FPT Retail- Three New Challenges for FPT Shop

Investors interested in retail stocks will have more options when FPT Retail (FPT Retail) is going to be listed. FPT Retail is going to issue share dividends to raise its chartered capital to VND400 billion and plan its listing before April 30, 2018. While the opening of new stores will no longer be a key strategy from 2019, FPT Retail has launched three new key business strategies to increase revenue per store - a key indicator of the retail business.

Construction Steel Market in The South: Waiting for Major Changes in Market Structure

In the economic conditions favorable to the real estate, construction and building materials sectors, the construction steel industry in Vietnam achieved double growth of 24.1% in the 2013-2016 period in terms of total consumption. Particularly in the South, construction steel consumption increased by 30% in 2015 and 2016; In 9M2017, the southern market achieved sales of construction steel over 2 million tons, up 23.5% over the same period.

Looking at the expansion plans of the four largest players, we see no major projects to anticipate the demand growth of construction steel demand in the South. Vinakyoei, a Vietnam-Japan steel joint venture, after completion of the project of 1 million tons of steel per year in 2015, has not announced any plans to expand. Sunsteel and Pomina tend to expand to flat steel as Sunsteel's latest project is a galvanizing plant with a capacity of nearly 400,000 tons per year, while Pomina, in addition to a steel rolling mill of 500,000 tons, also entered the flat steel segment with a plating capacity of 600,000 tons per year. While the South Korean FDI Posco has exported more than 30% of its output and Formosa Ha Tinh has only sold more than 53,000 tons of steel in the southern market in the first nine months of the year, we believe there is a need for sizable steel factories similar to HPG and TIS projects in the North to increase the size and extend the production process to reduce the cost of capital, while taking advantage of the geographic advantage to increase coverage in the South.

Wholesale Adaptation To Changing Electronic Device Market

When there is an increasing amount of big retailers capable of directly buying products from the manufacturers, or when the manufacturers themselves enter the retail market and establish their own physical and online stores, the traditional value chain of electronic device market (manufacturer -> wholesaler -> retailer -> end customer) is threatened to change to where there is no more place for wholesalers.

FPT Result Update – Company Report Release on 29/11/2017

RongViet Research has just released Q3 2017 Result Update Report on FPT Corporation JSC (HSX:FPT) with the following overview and recommendation:

We remain optimistic on the stable growth achieved by FPT’s two core businesses, Technology and Telecom, which was discussed in our previous FPT Company Report. The divestments can be a strong catalyst for FPT share price in the short term as the deals are successfully concluding as expected. In the long term, regarding FPT valuation, the company’s FCFF analysis shows a remarkable stability in cash generation and P/E ratio for 2018 can be revised owing to the higher contribution of Telecom and Technology, which have P/Es that are higher than those of the divested businesses.

Quick Updates on VNR’s Business Performance

Reinsurance market was unfavorable in 3rd quarter, which caused some difficulties for VNR.

CHP – Waiting for New Growth Phase in 2019

At the moment, it can be seen that FY2017 is the peak in operation of CHP and 2018 business results may witness a relative decline. However, given high potential upside in stock valuation and strong growth prospect in business results from 2019 onward, we believe that 2019 would reveal some good opportunities to accumulate CHP at favorable prices.

Q4/2017 ETFs’ Reconstitution Forecast

2 foreign ETFs will reconstitute their portfolios in December. 

Viglacera – Industrial Parks bring bright prospect

Viglacera – Industrial Parks bring bright prospect

PC1 – Power Construction Segment as Growth Driver in Q4 2017

Although business results were not so impressive in the first three quarters this year, with net income to parent company’s shareholders of VND180 billion (-31% YoY), PC1 is still confident that it could achieve its earnings target this year, thanks to the strong growth of its power construction segment and the contribution from hydropower segment.

Framework for Analyzing the Pace of Technology Substitution

An indispensable part of corporate analysis is evaluating the trend and potential of a business product. Kodak, Nokia were once successful companies until they failed to catch up with the development of modern technologies – digital cameras and smartphones. In these cases, the analysis requires an accurate estimate of the pace of technology substitution. According to the authors of Harvard Business Review, this pace does not necessarily depend on the technology itself but on the ecosystem associated with it.

October Trade Preview: Trade Surplus to Maintain This Year

• Vietnam trade surplus surprised on the upside in October.
• Exports of electronic products were responsible for more than half of the headline exports growth.
• Imports of the domestic sector slowed down, resulting in an overall trade surplus.
• 2017 trade surplus is estimated at around USD2 billion.

Is Current PE of the VNIndex Overpriced?

The VNIndex officially surpassed 900 points. In the most optimistic scenario, perhaps not many investors think to this level when the VNIndex still closed at 664.87 points by the end of 2016. Until now, it has increased 35.8% YTD and is one of the best bull markets in the region. The fact that foreign capital flows into the market nearly 14,000 billion this year has partly shown the attractiveness of the Vietnam stock market.