MBB – 8M2022 Performance Update
03-10-2022
: MBB
: Banking
: Tam Pham
Tags: Business Update
- PBT of parent bank reached VND14,500 billion in 8M2022, compared to nearly VND10,000 billion in the same period last year. Total PBT of subsidiaries were nearly VND2,000 billion in 8M, of which MCredit reached nearly VND800 billion.
- High credit growth and NIM’s expansion drove earnings growth.
- Asset quality and risk costs were well-controlled but pressures are rising.
- Increasing risk to be awared with high exposure in sectors that related to real estate.
- Forecast and valuation are being updated considering the risk-reward balance and the context of increasing capital costs.
LHG – Value is still there
30-09-2022
: LHG
: Industrial Land RE
: Hung Le
Tags: Business Update
- Long Hau 3 phase 1 still has enough leasable area to ensure earning results at least until 2024. Meanwhile, the project of An Dinh Industrial Park and Long Hau 3 Industrial Park Phase 2 delay until end of 2024 – early 2025 due to the impact of the decree 35.
- We expect LHG's 3Q2022’s earnings to show a strong recovery compared to the same period last year. Specifically, revenue is estimated at ~VND 208.18 billion (+300.03% YoY), EAT is 78.65 billion dong (+295.35% YoY) and gross profit margin returns to level ~50% compared to 25% in the previous quarter.
- Based on the sum-of-the-parts valuation (SOTP), we maintain our BUY recommendation and lower the target price to 52,000/share to (1) adjusting the discount rate to be more reasonable to the context of increasing interest rate pressure, (2) delay An Dinh Industrial Park and Long Hau 3 – phase 2 till 2025, and (3) adjusted the average land leasing price for 2022 to $230/m2 and $240/m2 for the year 2023. Adding an annual cash dividend of VND 1,700 per share, the total expected return will be +104.4% (compared to the closing price of 09/29/2022).
Europe: Currency issues
29-09-2022
: VDS
: Macroeconomics
: Bernard Lapointe
Tags: Currency
- This writer travelled to Paris and Frankfurt lately to meet with contacts and was amazed at how much the focus was on the British Pound.
- The Euro continues to be weak.
- European companies are keen on reducing their manufacturing exposure to China. SE Asia should benefit from ‘re-localization’.
Seafood – Signals of pangasius export recovery in 4Q2022
29-09-2022
: VHC
: Fishery
: Loan Nguyen
Tags: Sector outlook
- In 8M-2022, pangasius export value reached USD 1.8 Bn, soaring 80% YoY. In August 2022, pangasius exports to many markets showed positive signs of recovery with USD 195 Mn, slightly increasing compared to July.
- In 3Q2022, RongViet Research forecasts that
pangasius export value will decrease by about 20-25% compared to 2Q2022 but
will roughly double compared to the low base of the same period. We expect that
pangasius exports in Q4 will gradually improve compared to Q3 due to some
positive signs from the demand side.
- In 2023, we expect that pangasius exports to the
US and EU markets will gradually cool down due to recovering global supply and
decreasing consumption while Chinese market will be the bright spot driven by
pent-up demand.
FPT 8M 2022 Update
28-09-2022
: FPT
: Technologies
: Tung Do
Tags: Business Update
- 8M-2022 Revenue reached VND 27 trillion (+24% YoY) while NPAT-MI amounted to VND 3.4 trillion (+30% YoY), respectively fulfilling 63% and 57% of our full-year forecasts.
- Earnings results trailed behind our forecasts mostly due to softer-than-expected Education and Investments segment’ profit, while Technology and Telecom segments’ earnings are in line with our expectations, respectively fulfilling 63% and 66% of our full-year estimates.
- Technology segment continues to lead the growth with revenue and PBT respectively growing by 24% YoY and 25% YoY, while those of the Telecom segment increased by 17% YoY and 22% YoY, respectively.
- Current TP of VND 110,300 (implying a total return of 40% as of Sep 27, 2022) is under review as we are pending the revision of the Education and Investments segment’s profit.
GMD – Headwind in the short-term
27-09-2022
: GMD
: Logistics
: Thao Nguyen
Tags: Business Update
- In 2Q2022, the company posted revenue/NPATMI of VND 978/288 bn (or USD 41/ 12 mn), +30%/+103% YoY. Despite a decline of 2% QoQ/-20% YoY in volume in that quarter (exl. Gemalink), the company’s gross profit margin broadens by 456 bps QoQ /211 bps YoY to 45% thanks to better cost management.
- In early 3Q2022, total throughput has reflected the cooldown of trade activities in Vietnam. In 8M2022, the Hai Phong area was the key driver +10% YoY while Vung Tau and HCM landscape only climbed by 1% YoY.
- We think that the stock price is hard to perform well in the short term as we expect that GMD will encounter a short-term headwind of global trade cooldown due to high inflation in Vietnam’s key trading partners. However, the company has bright long-term prospects through the 2nd phase of Nam Dinh Vu and Gemalink Terminal. Our latest target price is VND 61,100, offering an upside of 30% compared the closing price as of Sep 27th, 2022. Hence, we recommend to BUY this stock.
The prospect of raising the regulatory interest rates
26-09-2022
: VDS
: Macroeconomics
: Ha My
Tags: Interest
- Even more hawkish Fed after the September meeting.
- The dong can depreciate 4-5% this year.
- The prospect of raising the regulatory interest rates
PVS – Short-term outlook relies on big projects whereas renewable energy drives long-term potential
23-09-2022
: PVS
: Oil & Gas
: Vu Tran
Tags: Business Update
- Although revenue went up strongly thanks to
mechanics & construction (M&C) segment, 2Q2022 and 1H’s profit as well
dropped compared to the same period last year.
- In details, revenue in 6M2022
reached VND 7,579 billion (+33.6% YoY), NPATMI in contrast was only VND 223 billion
(-24.7% YoY).
- We project that total revenue and NPATMI will
come at VND 16,584 billion (+16.8% YoY) and VND 663 billion (+10.3% YoY) for
the whole year 2022. Then, 2H 2022 business result will outperform the first
half’s.
- Currently, PVS is expected to gain large backlog
in the M&C segment thanks to Block B project. However, the project's FID
has not yet finalized even though it’s expected that FID could be announced in
July 2022. The prolonged delay of the project will affect PVS's business
results in the next 1 or 2 years as the company has not won many huge backlock
projects so far. PVS's long-term potential comes from switching to the
renewable energy industry as an investor and general contractor. Hence, we
maintain a conservative view on PVS. The target price of the stock is
VND21,500 per share. P/E 2022 forward at this target price is 21.1x.
Update Decree 65/2022 for offering and transaction individual corporate bonds
22-09-2022
: VIC
: Real Estate
: Anh Tran
Tags: Policies
- Stricter regulations on the definition of professional investors are likely to significantly limit the number of individual investors that can participate in the corporate bond market in coming time. Besides, it is expected to weigh on the credit demand of the banking system in 2023, when the value of matured bond hike.
- Transparency of information and better protection of investors' interests through stricter regulations on issuance. Compared with Decree 153/2020, Decree 65/2022 requires businesses to be more transparent about the information on issuance and use of capital and control the time of issuance and information disclosure. Additionally, we also see that the position of investors is strengthened through the right to force issuers to buy back in certain cases.
- Decree 65/2022 does unlimited issuance purposes, which clarifies that enterprises can still issue bonds for debt restructuring.
- Enterprises offering individual bonds must register and deposit centrally at the Vietnam Securities Depository and Clearing Corporation (VSD). Compared with Decree 153/2020, corporate bonds can be deposited at VSD’s member companies. It supports authorities' control better compared to the previous period. In addition, in the long term, this will be a premise for developing a centralized corporate bond trading market when all issued corporate bonds are centralized and managed by VSD. As a result, investors' access to information and transactions will be more fluent.
FED interest rate decision
22-09-2022
: VDS
: Macroeconomics
: Bernard Lapointe
Tags: FED
- The US Fed raised its benchmark rate by 75 bps on Wednesday.
- This is the third such rate hike in a row, taking the funds rate to 3-3.25%.
- FOMC is split between 100 and 125 bps hike for rest of the year
IPM – IMP4 factory officially meets EU – GMP standards, which will make a significant contribution to revenue in 2023
21-09-2022
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: Business Update
- Accumulated 8M2022, revenue and PBT reached VND 954 billion (+20.2% YoY) and VND 171.4 billion (+18.3% YoY), respectively completing 65.8% and 62.3% of the annual plan. The pharmacy sales channel (OTC) continued to maintain strong growth as it reached 41.7%, while the hospital channel (ETC) grew -2.1% YoY but showed some recovery.
- The IMP4 factory was officially announced by the Ministry of Health to meet the EU – GMP standards in 09/2022. This is the factory with the largest total investment capital of IMP, carrying a value of VND 470 billion to produce non-betalactam drugs with the aim of helping IMP penetrate deeper into the ETC channel.
- 8M2022, IMP won drug bidding packages worth VND 626 billion (of which 74.5% were Tier 2 drugs), but 50% lower than the VND 1,266 billion in 8M2021. We believe that the hospital delays in the centralized bidding planning process caused a sharp drop in the total value of the package in general and for IMP in particular.
HPG – Profits to Recover from Q4
20-09-2022
: HPG
: Materials
: Tam Pham
Tags: Business Update
- Steel production costs could drop significantly in Q4
- Selling prices started to regain, but slowly
- Q3 to be the trough of 2022 profit; construction steel to recover more quickly than flat steel. Q3 revenue and PAT could come at VND 33,821 bn (-12.5% YoY) and 3,325 bn (-78% YoY).
- Dung Quat 2 update: Commencing on May 2022, the project is in the land clearance stage. Phase 1 will come into operation from mid-2024 and phase 2 from end-2024.
- HPG stock is trading at PER of 4.5, significantly lower than average PER of 8.3 in the last 5 years. As the profit of 2H2022 is expected to be low, compared to the hike of 2H2021, there will not be much accelerate momentum for stock price until the end of the year, per our view. Our valuation is being revised to reflect the new developments in demand in the large markets and the effects of recent selling price rises. We currently have a target price of VND 33,000/share, equivalent to a total return of 43%, based on the closing price of September 20th, 2022.
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