PHR – Core businesses are expected to be flat in 2023
08-03-2023
: PHR
: Industrial Land RE
: Hung Le
Tags:
- PHR's 4Q2022 revenue reached VND 577 billion (-3% YoY), and NPAT skyrocketed to VND 528 billion (+168% YoY). For FY2022. Revenue was VND 1,710 billion, down 12% YoY, while NPAT climbed 85% YoY to VND 881 billion. Earnings growth was mainly driven by abnormal income from the VSIP3 deal.
- Compensation income from the VSIP 3 deal will continue to be PHR's profit fulcrum in 2023 in the context that (1) the rubber business is expected to have a slight improvement as the impact of China's reopening is slower than expected. which may cause rubber prices to recover later this year. In addition, input costs are expected to cool down this year as commodity prices have plunged, which will help PHR improve gross profit margin. (2) The wood processing segment has not yet shown signs of recovery. (3) the industrial park business is expected to be flat when PHR only records a leased area equivalent to 2022. Accordingly, revenue is estimated at VND 1,749 billion (+2.4% YoY) and NPAT is estimated at VND 528 billion (- 40.4% YoY). 2023 EPS is expected to be VND 3,899.
- Target price was adjusted down by 34.7% to VND 41,000/share due to temporarily eliminate IP projects including Tan Lap 1 and Tan Binh Expansion as they have yet to be approved and related issues to Binh Duong 2021-2025 master plan. Combined with an annual cash dividend of VND4,000/share, the total expected return is +10.7% (based on the closing price as of March 07th, 2022).
PNJ - January 2023 results – Resilient in the face of challenges
07-03-2023
: PNJ
: Retailing
: Loan Nguyen
Tags: Monthly update Jewelry retail
- In 2022, net revenue and NPAT at VND 33,876 Bn (or USD 1.4 Bn, +73% YoY) and VND 1,807 Bn (or USD 76 Mn, +76% YoY). In January 2023, the company recorded net revenue of VND 4,129 Bn (or USD 174 Mn, +19% YoY) and NPAT of VND 302 Bn (or USD 13 Mn, +12% YoY), partly supported by the Lunar New Year coming earlier than usual, helping to increase gold bar consumption, while retail sales were flat YoY.
- We forecast that PNJ will achieve VND 36 Tn (+6% YoY) and VND 2 Tr (+8% YoY) in revenue and NPAT, respectively, in FY2023. The corresponding 2023 EPS will be VND5,942.
- Since 2022 earnings are close to our forecast and the 2023 outlook remains unchanged, we maintain our target price of VND96,000 (adjusted by stock dividend), implying an upside of 22% on the closing price of March 06th, 2023.
Unlikely consumption growth in 2023 as steelmakers stay idle
06-03-2023
: HPG
: Materials
: Trinh Nguyen
Tags:
- Capacity utilization has yet to recover fully across steel segments, as many depend on exports.
- Steelmakers are conservative in setting output guidance for FY2023
HND – Below-expected Q4/2022 profit, expecting a recovery after Q1/2023
03-03-2023
: HND
: Utilities
: Hoai Trinh
Tags: HND Utilities 4Q22 results 2023 outlook
- HND announced its 4Q22 electricity sales volume of 1,106 mn kWh (-30% QoQ, -29% YoY), lower than our expectation due to the No.4 generator of the HP2 plant’s overhaul in Q4. Despite the fact that the production of electricity decreased QOQ and YoY, the revenue reached VND 2,238 bn/ USD 94.3 mn (-27% QOQ, +1% YoY) as a result of rising input coal costs, which led to an increase in the electricity’s ASP. However, NPAT recorded a loss of VND 7.6 bn/ USD 0.3 mn (Q4/2021: VND 259.9 bn/ USD 11.0 mn), primarily due to the low volume, which was insufficient to cover its fixed costs and generate a profit on the CGM.
- However, we expect better earnings in 2023 based on the assumptions (1) a sharp decline YoY in interest expenses and depreciation costs, (2) Qc and Qm will be higher from Q2, and (3) In 2H23, HND expects to gain more profit on CGM as hydropower gradually exits a favorable phase, even though coal prices remain high.
- We have an ACCUMULATE rating with the one-year target price of VND 15,600/share. With an expected cash dividend of VND 1,000/share in the next 12 months, it implies a total return of 19%, based on the closing price of Mar 3rd, 2023.
FPT – Q4-2022 Profit Unexpectedly Decelerated But The 2023 Growth Outlook Remains Intact
02-03-2023
: FPT
: Technologies
: Tung Do
Tags: FPT 4Q22 Results update
- Q4-2022 revenue reached VND 13 trillion (+22% YoY), mainly driven by Technology and Education & other investments segments. However, NPAT inched up by only 4% YoY, reaching VND 1.4 trillion, due to a contracted PBT margin in key segments after the Group recorded high operating expenses (bonus expenses, provision expenses and FX losses) and gains from joint ventures was down by 64% YoY.
- 2022 Revenue and NPAT recorded growth of 23% YoY and 22% YoY, respectively. For 2023, FPT targets revenue and EBT growth of 19% YoY and 18% YoY respectively. Currently, We forecast that 2023F revenue/PBT will grow by 18% YoY/22% YoY.
- Current TP is VND 100,500, offering a total expected return of 28% (as of March 2nd, 2023), equivalent to a 2023F/24F P.E of 16.8x/13.7x.
Vietnam’s food & beverage sector is expected to see less pressure on profit margins from 2H2023
02-03-2023
: VNM
: Retailing
: An Nguyen
Tags:
- On Feb 27th, the price index of agriculture & livestock commodities was 103.4 USD (+0.4 %MoM; -1.5 %YoY), driven by lower production costs and weak global demand, helping to improve the gross margin of Vietnam F&B companies. We predict that the margin improvement effect will be more visible from 2H2023 because almost all F&B producers locked raw material contracts in the beginning of 2022 and Q4 2022, resulting in high-priced inventory in 1H2023.
- We expect that Vietnam’s F&B industry also saved costs through the decline of logistic costs which is a result of sluggish demand in the global economy. On Feb 24th, the Baltic Dry Index (BDI) was 883 points (+22.5% MoM; -59.6% YoY).
- Vietnam’s F&B companies also enjoy the benefits from higher top-line, supported by stable sales volume and higher average selling prices (ASP). According to Kantar Worldpanel, in 2022, the ASP of Vietnam FMCG products grew each quarters. We believe that this effect will make 2023 ASP of these products trade at a higher level than a year ago. As a result, net profit of F&B companies will show a positive growth in 2023.
PVS – Opportunity when transitioning to offshore wind power
28-02-2023
: PVS
: Oil & Gas
: Vu Tran
Tags: Offshore wind power Su Tu Trang Block B
- Earnings growth in 2022 was mainly due to the low base of 2021. The overall business had no significant changes as the Mechanical & Construction (M&C) segment lacked huge contracts to be recorded and the gross margin of M&C continued to remain low at 1.4%. At the end of 2022, the revenue and NPATMI reached VND 16,419 bn (up 15.5% YoY) and VND 773 bn (up 28.5% YoY), respectively.
- PVS is gradually shifting its business to offshore wind power based on the its advantages of facilities as well as support from the Government. Recently, the company has been signing MOUs with many partners to cooperate in developing domestic as well as overseas projects. Up to now, PVS has been rewarded a USD 300mn - contract of 32 jackets offshore wind power project owned by Orsted Taiwan. PVS also won the package to implement two offshore substations of Hai Long project with the value of USD50 mn.
- Regarding the domestic Oil & Gas projects, we also expect that the speeding up of these progress will add more new backlogs in the short term as the company is gradually shifting to the renewable energy business segment.
- Despite the positive signals, PVS is still lacking huge EPC contracts to book for profit this year. For 2023, we forecast revenue and NPATMI to reach VND18,524 bn and VND 808 bn respectively, higher than our previous forecast (VND15,875bn and VND631bn). Therefore, we raise our target price from VND21,500 to VND23,800 but still stay NEUTRAL on this stock.
Update on monetary market in Feb 2023
27-02-2023
: VDS
: Macroeconomics
: Ha My Tran
Tags: Macroeconomics Monetary market
- With abundant liquidity, the SBV net withdrew in Feb 2023.
- Deposit interest rates fell on a large scale.
- "Warming up" the real estate market?!
ACB – Sustainable growth from high base
24-02-2023
: ACB
: Banking
: Thao Nguyen
Tags: ACB banking 4Q results update
- Q4 PBT reached VND 3.6 tn (or USD 150 mn, +19% YoY) driven by both interest income (35% YoY), non-interest income (+24% YoY) and a slump of provision expenses (-52% YoY). However, on a quarterly basis, PBT dropped by 20% due to operating expenses surging by 61% QoQ. CIR increased to 40.3% in 4Q22, mainly due to a VND 1,000 bn (or USD 41 mn) expense for the science and technology development fund.
- Asset quality improved on both quarterly and yearly basis. NPL was 0.74% in 4Q22, down from 1.01% in 3Q and 0.8% at the end of 2021. Bad debt coverage ratio increased to 159.3% compared to 3Q2022 (137.8%) yet decreased from 209.4% at the end of 2021.
- The bank prudent approach with Covid-19 related debts in 2021 has paid off in 2022. The low provision expense in 2022 is mostly due to reversal income from Covid-related restructuring loans. Coupled with a climb of 24% YoY and 14% YoY in net interest income and non-interest income, respectively, PBT reached VND 17,114 bn (or USD 713 mn) in 2022, +43%YoY, in line with our expectation of a high profit growth during this year.
- The forecast of PBT for 2023-2024 are VND 20,431 bn (or USD 851mn, +19%) and VND 24,314 bn (or USD 1 mn, +19%), respectively. The book value per share are estimated at VND 18,453 and VND 22,253. Our latest target price is VND 30,000/share, implying an upside of 21% from the closing price as of Feb 22nd, 2023 and a BUY recommendation.
Seafood industry – Signs of recovery in pangasius exports to China from Q2/2023
23-02-2023
: VHC, ANV, IDI
: Fishery
: Loan Nguyen
Tags: Industry update China's reopening
- Pangasius exports to the US market continue to remain low, stemming from a high base in FY2022, weak demand and excessive inventories.
- In contrast, China is the silver lining, with demand for seafood rising after the market's reopening. While the extent of the impact of this event is still a wild card, there are some indications that exports to the Chinese market could gradually improve from Q2/2023.
- The recovery of the Chinese market does not necessarily mean that the industry will be immune to the bust cycle. Although short-term trading strategies based on relevant news may exist, we advise against adopting a long-term holding strategy in 2023.
IDC – Speed up
22-02-2023
: IDC
: Industrial Land RE
: Hung Le
Tags: IDC Industrial Land RE
- IDC reported that revenue increased 11% year on year to VND 1,208 billion in Q4 2022, and NPAT increased to VND 202 billion compared to VND 1 billion in 4Q2021. The growth was thanks to the low base of the fourth quarter of 2021. IDC's revenue for 2022 was VND 8,242 billion, a 92% increase year on year. NPAT increased by 826% year on year to VND 2,286 billion. The growth was led by the energy segemnt and IP leasing activities.
- For 2023, we estimate that the revenue and NPAT will reach VND 7,387 billion (-10%YoY) and VND 1,888 billion (-17% YoY) respectively. The results are expected to be lower than 2022, owing to the fact that IDC may no longer record one-time revenue from leasing as they did in 2022. Except for this surge, revenue and NPAT in the main business segments are expected to grow by ~20.3% and ~12.9%, respectively, in 2023.
- In the short-term, IDC could record one – off revenue as IDC complete transfers 21,870 m2 of Urban projects in Ward 6, Tan An, Long An to Aeon mall, the deal is expected to earn approximately VND 400 billion in NPAT after all procedures are completed in 2023. However, the unearned revenue adjusted P/B of IDC is 1.7, which is higher than Peers’s P/B average of 1.26. We believe that expected earnings from the deal has been priced in the current market value.
- We maintain a positive long-term outlook for IDICO (HNX: IDC) due to (1) its large available leasable land bank (751 ha), which will ensure IDC performance for at least five years, (2) new projects of the energy segment will lift up earnings, (3) the asset turnover has improved significantly since 2020 as IDC accelerated leasing activities. For 2023, we estimate that the revenue and NPAT will reach VND 7,387 billion (-10%YoY) and VND 1,888 billion (-17% YoY) respectively. Besides, IDC plans to pay a cash dividend in next 12 months at no less than VND 4,000/ shares, equivalent to a dividend yield of ~9.5% compared to the closing price of 21/02/2023.
VSC – Q4/2022 results are not prosperous and story from the M&A deal in the seaport industry
21-02-2023
: VSC
: Seaports
: Quan Cao
Tags:
- Q4/2022 results was net revenue and NPATMI of VND 520 billion (+3% YoY, +2% QoQ) and VND 53.4 billion (-42% YoY, -34% QoQ), respectively. In 2022, net revenue and NPATMI recorded VND 2,007 billion (+6% YoY) and VND 314 billion (-10% YoY), EPS was 2,451 VND (-45% YoY).
- VSC is in the execution process of an M&A deal. We believe that VSC's target company is Nam Hai Dinh Vu Port Joint Stock Company, which owns Nam Hai Dinh Vu Port (NHDV) in Hai Phong as GMD has announced the decision to transfer all shares in NHDV and recorded a deposit of VND1,000 billion in Q4/2022. In Q4/2022, VSC together with Doan Huy Investment and Trading Co., Ltd. made a deposit of VND 1,000 billion to buy back the target port, of which VSC contributed VND 300 billion. According to the draft of the plan to use capital from the issuance, the value of this deal is expected to be about VND 2,250 billion. In which, the remaining VND 1,200 billion is expected to be mobilized by VSC through the share issuance to existing shareholders at the ratio of 1:1 and the offering price is VND10,000/share.
- The seaport industry's outlook for 2023 is quite challenging as GDP growth rate of main trade partners such as the US and EU is forecasted to slow down and inflation will remain high. In fact, the PMI of Vietnam has not shown any positive signal in recent months.
- We are conducting a more thorough assessment of the potential from the NHDV port M&A deal and projection for 2023. Currently, VSC stock is trading at a P/B valuation of 1.4x, equivalent to a 5-year average of 1.4x, and a P/E TTM of 12.2x, and is 33% above the 5-year average of 9.2x.
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