AGG – A company with potential land bank in HCMC
01-08-2023
: AGG
: Real Estate
: Thach Lam Do
Tags:
- In 2Q2023, AGG recorded revenue of VND 1,676 bn (or USD 70.7mn, -38%YoY), due to the handover of ~650 apartments in the Westgate project (the apartment project in Binh Chanh district, HCMC). The gross profit reached VND 389bn (USD 16.4mn, -27%YoY), and the operating profit VND 122bn (-50% YoY, operating margin decreased to 7%). Owing to lower financial expenses and income from a penalty payment, AGG had net profit-after-tax-and-minority-interest (NPAT-MI) of VND 133 bn (-22%YoY) in that quarter. The 1H23 NPAT-MI reached VND 81bn (-33%YoY), which met ~81% of the business plan.
- For FY2023, the company plans total revenue to reach VND 3,000bn (USD 126.6mn, -52%YoY), mainly coming from the handover of ~1000 units of the Westgate, and the NPAT-MI of VND 100bn (USD 4.2mn, +427%YoY). We expect that the company can meet its 2023 business plan, supported by: 1/The 04 blocks of the Westgate have been completed, including the landscape (swimming pool, central park), and 2/ The company fulfilled 81% of its 2023 business plan after the first six months of the year.
- In term of sales plan, the company will launch the Gio project - a mid-end apartment project in Binh Duong - with total units of 3,000 and price range of VND 1.8-2.5bn/unit. Per the company, it has already got the construction permit and sales will commence in 4Q23. Given that the offered price is affordable and the project’s location is favorable, we expect that the market can absorb ~40% of total units, with expected 2023 pre-sale value of VND 2,640bn.
- AGG is trading at a PBR of 1.6x, which is equivalent to peer’s PBR of 1.7x and its 3Y average PBR of 1.8x. The stock price has begun to priced-in the potential from their current projects (the Westgate, the Standard, the Gio). The legal status completion of Binh Chanh, however, can be the potential up-side factor asset values.
CMG – 2023 AGM Update
31-07-2023
: CMG
: Technologies
: Tung Do
Tags:
- For fiscal year 2023 (ends 31/3/2024), CMG plans two growth scenarios for NPAT at 15% YoY (base scenario) and 21% YoY (target scenario)
- The Global Business Division set the highest profit growth target with the respective rates in the two scenarios of 59% YoY and 62% YoY, thereby making an increasingly crucial contribution to the group's profit structure (nearly 40% of PBT of 2023). Meanwhile, Digital Infrastructure Division - the main profit pillar of the Group - aims to grow profit by 19% YoY-22% YoY in 2023
- CMG plans to invest with a total scale of nearly VND 2 trillion in 2023, equivalent to nearly 30% of total assets, focusing on expanding the scale of digital infrastructure and building creative space complexes (CCS) in Hoa Lac, Hanoi and Tan Thuan (HCM).
- CMG is a remarkable option to participate in the sustainable growth of the IT industry, which is driven by the increasing DX adoption of businesses in Vietnam as well as globally. The current P/E 2023F/24F valuation of 20.0x/15.2x may have fairly reflected the Group's profit growth potential this year (2023F: +19% YoY). Therefore, the current valuation is more suitable for long-term holding as the 3Y CAGR of NPAT is 27%. The current target price of VND 46,800 is under review
FMC – Q2 2023 profit fell short of expectations, but 2H 2023 recovery outlook remains unchanged
28-07-2023
: FMC
: Fishery
: Loan Nguyen
Tags: Result Update
- In 1H2023, net revenue and NPAT-MI stood at VND 2,041 bn (or USD 87 mn, -26% YoY) and VND 115 bn (or USD 5 mn, -26% YoY) respectively. The outcome fell slightly below our earlier forecast due to a slower-than-expected recovery in Q2.
- Revised FY2023 forecasts: Net revenue expected at VND 4,900 bn (USD 208 mn, down 14% YoY), and NPAT-MI at VND 305 bn (USD 13 mn, down 1% YoY), compared to the previously anticipated single-digit growth of the latter.
- We revise up our target price to VND 53,000/share, an 18% increase driven by (1) Rasing PE target to 9x from 8x in consideration of a brighter outlook in 2H 2023 & 2024; (2) Rolling valuation to mid-2024; (3) Adjusting down WACC from 13% to 11.8%. This TP reflects a 2023/2024 PE ratio at 11.4x/8.9x, corresponding to 2023/2024 EPS at VND 4,625/5,943. We recommend ACCUMULATING this stock with an upside of 10%.
Update on monetary market in July 2023
27-07-2023
: VDS
: Macroeconomics
: Ha My
Tags: Monetary market
- Interbank interest rates fell to the lowest level since January 2021.
- Credit accelerated in June 2023, in line with the seasonal effect of spurring credit growth at the end of each quarter.
- The corporate bond trading system comes into operation: the first step to restoring confidence
Credit growth in relation to GDP growth
26-07-2023
: VCB
: Banking
: Chi Duong
Tags: banking
- As of June 30, 2023, credit balance reached VND 12.49 quadrilion, increasing by4.7%compared to last year,which isstill far from the target of 14% for the whole year of 2023. At the same time, GDP growth in the first sixmonths recorded only 3.7%,which is also far from the target of 6.5%for the whole year.
- According to the estimate over the past 10 years, the credit growth in the last six months compared to the first six months in the year reached an average of 7.4 % in a period from 2013 to 2022 (the highest number was in 2014, which reached more than 10%). Service, trade and construction sectors always have the highest demand for credit growth , with the average growth rate of the second half of the year compared to the first half of the year being 11.6% , 7.2% and 9.3%, respectively. We believe that the ability to absorb capital by the trade and construction sectors is currently facing many difficulties due to the demand that has not really recovered plus the congestion from the real estate industry. The capital absorption capacity of the economy for the whole year 2023 is estimated at 12%.
- The highest contribution to GDP growth during the 5-year period was the service sector with an average of more than 44%, followed by the industry sector with an average of more than 31%. Therefore, in order to achieve the best GDP growth, credit needs to flow strongly into these two industries by the end of 2023.
MML - The ability to complete the 2023 business plan is high
25-07-2023
: MML
: Food, Beverage & Tobacco
: An Nguyen
Tags:
- In Q1 2023, Masan MEATLife JSC (UPCOM: MML) announced net sales of VND1,600 bn (+3.1% QoQ; +71.8% YoY). Revenue growth came from the effectiveness of the partnership with WCM and the consolidation of the processed meat segment into the business. Meanwhile, NPAT-MI continued to record negative growth for the fourth consecutive quarter at VND-168 bn (+1.2% QoQ; -168.9%YoY) due to a sharp increase in selling and interest expenses.
- MML's gross margin may decrease as an increase in live hog prices will increase input costs. Meanwhile, MML is implementing a selling strategy to compete on price compared to traditional meat and has no plan to increase selling prices in 2023.
- Based on the expectation that the economic recovery will lead to higher consumer spending on essential products such as meat, we believe that MML will complete its 2023 revenue and profit targets thanks to 1) consolidation of the processed meat segment; 2) the effectiveness of the competitive pricing strategy; and 3) the partnership strategy which boost sales on the WCM channel. Meanwhile, profits are expected to continue to record negative results, however, improve from 2022 thanks to economies of scale advantage.
Fertilizer update – Selling prices may keep stable while supply is no longer a concern
24-07-2023
: BFC, DPM
: Fertilizer
: Ngan Le
Tags:
- Pre-India tender will likely give short-term optimism on global urea prices.
- Supply is no longer a concern.
- With low domestic prices, there is a chance for producers to improve sales volume. But the risk from low-price imported urea still exists.
SCS – Q2 2023 Results closely in line with our expectations
21-07-2023
: SCS
: Aviation
: Tung Do
Tags: Aviation SCS
- SCS announced Q2-2023 results with revenue and NPAT of VND 172 billion (-17% YoY) and VND 129 billion (-16% YoY) respectively, in line with our expectations with previously expected revenue and EAT of VND 175 billion and VND 129 billion.
- In 6M-2023, revenue and NPAT reached VND 334 billion (-26% YoY) and VND 242 billion (-29% YoY), respectively, fulfilling 45% and 47% of the full year forecast.
- For 2023, revenue/NPAT/EPS is forecast at VND743 billion (-13% YoY)/526 billion (-19% YoY)/VND5,220. For 2024, revenue/NPAT/EPS is forecast at VND817 billion (+10% YoY)/579 billion (+10% YoY)/VND5,790.
- We adjust the TP for SCS to VND 75,000/share as we begin to incorporate 2024F net profit into our valuation model and reflect the recovery outlook in trade flows and SCS’s air cargo throughput in next year. Combined with a 9.3% cash dividend yield, the total expected return is 17%, we reiterate the ACCUMULATE recommendation. As of July 20, 2023, SCS is being traded at a P/E 2023F/24F of 14.2x/12.8x.
GMD – Need more time for the recovery as the macro context does not support
20-07-2023
: GMD
: Seaports
: Quan Cao
Tags:
- Forecast for Q2-FY2023, revenues and NPATMI are respectively VND 965 million (+7% QoQ and -1% YoY) and VND 235 million (+16% QoQ and -18% YoY). Compared to the previous quarter, revenues improved based on the recovery in volume, the GPM will slightly decrease because of the depreciation of NDV phase 2, but NPATMI will grow by double digits as GML is expected to be profitable again.
- For 2023F, net revenue and NPATMI are respectively VND 3,781 billion (-3% YoY) and VND 2,396 billion (+148% YoY), in which, core operating profit is VND 796 billion (-27% YoY) and VND 1,600 billion from divestment of Nam Hai Dinh Vu port (NHDV). EPS is 7,313 VND for 2023F.
- We used Sum-of-the-parts method (SOTP) to provide a one-year target price of 63,400 VND. Combined with a cash dividend of 2,000 VND, equivalent to a total expected return of 15%. We recommend to ACCUMULATE.
Vietnam automobile sales are expected to be brighter in 2H2023
19-07-2023
: HAX, CTF, PTB
: Automobiles
: An Nguyen
Tags: Automobile sales 2H2023 outlook
- In Jun-2023, sales of passenger cars (PCs) reached 16,572 units (+18.9% MoM; -24.9% YoY). The imported car number also presented positive growth of +18.4% MoM to 9,006 units. We believe that the positive MoM growth is a good indicator for the recovery of sales in 2H2023 on the back of favorable business conditions.
- Given upcoming favorable business conditions with issued buffer policies and the completion of road infrastructure projects, 2H2023 is turning out to be a better time for automobiles consumption than 1H2023. We calculate that the strong sales of 2H2023 will compensate for the weak sales of 1H2023, resulting in stable sales compared to the 2022 results.
- Due to the weak sentiment regarding the economic outlook in Q2 2023, we expect that results of Vietnam’s automobile distributors will suffer. However, we suppose that the picture for 2H2023 will reverse compared to 1H2023. The combination of lower registration fees and higher demand will help these companies to save costs, resulting in improved profit margins.
Update on trade in 6M2023
18-07-2023
: VDS
: Macroeconomics
: Ha My Tran
Tags:
- Trade surplus hits record high in 6M2023.
- The quarterly growth trend is a positive indicator of external demand.
- Export prospects from the US & China markets.
Money supply
17-07-2023
: VDS
: Macroeconomics
: Bernard Lapointe
Tags:
- Money supply trends are not currently market friendly.
- Broad money growth momentum in G7 countries, and elsewhere, is weak, at best
01-08-2023
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