HSG- AGM Updates

Hoa Sen Group JSC (HSX-HSG) went through a tough financial year, according to the company’s management, achieved growth in volume and revenue but its NPAT was lower than the annual target due to unfavourable steel price movements. The company also sets the NPAT growth for FY2017-2018 at only 1%, saying that it needs to accept lower margin to face up with the fierce competition in the coated steel sheet market.

Consumer electronics retail outlook

The consumer electronics retail was once a “delicious cake” for not only big corporations but also small private stores. However, by now, it has probably passed the golden times and is starting to slump. Major retail chains such as Mobile World, Blue Appliance, FPT Shop, Nguyen Kim are acquiring overwhelming market shares compared to mom-and-pop stores. The trend for now and onwards is the promotion of big chains to acquire more share and by that, increase market concentration. 

Changes in the China paper industry’s policy and their impact on the Vietnam paper industry

China paper industry will see great changes in 2018 as its government officially adopts new policies. We believe these policies’ changes will have a positive impact on paper companies in Vietnam.

Draft Amendment of Decision 87/QD-UBCK and the Viewpoint from Kelly Criterion

On the afternoon of January 12, 1818, the SSC sent a document to the securities companies to comment on the draft amendment of Decision 87 / QD-UBCK. Accordingly, the SSC plans to increase the initial margin from the current 50% to 60%. We think this could create both postive and negative effects:

Green Grocery and success model of Alfamart from Indonesia

As seen in Mobile World Group’s (HOSE: MWG) report on business result in 11 months of 2017, Green Grocery contributed VND1,194 billion to total revenue of VND58,964 billion (made up 2% revenue). Even though the breakeven point was reached in Q4 with gross profit margin of 14%, Green Grocery might still suffer a loss of VND119 billion in the whole year of 2017. This chain will start contributing to MWG’s profit from 2018 onwards, especially in Q4 2018. This will be the most promising segment of MWG in the near future considering that mobile phone market is almost saturated and electronic devices market is also slowing down in growth.

Viglacera – Business result update

Viglacera – Business result update

Viglacera announced its business result in 2017. The combined pre-tax profit of the corporation was VND1,019 billion, representing 112% of the full year target. Total combined revenue was VND 16,486 billion, which saw an increase of 13% compared to 2016. As our report in November 2017, we estimated that revenue and NPAT-MI in 2017 will be VND8,800 and VND750 billion, respectively.

M10 – Mismatch Between Efficiency and Stock Price

Garco 10 Corporation (UPCOM:M10) is among the top large textile companies in Vietnam, mainly aiming for American and European customers. Although its income still depends heavily on processing garment orders for foreign brands (accounting for 89%), it has an outstanding brand name (May 10) and owns a chain of five M10Mart fashion shopping centers, all of which are located in northern Vietnam.

9M2017 Non-life Insurance Statistics

The data from ISA showed that after 9M2017, non-life insurance sector recognized a total premium of VND30,154 billion (+12% YoY).

HDB: A New Banking Listed on HSX

Nearly 981 million shares of HDB was officially listed on the HSX. HDB owns 50% HD Saison, the third largest consumer financial company of Vietnam (in terms of market share, following FE Credit and Home Credit). Therefore, the listing of HDB draw attention of investors, with over 32.2 million shares transferred in its first session. At the closing price of VND 39,600 per share, HDB's market cap was more than VND38,847 B, in the group of top 20 largest market cap stocks on the HSX.

An Overview on Brokerage Firms in 9M2017

An Overview of Brokerage firms' business results in 9M2017

Vietnam Interest Rates in 2018

Large-cap companies can take advantage of attractive cost of loans via the capital market’s goods, especially bonds. Recently, there is a significant drop of yields of Vietnam government bonds (VGBs) whose average borrowing rates decreased from 6.28% in 2016 to 6.21% in 2017. It comes as 1) inflation is under control at 4%, 2) Vietnam’s 5Y CDS has been keeping the down trend since 2014 and 3) foreign investors are looking for high-yield assets.

PV Power - Catalysts for Short and Intermediate-Term Growth

With 2017 estimated after-tax profit of around VND2,261 billion and IPO bidding price at VND14,400 /share, we expect PV Power’s P/E to be at 17.3x, relatively high compared to Vietnam’s current industry average (about 10x). However, the companies also owns catalysts to ensure CAGR in the next five years of about 17% to justify its high P/E ratio.