Trade in 4M2023: Short-term outlook was gloomy
15-05-2023
: VDS
: Macroeconomics
: Ha My
Tags: Trade
- Trade has yet to flourish.
- Last month's recovery was only temporary.
- The export outlook in the short term will not improve much
IMP - Results will rise substantially by the convergence of positive factors in 2023
12-05-2023
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: IMP
- In Q1/2023, IMP's net revenue and PBT were VND 479 billion (+53% YoY) and VND 99 billion (+50% YoY), completing 27.4% and 28.3% of the 2023 target. In which, The ETC and OTC channel revenue were VND 178 billion (+241% YoY) and VND 297 billion (+15% YoY), respectively. Q1/2023 revenue and PBT are both completing 23% of our latest 2023 forecast.
- IMP has set a plan for net revenue and PBT of VND 1,750 billion and VND 350 billion respectively, increasing by 7% and 20% compared to 2022. IMP's growth driver in 2023 could come from the contributions of two factories IMP2 and IMP4.
- We adjust up our forecast for net revenue and NPAT at VND 2,110 billion (+28% YoY) and VND 346 billion (+48% YoY), respectively, of which ETC and OTC revenue are VND 964 billion (+58% YoY) and VND 1,075 billion (+14% YoY), EPS for 2023 is VND 4,413 (+43% YoY). We increase our target price to VND 65,800/share, equivalent to a forward P/E valuation of 12.75x that is lower than the 5-year average P/E of 17x. We maintain our ACCUMULATE recommendation on IMP.
KBC – Never been as good as the present
11-05-2023
: KBC
: Industrial Land RE
: Hung Le
Tags:
- KBC’s net revenue reached VND 2,223 billion (USD 96.7 million) in 1Q2023, up 221% YoY. After-tax profit of the parent company reached VND 940 billion (USD 40.9 million), up 96% YoY. The main driver of KBC’s revenue growth was the IP (Industrial Parks) leasing segment, which reached VND 2,077 billion (USD 90.3 million), up 555% YoY. Another driver for KBC’s earnings growth came from financial income, which reached VND 155 billion (USD 6.74 million), up 427% YoY thanks to KBC’s recognition of a profit of VND 108 billion (USD 4.70 million) from divesting the real estate project (Meridian Tower).
- KBC is more confident in its 2023 business guidance due to robust earnings in 1Q2023 and a huge balance of customer deposit as well as prepaid revenue. Total 2023 revenue was revised to VND 9,089 billion (USD 395.17 million) and NPAT to VND 4,098 billion (USD 178.18 million), +59% change compared to the previous forecast. The revised 2023 EPS will be at VND 5,399.
- Based on the sum of the parts methodology (SOTP), we revised the target price up to VND 31,000/share compared to the previous valuation as we (1) revaluate Trang Due 3 IP project when the general planning of Hai Phong city in the 2021-2023 period is approved sooner than expected, which is a key element for project to get investment policies approval. We expect the company to have the policy approval in 3Q2023. Besides, (2) we count Tan Tap and Loc Giang based on assumptions that these projects can be leased from 2025. The total expected return in the next twelve months will be +11. 5% (based on the closing price of May 10th, 2023).
NT2 – Strong Q1/2023 earnings because of increased output and lower gas price
10-05-2023
: NT2
: Utilities
: Hoai Trinh
Tags: NT2
- NT2 reported its Q1/2023 business results with total electricity output of 1,075 mn kWh (+9% QoQ, +8% YoY), while input prices decreased slightly, averaging 8.9 USD/mn BTU (-5% YoY). Revenue and NPAT were recorded at VND 2,183 bn (+9% YoY) and VND 234 bn (+47% YoY), respectively.
- NT2’s Q1/2023 performance is in line with our expectations. However, we reduce our estimates of electricity output for FY2023 to 4.1 bn kWh (+0.7% YoY) as (1) major maintenance in Q3 (from September 17th to the end of October), and (2) Qc mobilized in August is expected to be 86% lower YoY.
- For FY2023, due to a major maintenance plan, we lower our NT2’s net revenue forecasts to VND 8,417 bn (-4% YoY), assuming (1) output of 4.1 bn kWh (+0.7% YoY), (2) average gas price of USD 8.9/ mm BTU (-6% YoY), (3) A reimbursement for realized FX loss of VND 155bn expected to receive in Q4. NT2’s maintenance budget of VND 407 bn is scheduled to be amortized over three years. As a result, we forecast NT2’s NPAT to be VND 712 bn (-19.4% YoY), corresponding to an EPS of VND 2,436/share.
- We have a NEUTRAL rating with a one-year target price of VND 29,700/share. With an expected cash dividend of VND 2,500/share in the next 12 months, total return is determined at 3% based on the closing price on May 10th, 2023.
TCB – Awaiting recovery from the second half of 2023
09-05-2023
: TCB
: Banking
: Thao Nguyen
Tags: 1Q23 results update
- In 1Q2023, TCB’s PBT reached VND 5.6 tn (or USD 0.2 mn), -17% YoY and +18%QoQ, continued to be affected by net interest income (-4% QoQ and -20% YoY) while the burden from credit costs showed sign of mitigation on a quarterly basis. Credit growth and deposit growth reached 9% YTD and 11% YTD, respectively. CASA kept plummeting to 32% in 1Q2023 from 51% at the end of 2021. Both retail and corporate CASA decreased by 6% QoQ while term deposit grew by 17% QoQ, resulting in a 69bps QoQ rise in funding costs.
- NPL ratio was maintained at the low level of 0.85% in 1Q23 compared to 0.91% in 4Q22, yet was 18 bps higher than that of the same period last year. Credit cost margin (TTM) recorded roughly 0.54% in 1Q23, increasing from 0.45% in the last quarter yet was lower than that of 1Q22 and the previous period. As a result, the provisioning buffer has been in a steady narrow downtrend since 2021 and 2022 to reach 134% in 1Q23, yet still among the industry’s top-tier positions.
- We expect NIM and net interest margin to recover toward year-end as interest rates have trended down from the end of March. 2023’s PBT and book value are forecasted to be VND 26,633 bn (or USD 1.1 tn, +4.2% YoY) and VND 38,068, respectively. We reckon that the current valuation has reflected TCB's risks related to corporate bonds and the bank's gloomy outlook for 2023, with a current PB of 0.9x. Our current target price is VND33,000 and we will update our new target price when positive signals emerge from Vietnam's economic growth landscape. Long-term investors who prefer bank stocks may consider accumulating TCB when the market experiences strong corrections.
MSN – Lower-than-expected consumption puts more pressure on 2023 performance
08-05-2023
: MSN, MCH, MSR, MML
: Retailing, Consumer Staples, Food, Beverage & Tobacco
: An Nguyen
Tags:
- In Q1 2023, Masan Group (HSX: MSN) posted net sales and NPAT-MI of VND18,706 bn (-9.3% QoQ; +2.8% YoY) and VND215 bn (-73.3% QoQ; -86.5% YoY), respectively. The high double-digit negative growth of the bottom-line is due to higher SG&A/Sales ratio; lower profit contribution of Techcombank; and the surge of interest expenses.
- Because Q1 2023 was strongly lower than our forecast, we adjust down the 2023 performance prediction. The 2023 revenue, NPAT Pre-MI and NPAT-MI are predicted to be VND78,348 bn (+2.8% YoY), VND2,413 bn (-49.2% YoY) and VND1,372 bn (-61.5% YoY), respectively. The equivalent EPS will be VND963 (-61.5% YoY).
- Based on SoTP valuation, we downgrade MSN ‘s target price to VND85,000 per share from VND101,400 per share of our previous forecast in Mar-2023. We recommend to ACCUMULATE MSN shares for long-term investment with the 12-months total expected return of +14.7% compared to the closing price of VND74,100 on May 08th 2023.
PVP – higher crude oil tanker rate is the main growth driver
05-05-2023
: PVP
: Oil & Gas
: Vu Tran
Tags: attractive valuation higher charter rate results update
- PVTrans Pacific (PVP) mainly supplies crude oil transportation service and FSO Dai Hung Queen for serving crude oil exploration at Dai Hung Oilfield. In addition, PVP also commercially operates two vessels: PVT Hera and PVT Mercury for its parent company – PVTrans (PVT).
- Due to the Russia – Ukraine War, crude oil tanker freight rates have experienced a strong increase since 2H2022. Following that, the Apollo’s T/C rate has improved from 10,000 USD/day to the current 30,000 USD/day. In May, Apollo will be rewarded with a new T/C contract with an average rate of 37,000 USD/day to 40,000 USD/day.
- Not only benefit from a higher freight rate for crude oil transportation, PVP also maintains a stable cash flow from the bareboat contract of FSO Dai Hung Queen. The new contract for FSO Dai Hung Queen was renewed at the end of 2022 with the same terms as before.
- 2023 earnings can reach VND210 bn, equivalent to the 2022 level despite the abnormal profit from liquidating Athena. EPS 2023 will be VND2,120 and PVP share is being traded at a 2023 P/E of 5.8x. In the long run, there are two attractive points (1) fleet expansion (2) cash dividend of VND1,000 per share ~ dividend yield of 8.2%. In our view, the investor can accumulate at this current price.
ELC – Q1-2023 Business Results Update: Weak profit due to low large projects delivery
04-05-2023
: ELC
: Telecommunication Services
: Tung Do
Tags: ELC
- Q1-2023 revenue reached VND 86 bn (-58% YoY) and NPAT-MI down to VND 4 billion (-67% YoY), only completing 10% and 6% of the 2023 guidance respectively.
- For 2023, ELC sets a revenue target of VND 850 bn (-2% YoY), lower than our current forecast of VND 1,100 bn, while net profit target is VND 56 bn (+51% YoY), relatively in line with the forecast of VND 54 bn. Given the project-based nature of the business model, we expect ELC’s Intelligent Transportation System (ITS) segment to record a good profit in Q2-Q3/2023 following the Nha Trang - Cam Lam expressway completion (May 2023), the ITS component of which is constructed by ELC.
- The current forecasts and target price are under review.
There is a diversification in 2023 business targets of Vietnamese tire producers
28-04-2023
: DRC, CSM, SRC
: Automobiles
: An Nguyen
Tags:
- From the documents of the 2023 Annual General Meeting of Shareholders of Vietnamese tire producers, we see a diversified picture in business targets. Although tire consumption in both the domestic and export markets is forecasted to be weak in 2023, we see that companies keep investing on production activities.
- We suppose that there is a two-sided effect on gross margin of Vietnamese tire producers in 2023, including positive and negative. On the positive side, raw material costs are predicted to decrease in 2023. On the the negative side, we see a signal of decreasing selling prices, resulting in a risk of lower gross margin.
- In the context of decreasing logistic costs since the beginning of 2023, we suppose that this is a positive contributor for the bottom-line of Vietnamese tire producers. However, we suppose that the positive effect would not be strong because it accounts for a small proportion of total costs.
VHC - Brighter prospects for 2H 2023
27-04-2023
: VHC
: Fishery
: Loan Nguyen
Tags:
- VHC reported weak Q1 2023 results, with revenues of VND2.2tn (USD94mn), a YoY decrease of 32%. Consequently, NPAT-MI plunged 60% YoY in Q1 2023 to VND219bn (USD9mn).
- We anticipate that VHC's profit growth recovery will materialize in the latter half of 2023: two factors: (1) the US market to recover; (2) orders to recover from the Chinese market after the re-opening. Overall, in FY2023, we forecast net revenue and NPAT to reach VND10.6Tn (or USD452Mn, -20% YoY) and VND1.3Tn (or USD56Mn, -34% YoY). 2023 EPS will be VND 7,134 (-34% YoY).
- Using a 50:50 valuation mix of FCFF and SoTP methods, we arrive at a fair value of VND57,500, implying an expected return of +1% including a cash dividend yield of 4%. We have a NEUTRAL recommendation for this stock.
SCS - Q1-2023 Business Update: Export-import cargo volume drops to record low
26-04-2023
: SCS
: Logistics
: Tung Do
Tags:
- Q1-2023 Revenue/NPAT plummeted by -34% YoY/-40% YoY as export-import cargo volume dropped to the lowest level since listing.
- SCS sets a low target for 2023, mainly due to concerns about weak trade flow, with export-import cargo volume and NPAT both decreasing by 11% YoY. Q1-2023 Revenue and NPAT completed 19% and 21% of full-year target, respectively.
- For 2023F, revenue and NPAT are projected at VND 740 billion (-13% YoY) and VND 525 billion (-19% YoY), respectively, corresponding to EPS 2023F of VND 5,215. SCS is trading at P/E 2023F of 13.6x. Reiterate ACCUMULATE recommendation with a TP of VND 69,300.
Update on monetary market in April 2023
25-04-2023
: VDS
: Macroeconomics
: Ha My Tran
Tags:
- The SBV continues to support liquidity for the banking system.
- Credit growth is recovering.
- Comments on Circular 02-03/2023 of the SBV.
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