by: 1/ VND 108 billion (USD 4.3mn, +40% YoY) from the delivery of approximately 2 ha at LH3 IP, and 2/ VND 104 billion (USD 4.2mn, +28% YoY) from RBF leasing. With stable industrial park rental prices in 2H2024, gross profit is expected to reach VND 135 billion (USD 5.4mn, +24% YoY), with a gross margin of 52%. As a result, NPAT for 2H2024 and 2024 is estimated at VND 96 billion (USD 3.8mn, +5% YoY, due to high deposit interest income in 2H2023) and VND 193 billion (USD 7.7mn, +16% YoY), respectively. The corresponding EPS for 2024 to be VND 3,850.
- Using the sum-of-the-parts method, we set a target price for LHG shares at VND 59,000 per share (with an upside potential of +59% compared to the closing price on September 17, 2024), equivalent to a BUY recommendation for long-term investment.
Update on trade growth in August 2024
16-09-2024
: VDS
: Macroeconomics
: My Tran
Tags:
- The trade balance hit a record high in August 2024.
- Electronics imports and exports can no longer maintain a steady growth rate.
- Trade growth may slow down in the first half of 2025
DBD – Expecting better performance in 2H2024
13-09-2024
: DBD
: Pharmaceuticals, Biotechnology
: Quyen Nguyen
Tags:
- DBD recorded net revenue of VND 433 billion (+5% YoY, +13% QoQ) and NPAT of VND 72 billion (+1% YoY, +8% QoQ) in 2Q2024. Although the ETC channel saw slow YoY growth, it exhibited considerable growth on quarter-over-quarter basis, driven by localization policies. Meanwhile, the OTC channel remained flat QoQ.
- For 1H2024, net revenue reached VND 817 billion (+3% YoY), while NPAT stood at VND 140 billion (-1% YoY). The ETC channel contributed VND 516 billion (+10% YoY), and the OTC channel generated VND 273 billion (-3% YoY). The slight decline in NPAT was attributed to rises in the COGS/revenue ratio and in the SG&A expenses/revenue ratio.
- We expect improving business results in 2H2024 compared to 1H2024, supported by favorable policies and seasonality.
Vietnam Sugar Market – Government support keeps domestic sugar prices high
12-09-2024
: QNS
: Sugar
: Hung Nguyen
Tags:
- As of August 2024, the global raw sugar price reached USD0.41/kg (-23.2% YoY), and is unlikely to resume its upward trend in 2024 due to a more balanced global supply-demand situation. This is largely attributed to the recovery of sugarcane production in Brazil, the world's largest sugar producer and exporter, during the 2023-24 crop season.
- Vietnam, a major sugar importer, has implemented several protective policies for its domestic sugar industry. Combined with an estimated 5% YoY increase in demand this year, these measures have kept domestic sugar prices high. As of August 2024, An Khe sugar factory's price stood at VND 20,000/kg (-3.8% YoY). With continued government support, we expect domestic sugar prices to remain relatively stable for the remainder of 2024 compared to the closing price in August.
- We note the correlation between domestic sugar price movements and the stock prices of sugar companies such as QNS is 92%. Therefore, we recommend investors monitor domestic sugar price fluctuations closely to make decisions regarding their short term and long term investments in sugar industry stocks.
Energy sector – Expecting strong earnings momentum for hydropower plants in 2025
11-09-2024
: POW
: Power
: Thang Hoang
Tags:
- We expect total electricity consumption to increase 9.5% in 2024 and 10% in 2025, which is driven by both industrial and residential demand for energy. We believe that the operation of power plants to improve in 2025.
- We maintain a positive view on hydropower companies in 2025 with the expectations of (1) strong volume growth due to La Nina cycle, and (2) the average electricity selling price for hydropower plants would hardly decline, while that could increase once EVN improve its financial performance.
