DBD – Profit growth by core business
04-11-2022
: DBD
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: DBD
- In Q3/2022, DBD recorded net revenue and NPAT of VND 394 billion (-29% YoY) and VND 54 billion (+31% YoY), respectively. Accumulated 9M2022, net revenue and PBT reached VND 1,090 billion (-6% YoY) and VND 207 billion (+23% YoY), completing 67% and 90% of the annual plan. Net revenue and PBT accumulated 9M2022 completed 74% and 78% our forecast, respectively.
- Revenue dropped sharply in Q3/2022 as sales of medical equipment and supplies decreased by -99% YoY, to only VND2 billion, from the high base of Q3/2021. In Q3/2022, the revenue of pharmaceuticals reached VND 400 billion (+19% YoY), accounting for 96% of total revenue. The ETC and OTC channels’ revenue were VND 567 billion (+26% YoY) and VND 428 billion (+5% YoY), respectively.
- Forecasted net revenue/NPAT are VND 1.469 billion (-5,7% YoY)/ VND 215 billion (+16,8% YoY) for 2022F and VND 1.679 billion (+15,5% YoY)/ VND 264 billion (+23% YoY), respectively. We maintain a BUY recommendation with a target price of VND 52.200 per share.
VNM – Regain market share on the success of new trade terms
03-11-2022
: VNM
: Food, Beverage & Tobacco
: An Nguyen
Tags:
- In Q3 2022, Vinamilk posted net sales and net profit of VND16,079 bn (or USD684 mn; +7.7% QoQ; -0.7% YoY) and VND2,298 bn (or USD98 mn; +10.3% QoQ; -21.4% YoY), respectively. The positive signal taken from the performance is that domestic earnings has recovered. VNM regained market share in all key products (except formula powdered milk).
- We forecast Q4/2022 net revenue and NPAT-MI to reach VND 17,625 Bn (or USD 750 Mn, +9.6% QoQ, +11.4% YoY) and VND 3,054 Bn (or USD 130 Mn, +32.9% QoQ, +39.1% YoY), respectively. Better profit margin will come from lower raw milk costs as the company closed raw material contracts at below year-ago levels.
- We maintain the target price of VND85,100. Adding a cash dividend of VND4,000, the 12-months expected return is 13.8% compared to the closing price on Nov 02nd 2022. Despite the rosy outlook that VNM ‘s organic sales will grow since Q4 2022, VNM ‘stock price rose by +14.6% from the beginning of Oct-2022, thus we downdrage from BUY to ACCUMULATE this stock.
HDG – Energy segment slowing down from Q4
02-11-2022
: HDG
: Real Estate
: Anh Tran
Tags: HDG
- In 3Q2022, revenue (+32% YoY) and NPAT (+310% YoY) recorded positive growth. The main growth driver came from the energy segment, which maintained a high growth rate (+177% YoY in revenue) thanks to the stable operation of factories and favorable hydrological condition.
- In 4Q2022, Rong Viet estimates that HDG’s revenue and NPAT will reach VND 1,023 bn (+22% QoQ and -22% YoY) and VND 367 billion (+8% QoQ and -40% YoY) respectively. For the whole year 2022, we estimate revenue and NPAT at VND 3,515 bn, -7% yoy and VND 1,416 bn, +5% yoy, completing 95% and 105% of the year plan, respectively. EPS is estimated at 4,870 VND per share.
- We maintain our BUY recommendation for HDG stock within a holding target of more than 12 months, target price adjusted to VND 35,900 per share, upside of +21%, compared to closing price on November 1, 2022 (lower price by VND 11,900 dong in the August 2022 strategic report due to the correction of the discount rate in line with the increasing trend of market interest rates.
Fertilizer sector – 3Q22 mixed earnings picture and better sales volume expectation in 4Q22
01-11-2022
: DCM, BFC, DPM
: Fertilizer
: Vu Tran
Tags: Sector Update
- Urea prices started to regain from August after recording a decrease in previous months while other prices were flat.
- Mixed earnings picture in 3Q2022 with growth from DPM, DCM while BFC to fall. Earnings may reach peak in 1H2022.
- Sales volume of domestic fertilizer is expected to improve in Winter-Spring crop. Overall consumption volume will still depend heavily on export activities, especially urea producers.
ACV – Q3-2022 Business Results Update: Maintaining the Robust Recovery Momentum
31-10-2022
: ACV
: Aviation
: Tung Do
Tags: ACV Business Update
- Total passenger volume recorded the all-time high at 30 million in Q3-2022 (international: 4 million, domestic: 26 million) and up 8% compared to Q2-2022.
- Core net revenue (excluding landing/take-off revenue) reached VND3,605 billion, up 24% QoQ and 21% lower than the same period in 2019 (pre-covid level). Meanwhile, core EBIT (excluding landing/take-off profit) recorded VND 1,697 billion, up 74% QoQ and also about 20% lower than Q3-2019.
- Accumulated 9M-2022, ACV posted revenue of VND 8,209 billion (+154% YoY) and NPAT-MI of VND 5,164 billion (31x YoY), after excluding landing/take-off revenue and profit.
TCB – PBT sustainably grew in 3Q2022
28-10-2022
: TCB
: Banking
: Thao Nguyen
Tags: TCB
- PBT sustainably grew in 3Q2022 driven by interest-earnings assets expansion and fee income. By 3Q2022, customer loans grew by 18.2% while corporate bonds dropped 30%, resulting in credit growth of 10.7%. On the funding side, TCB is under pressure to attract customer deposits, so the Bank must mobilize more in the interbank market.
- In the coming quarters, we foresee that TCB’s NIM will gradually decline owing to the rising cost of funds. Currently, NPL started to increase as the restructuring loans period has finished yet TCB had fully allocated this provision. As a result, profit growth remains regardless of a slight deterioration in asset quality in 3Q2022. But we foresee the asset quality in the coming quarter will be affected by the negative outlook of the real estate industry – the sector that TCB highly exposed.
- In the short term, the real estate sector is forecast to have a negative outlook in the coming quarters owing to (1) rising interest rates and (2) the limited capital stream from both loans and bond market. However, we appreciate TCB's strategy and customer base and the effects of the challenges on the bank's asset quality could last for a short time. Hence, investors need to closely monitor the movement in the real estate sector and government policy changes in this sector. We are revising our forecast and valuation and will update TCB's target price in our next report.
PHR – Land handover deals will be fulcrums for earnings
27-10-2022
: PHR
: Industrial Land RE
: Hung Le
Tags: PHR
- In 9M2022, PHR posted VND 1,131 billion in revenue (-11.6% yoy), NPAT-MI came at VND 495.36 billion (+45.6% yoy). In which, PHR’s Q3 revenue reached VND 522.75 billion (+0.19% yoy), NPAT-MI was VND 122 billion (-15.86% yoy). Specifically, the performance of rubber segment, wood processing and trees liquidation was not so favorable. However, the income from compensation is the main pillar for PHR's profit.
- PHR's prospects are still positive thanks to (1) interests from VSIP deal, (2) recovery of rubber segment on the low base of this year when the demand from the Chinese market bounces back, (3) as well as the landing handover compensation of other potential projects such as Lai Hung, solid waste treatment project.
- We maintain a positive long-term view of PHR. Target price adjusted down by 32,3% to VND 59,800/share due to (1) adjustment in the discount rate that is more reasonable under the context of interest rate hiking pressure, (2) delaying timeline and decreasing probability of being approved as an investor of Ip projects including Tan Lap 1 and Tan Binh Expansion. (3) Adjustment in the scale of VSIP 3 project in a way that is more reasonable. In which, VSIP could lease on area that has been transferred from PHR, the clearance of the remaining area will be more difficult as it has to negotiate with many other parties. Combined with an annual cash dividend of VND4,000/share, the total expected return is +70.1% (based on the closing price as of October 26, 2022).
VHC – Lower-than-expected net profit resulting from a large inventory provision in Q3-FY22
26-10-2022
: VHC
: Fishery
: Loan Nguyen
Tags: VHC Business Update
- In Q3-FY22, VHC delivered net revenue of VND 3,261 Bn (or USD 133 Mn, +46% YoY and -23% QoQ) and NPAT-MI of VND 450 Bn (or USD 18 Mn, + 76% YoY, -43% QoQ). While Q3 net revenue was in line with our forecast, NPAT-MI fell behind our expectations mainly because the company booked an inventory provision of VND 240 Bn (or USD 10 Mn).
- Accumulated 9M-FY22, revenue and NPAT were VND 10,755 Bn (or USD 439 Mn, +69% YoY) and VND 1,787 Bn (or USD 73 Mn, +176% YoY), fulfilling 83% and 111% of VHC’s 2022F guidance, respectively.
- We are reviewing our target price due to lower-than-expected Q3/2022 results, albeit not by much. Moreover, we also revise earnings growth for FY2023 amid the global economic downturn and apply a higher discount rate. We see a potential downside revision of the target price, although more time is needed for a detailed assessment. Our previous target price was VND97,000/share
Vietnam’s monetary market volatilities
25-10-2022
: VDS
: Macroeconomics
: Ha My
Tags: Monetary market
- The dong depreciated by 4.1% from the beginning of October until now
- Is the pressure of devaluation of the dong subjective or objective?
- Liquidity in the system is still tight
- Exchange rate and interest rate outlook
STK – 3Q22 earnings results worse-than-expected; FX losses hurt bottom line
24-10-2022
: STK
: Textile & Garment
: Hoai Trinh
Tags: STK Business Update
- 3Q22 net revenue was VND 515 bn/ USD 20.7 mn (-3% QoQ, +10% YoY compared to 3Q21 low base). NPAT-MI just came at VND 50 bn/ USD 2 mn (-28%QoQ, -18%YoY), missing expectations, due to FX losses and direct customers’ weakening orders. Overall, STK has completed 65% of its net sales & NPAT targets for FY22.
- For 4Q22, we forecast net revenue and NPAT-MI of VND 520 bn/ USD 20.9 mn (+1%QoQ, -19% YoY) and VND 57 bn/ USD 2.3 mn (+14% QoQ, -25% YoY), respectively, as orders momentum decelerate, and a weak VND. For FY22, we expect STK’s net revenue and NPAT-MI to be VND 2,205 bn/ USD 90 mn (+8% YoY) and VND 252 bn/USD 10 mn (-9% YoY), respectively. The correspondent EPS is VND 3,086.
- We maintain a BUY recommendation with 8% lower one-year target price of VND 38,500/share (from VND 41,600/share). The lower TP is primarily driven by downward earning revisions. With an expected cash dividend of VND1,000/share in the next 12 months, this implies a total return of 27%, based on the closing price of Oct 24th, 2022.
Banking Bad Debt Prospect Seen from the Recent Changes in the Real Estate Sector
21-10-2022
: TCB, VCB, ACB, BID, MBB, LPB, HDB, TPB, VIB, OCB
: Banking
: Tam Pham
Tags:
- The real estate industry has enterred a period of strong adjustment, which will increase the risk of bad debt at banks with a high exposure of credit to the real estate sector, leading to a higher credit cost margin. However, the level of risk is different depending on the credit exposure of each bank to the real estate industry and the financial health of the real estate partners.
- Bad debt from Covid-related restructured debt will increase after Circular 14 expires, but most of the banks in the recommended list will not be affected.
- The ratio of bad debt in the coming time will continue to differentiate depending on the characteristics of each bank's customer base and the impact of the macro factors on customer groups. The K-shaped recovery pattern will continue.
Vietnam automobile sales are expected to keep growing in Q4 2022
20-10-2022
: HAX
: Automobiles
: An Nguyen
Tags: HAX
- According to VAMA, automobile sales reached 33,463 vehicles (+8.5% MoM; +147% YoY) in Sept-2022. The month-over-month growth, despite inflation hike, proves strong demand of private vehicles as well as development of logistic activities. These are positive signals for sales growth of automotive & spare parts companies.
- We predict that Vietnam automobile sales will keep growing in Q4 2022, fueled by various new models coming to markets. The global chip shortage problems is easing since Jun-2022, supporting global car producers to enhance their supply in Q4 2022. Consequently, Vietnam car distributors is expected to show strong sales growth in Q4 2022.
- However we think that sales might be negatively affected in 2H2023 as a result of the European energy shortages during the spring of 2023. The potential energy crunch risk might reduce global car supply, leading Vietnam distributors to struggle with low inventory in 2H2023.
04-11-2022
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