STK – Still not out of the wood, but getting better
17-02-2023
17-02-2023: STK
: Textile & Garment
: Hoai Trinh
Tags: 4Q22 results Textile STK
- STK announced its 4Q22 net revenue of VND 430 bn/USD 18.1 mn (-16% QoQ; -13% YoY). NPAT-MI was VND 43 bn/ USD 1.8 mn (-14% QoQ; -43% YoY), mainly due to (1) a sharp decline in total yarn volume, and (2) a higher CIT expense in Q4/2022. Overall, STK’s 2022 net revenue and NPAT-MI were VND 2,115 bn /USD 89.8 mn (+3.5% YoY) and VND 240 bn/USD 10.7 mn (-13.7% YoY), achieving 97% and 98% of our full-year forecasts.
- For 2023, we expect earnings to rebound, particularly in the second half. Due to the subbed demand in 1H23, we lower our 2023 net revenue and NPAT-MI forecasts to VND 2,232 bn/ USD 93.7 mn (+5.4 % YoY) and VND 259 bn/USD 10.9 mn (+7.6% YoY), respectively. 2023 EPS is VND 3,154.
- STK is currently trading at a 2023 forward PER of 9.2x. We have an ACCUMULATE rating with the one-year target price of VND 32,500/share. With an expected cash dividend of VND 1,500/share in the next 12 months, it implies a total return of 12%, based on the closing price of Feb 17th, 2023.
58 DRC – Expensive input costs remains an obstacle
16-02-2023
: DRC
: Automobiles
: An Nguyen
Tags:
- In Q4 2022, Danang Rubber Jsc. (HSX: DRC) posted net sales of VND1,114 bn (or USD47 mn; -17.6% QoQ; -16.4% YoY), dragged down by lower domestic tire consumption and Q4 2021 high-based performance. Higher input costs and lower selling expense/sales ratio produced a net profit of VND82 bn (or USD 3 mn, +6.2% QoQ; -6.3% YoY).
- Backed by 9M2022 strong performance, DRC had a 2022 rosy business result with revenue and net profit of VND4,899 bn (+12% YoY) and VND308 bn (+6% YoY), respectively. The key growth driver was high double-digit sales growth of exports (+25% YoY). 2022 EPS was VND2,337 (+6.0% YoY).
- In the context of expensive raw material costs and weak tire consumption in the domestic market, we predict that the 2023 performance will grow in the single-digit rate, predicting revenue and net profit of VND5,233 bn (or USD223 mn, +6.8% YoY) and VND331 bn (or USD14 mn, +7% YoY), respectively. 2023 EPS is expected to be VND2,509 (+7.4% YoY).
Trade outlook: Glimmers of hope in the new year
15-02-2023
: VDS
: Macroeconomics
: Ha My
Tags: Trade
- Trade in Jan 2023 declined sharply but not too seriously.
- Exports to the EU market was steady.
- The world economy started the year with some bright spots.
SCS – Q4-2022 Profit grew better-than-expected on aggressive costs cutting
14-02-2023
: SCS
: Logistics, Non-aviation Services
: Tung Do
Tags: SCS
- Total throughput fell by 32% YoY (international - 32% YoY, domestic -6% YoY) in Q4-2022, which led to a 26% YoY drop in revenue. The weakening trend in Q4 is in line with our forecast as full-year throughput/revenue fulfills 101%/99% of our forecasts.
- COGS and G&A expenses have been significantly cut, down 56% YoY and 63% YoY respectively. Thereby, Q4-2022 NPAT was flat y/y. 2022 NPAT increased 15% YoY, 12% higher than our forecast.
- The weak trade flow prospect between Vietnam and key partners will be challenging for SCS to create a meaningful growth in 2023F. Revenue and NPAT are forecasted to reach VND900 billion (+5% YoY) and VND655 billion (+1% YoY) respectively, equivalent to an 2023F EPS of VND6,300.
- SCS is trading at a 2023F P/E of 11.6x. We reiterate ACCUMULATE recommendation with a TP at VND81,000.
Retail industry – Q4/2022 Review: A bleak quarter for retailers
13-02-2023
: MWG, PNJ, FRT, DGW, PET
: Retailing, TCGs Retailing, Consumer Staples
: Loan Nguyen
Tags:
The spillover effects of global the economic downturn on the retail industry began to hit financial performance in Q4/2022 in the aftermath of poor consumption demand amidst squeezing disposable income. This negative scenario is likely to persist through 1H 2023.
We anticipate that the retail market will experience a stronger rebound in 2024. This means that retailers’ financial performance can get back on track in 2H 2023.
Except for PNJ, the rest of the retail companies in our coverage experienced negative year-over-year growth in Q4/2022.
PVD – Rising rig day rate to accelerate the earnings
10-02-2023
: PVD
: Oil & Gas
: Vu Tran
Tags: Drilling market 4Q22 Results update rising rig day rate
- PVD posted positive results in the fourth quarter compared to the previous three quarters in spite of recording VND30 bn provision from Kris Energy and a sharp increase in financial expenses following the rise of interest rates. Specifically, the company booked VND 54 bn in NPATMI compared to the loss in the first 3 quarters of the year.
- PVD has signed the full contract for its 4 jack-up rigs in 2023 with minimum average rig day rate of 75,000 USD/day. At this day rate, we think the core business of PVD can gain profit after getting loss in many years before.
- The company is actively looking for new contracts for 2024. We believe that acquiring contracts for 2024 at the this time will help PVD receive a better day rate compared to the 2023 level. Currently, the rig day rate in Southeast Asia (SEA) has reached 120,000 USD/day and is forecasted to reach 160,000 USD/day by 2024.
- For 2023, we forecast that PVD can reach VND6,834 bn in revenue and VND344 bn in NPATMI, higher than our previous forecast. We remain BUY recommendation and raise PVD's target price from VND21,500 to VND26,800 to reflect PVD's positive outlook in 2024 thanks to a day rate that closes to the SEA level.
TCB – The bottom line witnessed a YoY negative growth rate in 4Q22
09-02-2023
: TCB
: Banking
: Thao Nguyen
Tags: TCB
- In Q4, TCB’s PBT reached VND 4.7 tn (or USD 199 mn), -23% YoY and -33% QoQ, dragged down by (1) Decreasing of TOI and (2) the rising of both operating and provision expense.
- Credit and deposit growth reached 12.5% YTD and 12.6% YTD, respectively. The ratios of CASA and term deposits have changed sharply since 4Q, in which, the former dropped and the latter rose, making NIM decrease by 42bps to 5.29% in 2022.
- In 2023, we expect credit and deposit to grow 13.2 % and 12.2%, respectively. Funding cost will keep high in the early quarters, so its NIM will not improve until Q3 2023. Given the headwinds in the current corporate bond market, TCB's underwriting and bond issuance-related fees will be under downward pressure until the bond market shows signs of improvement in new issuance. Nevertheless, NFI might sustainably grow thanks to L/C and settlement activities. Therefore, we expect TOI and PBT to growth 6% and 3% YoY. NPATMI is forecasted at VND 21 Tn (or USD890 bn, 3%) and correspondent EPS is VND 5,852.
- Our current target price is VND 33,000, offering an upside of 19% compared to the closing price of Feb 09th, 2023. However, TCB’s advantages in the past, such as low funding cost or bond market-maker role, have been on the challenging period and would result a slowdown in its income in 2023. Therefore, market sentiment to the stock is temporary less positive than it was. We believe that as soon as the mentioned bottlenecks are released, TCB with extensive experience in retail banking will quickly recover. Investors should closely observe to see positive developments in relevant events to make investment decisions.
LHG - Gloomy 2023 outlook
08-02-2023
: LHG
: Industrial Land RE
: Le Tu Quoc Hung
Tags:
- LHG reported a 61% year-on-year increase in revenue to VND 103 billion in the fourth quarter of 2022, while NPAT reported a 20% year-on-year increase in revenue to VND 30 billion. The strong growth in business results was led by revenue from the IP land leasing segment compared to the low base (no revenue) in the fourth quarter of 2021.For the whole 2022, LHG earned VND 629 billion in revenue, a 20% decrease year on year, and met 80% of its revenue targets. NPAT totaled VND 202 billion, a 32% decrease year on year. The primary cause is the decline of the IP land leasing segment.
- In our base scenario for 2023, revenue is estimated at VND 815 billion (+11%) and NPAT will come at VND 341 billion (71%).
- We revise down our target price to VND 33,000/share due to (1) temporarily eliminating the last 20 hectares that had yet been cleared in Long Hau 3 phase 1; (2) temporarily eliminating An Dinh and LH 3.2 until the investment policies get approvals; and (3) factoring liquidity risk by taking a discount by 20% of NAV as LHG being limited trading time until 06/17/2023. Adding an annual cash dividend of VND 1,700 per share, the total expected return will be +58% (compared to the closing price of 02/08/2023).
HSG: Challenges to both production and sales departments
07-02-2023
: HSG
: Materials
: Trinh Nguyen
Tags: HSG
- We predicted HSG’s subpar performance in 1Q/FY22-23 in our previous recommendations, when the steel industry started its downturn.
- HSG’s operation in both upstream and downstream markets could have doubled the impact from input price fluctuations compared to industry peers.
- Future improvements depend on HSG’s capacity to (1) be as flexible as possible in purchasing and stocking activities and (2) revamp sales policies during the unfavorable market condition, which is going to be prolonged at least until the end of 2023.
DBD – Revenue and profit cannot jump in 2023
06-02-2023
: DBD
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: DBD Pharmaceuticals
- In Q4/2022, DBD recorded net revenue and NPAT of VND 465 billion (+15% YoY, +18% QoQ) and VND 79 billion (+62% YoY, +47% QoQ), respectively. In 2022, net revenue and NPAT reached VND 1,555 billion (+0% YoY) and VND 244 billion (+32% YoY), completing 103% and 115% of our forecast thanks to the main products on the ETC channel, which are cancer drugs, kidney solutions and antibiotics.
- Nhon Hoi anti-cancer drug factory was delayed in meeting EU – GMP standards because the company needed time to install the EU – GMP drug laboratory at the new factory. The expected time to achieve EU – GMP standards for injection and tablet lines is Q3/2024 and Q2/2025, respectively.
- We are evaluating more fully the forecast for 2023. Currently, because Nhon Hoi anti-cancer drug factory has not been able to meet EU-GMP standards in 2023, we adjusted the target P/E for 2023 from 20x to 16x, corresponding to a target price of 49,000 VND/share.
Signs of slowing down in passenger car (PCs) demand have been evident since December 2022
03-02-2023
: HAX, CTF
: Automobiles
: An Nguyen
Tags: Automotive sales 2022 VAMA
- According to VAMA, in Dec-2022, total sales of passenger cars (PCs) was 23,825 (-5.6 %MoM; -33.9 %YoY), driven by lower purchasing power due to rising interest rates and high base performance of Dec-2021. Notably, it is possible that the negative growth month-over-month is necessarily a signal of slowing down in PCs demand.
- The challenges of PCs consumption as mentioned above has not been fully reflected on the business performance of Vietnam PC distributors in Q4 2022. While Haxaco Jsc. (HSX: HAX) posted a negative growth in Q4 2022 sales, City Auto (HSX: CTF) maintained its strong sales growth.
- Global total vehicle sales (included passenger car and light truck) also dropped in Dec 2022 with 3.0 mn units (-48.7% MoM; -53.0% YoY). Notably, some global car manufacturers announced a slowdown in 2H2022. Therefore, we expect that the PCs ‘sales of both global and domestic markets will stagnate in 2023.
PPC – 4Q22 results in line, expecting a recovery in 2023
02-02-2023
: PPC
: Utilities
: Hoai Trinh
Tags: 4Q22 results Utilities PPC
- PPC announced its 4Q22 electricity sales volume of 829 mn kWh (+41% QoQ, +142% YoY). Higher in electricity sales volume coupled with the higher ASP, resulted in net revenue of VND 1,576 bn/USD 67 mn (+32% YoY). Net income came at VND 69 bn/USD 2.9 mn (+8% YoY), despite no dividend income from associate companies.
- 2022 total electricity volume of 2,876 mn kWh (+7% YoY), completing 97% of our forecasts. Net revenue and NPAT was VND 5,116 bn/ USD 218 mn (+32% YoY) and VND 373 bn/ USD 16 mn (+72% YoY), achieving 99% and 102% our 2022 forecasts.
- 2023 should see core earnings rebound, better cash dividends from associate companies. For 2023, we forecast PPC’s net revenue and NPAT-MI to be VND 7,823 bn/ USD 334 mn (+53% YoY) and VND 540 bn/ USD 23 mn (+45% YoY) in 2023, respectively.
- We maintain an ACCUMUALTE rating with the one-year target price of VND 14,300/share. With an expected cash dividend of VND 900/share in the next 12 months, it implies a total return of 7%, based on the closing price of Feb 2nd, 2023.
