MPC – 2018 Business Results and 2019 Plan

2018 Business Results

Minh Phu Seafood Corporation recorded outstanding business results compared to 2017. Export turnover reached USD 750 mn (+ 8% YoY). Export volume reached 67,646 tons (+ 19% YoY). Revenue increased by 15% YoY, reaching more than VND 18,000 bn. PAT increased by 58% YoY to VND 1,129 bn, equivalent to an EPS of VND 8,154/share (-12% YoY).

PVT – Nghi Son will be the main growth engine for 2019

If excluding the extraordinary income in 2018, the core earning is projected to rise by 11.1%. So we keep a “BUY” rating for PVT with the target price of VND21,200 per share, equivalent to a P/E forward 9.7x.

PNJ – Update on 2018’s Result - “Mobile World” of jewelry sector

We keep a positive view on PNJ. As a leading enterprise in a highly fragmented jewelry market and consumers tend to shift to branded fashion jewelry, PNJ has the greatest advantage over its competitors due to brand awareness, retail network, production & design capacity. Appropriate strategies in both retail and wholesale segments and the huge potential growth outside of Ho Chi Minh city will help the company maintain high growth in the coming years. We maintain our BUY recommendation for PNJ stock, with a target price of VND 126,000/share.

VTP - Business update

Viettel Post is a military-owned company that postal company in Vietnam. VTP has three main operations: (1) delivery services, (2) logistics (shipping, forwarding, warehouse services) and (3) commercial trading (sell stationery, SIM cards, air tickets and phone cards).

MBB – 2018 Business Results: Thriving with top service income growth

Overall, with substantial NIM and significant service income expansion, MBB has been able to maintain a high income growth of 40.9% yoy. Thanks to a reduction in provision expense without VAMC provision burden, earnings reached an even higher growth rate, of 68.3% yoy. In the coming years, we expect that MBB’s restructuring efforts, low funding cost advantage and substantial service income growth will help the bank to achieve higher growth than the industry average.

MBB is currently trading at VND 20,700, equivalent to an attractive PBR 2019f of 1.1x. This current price is about 47% lower than our target price of VND 30,500. We thereby reiterate a Buy rating on the stock.

Updates on Vietnam’s Financial Market

As being mentioned in the yearly strategy report, geopolitical risk, highlighted by US-China relations and EU fragmentation, plays an important role in the world. The good news stemming from softer talks between the US and China are making significant contribution to the improvement of Vietnam’s financial market. Short-term interest rates stop to go up while net buying foreign investment flow was reported.

HAX – Update on 2018’s Business Result

Thanks to benefits from the difficulties in the automobile market as well as relatively high incentives from MBV, revenues and NPAT of HAX in 2018 reached VND 4,756 billion (+24% YoY) and VND 98 billion (+16% YoY), respectively.

DGW – Update on 2018’s Business Result

Ending the year of 2018, DGW posted an impressive business result: VND 5,943 bn (+56% YoY) in revenue and VND 109 bn (+39% YoY) in NPAT, completing 126% and 108% of 2018’s plan, respectively. The company plans to grow 20% in revenue and 25% in NPAT for 2019 with two growth engines: Mobile phone and Office equipment.

The Trend of Overseas Long-term Loan Facility Agreements

In recent years, the trend of securing long-term loan facilities from international financial organizations has become more popular amongst Vietnam banks. Vietnamese banks have been upgraded by international rating agencies such as Moody and Fitch. The positive ratings, according to Fitch, considers the Vietnamese banking system's enhanced operating environment, with improved economic policies.  Authorities promote a stable and predictable macroeconomic environment. We believe that these favorable conditions have contributed significantly to Vietnam banks’ chances to get into more loan facility deals with international financial organizations.

An Overview of Iron Ore Supply and Demand

Iron ore and Steel scraps are the two main raw materials for the steel industry and the changes in these inputs price would affect significantly the business performance of the steel mills. Driven by the supply and demand forces, understanding the key players in both sides would give the investors a better view in order to forecast the trend of the steel industry. The market share of suppliers and buyers in this industry is highly concentrated when China accounted for two-thirds of the global iron ore import annually and on the opposite, there are only two nations in charge of 70% world ore export (2017), which are Australia (50%) and Brazil (21%). As a consequence, any news affected the steel industry from these countries would impact the global price of iron ore strongly.

PPC – Update on 4Q 2018 Business Performance

Thanks to favorable market conditions and lower major overhaul expenses, PPC had a surprising performance in 4Q 2018: The PBT is estimated to reach VND 363 billion, about 3.6 times as high as that of 4Q 2017. Moreover, the company achieve this result without the one-off income from the reversal of financial expenses from FX differences in 2016.

Update on Industrial Parks

Vietnam is appealing for various reasons including geographical advantages and close proximity to China, enabling road transport. Further, no industrial zones are deep inland and the key ones are tied with seaports, underpinned by increasing investment in infrastructure.