CVT – Awaiting for new high-end tiles to perform

Intense competition and delays in launching new products possibly make the whole-year targets unreachable. CVT had planned to arrive at VND 1,700 billion in sales and earnings of VND 260 billion for the year. Meanwhile, 9M’s revenue and NPAT were recorded at VND 987 billion (+15% YoY) and VND 114 billion (-12% YoY), respectively. 3Q NPAT came in at VND 41 billion (-21% YoY). The 9M slowdown came from:

• Intense competition where oversupply exists in several products such as traditional ceramics;
• A 35% increase in input prices, including coal and color glazed, which reduced gross margin from 24% to 19%;
• Heavy costs incurred for the 3^rd production line whereas operation set back.

PXS – Low earnings in 2018 is a chance to buy

PXS has just released its Q3 result with revenues down 5.7x to VND132 bn in 9M due to the shortage of new contracts. Besides, PXS cannot record revenues from the current projects like Thai Binh 2 and Song Hau 1 Thermal Power as the construction progress is too slow. On top of that, high interest expenses from a huge short-term debt aggravated the impact on net income, which was negative by VND 82 bn after 9M2018

Solar Energy in Ninh Thuan – At Rush Hour

Ninh Thuan province has favorable natural conditions and many investment incentives, so it has attracted many solar energy projects. Some of them have commenced in 2018 and are expected to generate electricity in mid-2019, promising stable cash flow to the business owner.

MBB – Updates on 3Q2018 Business Performance

MBB is amongst the banks with very positive results in 3Q2018. PBT reached VND 6,015bn, +50.3% yoy, fulfilling 88.6% of the entire year’s guidance.

We estimate that to keep the NPL ratio at 1.5% (as per MBB’s target at the beginning of 2018) and LLR at higher than 100%, MBB will need to write off about VND 1,800bn and book VND 3,178bn as provision expenses for the year. As such, provision expense in 4Q2018 is expected to reach VND 887bn. Total PBT for 2018 is forecast to reach VND 7,023bn.

MBB is currently trading at VND 21,050, equivalent to an attractive PBR forward of 1.4. This current price is about 42.5% lower than our target price of VND 30,500. We thereby reiterate a Buy rating on the stock.

PPC - Result Update on Pha Lai Thermal Power JSC

Rong Viet Securities Corporation hereby presents the Company Report on Pha Lai Thermal Power JSC (HSX: PPC) with the overall opinion as follows:

FRT – 9M Result Update

FRT posted a 9M revenue of VND 11,033 bn (+20%) and profit of 227.4 bn (+30%) yoy. The expansion of FPT Shop was quite behind the company’s plan – only opened 51 new stores, compared to 100 for the year’s target. Despite that, the 20% growth in revenue was significant, considering that the main rival – The Gioi Di Dong chain (by MWG), saw its sales only gain 2% during the same period. The difference was mainly from the two installment programs: F.Friends and Subsidy (figure 3). In 9M, F.Friends and Subsidy contributed 5.1% and 4.5% of total sales, respectively.

HAX – Optimistic 2018 Outlook

The first Mercedes cars restarted to be imported from Germany in late August. No Mercedes cars were imported so far in 2018 due to the tough requirements of Decree 116. We therefore believe that 4Q 2018 is a promising quarter for HAX’s performance.

DGW – 9M Results Update

In the first nine months, DGW posted an impressive growth in both revenue (VND 4,383bn, 62.6% yoy) and profit (VND 78.3 bn, 37.8% yoy). The mobile phone segment was outstanding (+294%) due to the contract with Xiaomi (started in 2017). Sales in Laptop & Tablet gained slightly (+3%) as the market has entered saturation, while Office equipment rocketed (+57%) because of more categories and clients. On the other hand, the new business - consumer goods (FMCG) is still at the very early stage of development.

Everpia - Update on Business Results

During the 1^st 8 months of this year, net revenue achieved VND 716.9 bn (+31% YoY), its NPAT recorded VND 55.2 bn (+26% YoY) because of the positive business results in both bedding and padding sector and the launching of its new product – cleaner (accounts for 8.3% of its revenue) in domestic market.

Update on PME’s EGM

We see this as a preparation for STADA to retain its influence in the Vietnam market, since it will withdraw from the STADA Vietnam J.V after 2019. PME members will gradually play a larger role as representatives of STADA.

HAH - Business Update

HAH’s port operations are having a tough time because the firm is losing market share to the downstream ports in Haiphong. Main reasons: (1) unfavorable position on the Cam River, (2) only one berth makes it difficult to arrange schedules. As a result, international containers’ proportion in total containers throughput of this port has declined from 73% (2014) to 46% (2017). As the price for international containers handling services is higher than domestic containers, change in this ratio also results in a reduction in GPM.

CHP – Unusual Hydrological Conditions Led to Poor Performance in 3Q 2018

Due to unusually low level of rainfall in 3Q 2018, CHP experienced another quarter of low electricity output, which may result in poor bottom line performance. Even though we expect a certain recovery in performance in the last quarter of this year, the outlook for hydrological conditions in early 2019 will remain tough for the company.