SVC - Business Performance Was Strong in 2018 But Lower in 2019

SVC finished the 2018 fiscal year with an impressive growth in NPAT-MI. However, turning to 2019, we believe that earnings outlook of the company will be more challenging due to fierce competition among dealerships.

Declining Steel Imports- Local Supply Side’s Efforts

According to the Vietnamese Customs, the import of iron and steel into Vietnam has been decreasing. Vietnam imported 1.1 million tons of iron and steel every month in 2018, 12% lower than 2017 and 27% lower than 2016. This is considered a remarkable achievement for a period as the domestic steel industry has made progress regarding both scale and value chain.

BWE – 2019 AGM Update

BWE finished the 2018 fiscal year with a strong growth in its performance. Turning to 2019, the company targets a 10% YoY increase in its revenue and PBT. In the long term, we believe that the company has ample potentilas to grow.

Updates on HDC

Ba Ria - Vung Tau House Development JSC (HSX: HDC) recorded impressive results in FY2018 with revenue of VND 715 billion (+74% YoY) and NPATMI of VND 105 billion VND (+30% YoY). The growth was driven by real estate (RE) segment with 76% of total revenue and 85% of gross profit. During the year, HDC has seen a 90% growth in RE sales, mainly coming from:

Residential industry updates

The CBRE report has recently updated the overall performance in condominium market in both key markets, including Hanoi and Ho Chi Minh cities. The figures were improved in the last quarter, however, the whole year’s results were still getting worse than 2017’s performance.

Without Youtube MCN’s revenue, what would Yeah1 have left?

Starting from the television business, since 2015, Yeah1 (YEG) has expanded to digital arm with two main platforms: YouTube and non-YouTube (Google, Facebook). The recent incident about YouTube terminating the Content Hosting Service Agreement (“CHSA”) with YEG will cause the company to lose its revenue share from its YouTube third party/partners’ channels (from March 31st, 2019). Let’s take a look at the company’s remaining businesses.

DBD – Rising competition requires changes

DBD is trading at VND 43,000/share, equivalent to 15x trailing P/E and 2.5x P/B. Fundamental wise, the stock seems to be fully valued.

ACB – Reviewing 2018 business results

ACB finished its restructure phase in 2018 with a brilliant results. Healthy growth in its tradition banking, couple with extraordinary income from bad debt written back and lower provision expense pushed net earnings to grow approximately 143% YoY to VND 5,137 Bn in 2018.

Review on 2018 Performance of some Listed Banks

In this note, we would like to highlight some of the key points regarding the performance of some listed bank in 2018 and their outlook for 2019.

After today’s strong rise of banking stocks (March 12), we see that VCB, BID and MBB are currently trading at a premium valuation, while ACB is current trading at a fair valuation compared to the last three years. We consider MBB’s current PBR of 1.4x, despite higher than historical valuation, still quite attractive given the bank’s strong grow outlook and healthy financials. The positive point is that, the ratio of MC/Deposit of these banks has dropped to a much lower level than that in the last three years, except for CTG.

Interbank Interest Rates Dropped

While geopolitical issues are softening and economic policies, including fiscal and monetary, are converting into the loosening phase, pressure on the banking system’s liquidity are dropping. The interbank interest rates showed signals of early plummet after skyrocketing for last 6 months.

AST – Update 2018 Result and 2019 Outlook

AST ended 2018 with the growth of pre-tax profit from core operations reached 34%.

Impacts from China’s Slower GDP Growth

When the trade tension between the US and China is temporarily easing, the market is paying significant attention to the forecast of slower global GDP growth. Most of international institutions foresee global economy will be weaker since 2019. Specifically, the key point is related to China’s economy, the major momentum of global economy for over 2 decades. China’s manufacturing PMI gradually dropped and stood below the 50 threshold. The number of new orders and output slightly increase in February 2019.