PNJ – Demand for gold bar is expected to drive positive sales growth in Q4 2023
12-12-2023
: PNJ
: Retailing
: An Nguyen
Tags:
- In Oct-2023, PNJ posted revenue and net profit of VND3,007 bn (+33.6% MoM; +1.6% YoY) and VND193 bn (+108% MoM; +31% YoY), respectively. Although the Retail and Wholesales segments continued to decrease YoY, the declining growth rate is the lowest in the last 9 months. The gross margin improved, supported by higher contribution from the retail business
- Based on the performance of PNJ’s gold bar segment in 10M2023, we predict that it will continue to be the growth driver for Q4 2023 sales as well as the whole year of 2023. In Q4 2023 and 2023, net sales is expected to reach VND8,516 bn (+23.1% QoQ; +2.6% YoY) and VND31,893 bn (-5.9% YoY), respectively. Correspondingly, Q4 2023 and 2023 net profit will be VND452 bn (+78.7% QoQ; -3.0% YoY) and VND1,792 bn (-0.8% YoY), respectively. The equivalent 2023 EPS is VND 5,461
- We downgrade the expected 2024 SSSG (same-store sales growth) rate to -2% YoY as we believe that Vietnamese people disposable income will still not be positive in 2024, limiting their spending on jewelry products. As a result, 2024 revenue is adjusted down to VND33,818 bn (+6% YoY). Similarly, the net profit and EPS are reduced to VND1,982 bn (+11% YoY) and VND5,705 (+4.5% YoY), respectively
- Based on the combination of FCFF valuation model (50%) and multiple comparison (50%), with an applied 2024 P/E of 15.0x, our new target price is VND86,200 which is 2% lower than the latest target price (VND88,000) in Jul-2023. Adding a cash dividend of VND2,000/share, the 12-month expected return is +10.3% compared to the closing price on Dec 11th 2023, equivalent to an ACCUMULATE recommendation
SCS – Update on 11M2023 Business and 2023F-24F Forecasts
11-12-2023
: SCS
: Aviation
: Tung Do
Tags:
- Cumulative 11M-2023 cargo volume reached 123.8 thousand tons (-25% YoY). The November figure alone posted positive growth over the same period for the first time in 2023, reaching 9%, on the low base of the previous year.
- International cargo volume in 2023F is forecasted to reach 138 thousand tons (-22% YoY), leading to a decrease in revenue and NPAT of -19% YoY and -22% YoY, respectively. 2023 PAT is expected to reach VND 506 billion, corresponding to a basic EPS of 4,650 VND.
- For 2024, revenue and NPAT are forecast to reach VND 752 billion (+9% YoY) and VND 532 billion (+5% YoY), corresponding to a basic EPS of 4,900 VND.
- Maintain the target price of 74,300 VND/share for SCS, implying an expected return rate of 22% (including a cash dividend of 60% on par value) as of December 11th, 2023.
IMP - Valuation is moving towards an attractive range for long-term investment strategies
08-12-2023
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: IMP
- In Q3-FY23, revenue and NPAT were VND 467 billion (+12% YoY) and VND 70 billion (+25% YoY), respectively. In which, revenue from self-produced pharmaceuticals accounted for 95% of total net revenue. The two main sales channels, ETC and OTC, reported revenues of VND 192 billion (+15% YoY) and VND 252 billion (+5% YoY), respectively.
- Forecast for 2023F, revenue and NPAT will be VND 1,980 billion (+20% YoY) and VND 317 billion (+36% YoY), with an EPS of 3,847 VND. For 2024F, revenue and NPAT are forecasted to reach VND 2,229 billion (+13% YoY) and VND 367 billion (+15% YoY), EPS is 4,458 VND.
- We recommend a BUY for IMP with a target price of 74,000 VND per share, which represents a total return of 35%. This implies a P/E ratio for 2024F at the target price of 16.6x
PC1 – 2024 should mark a year of earnings turnaround
07-12-2023
: PC1
: Utilities
: Hoai Trinh
Tags:
- For Q4/2023, we expect PC1's NPAT-MI to be VND 196 bn (+192.9% QoQ, -0.6% YoY), with the following assumptions: (1) positive performance in the electricity and construction sectors in Q4/2023, although still lower than Q4/2022; (2) nickel mining contributing an additional 11,000 tons of ore exports in December 2023; (3) continued contributions from Nomura IP; (4) the residential RE segment, with commercial retail space sales on par with Q3/2023 (while not recording any in Q4/2022); (5) no additional forex losses, as seen in Q3/2023. Correspondingly, for FY23, we expect PC1's net revenue and NPAT-MI to reach VND 7,639 bn (-8.6% YoY) and VND 252 bn (-45.2% YoY), resulting in an EPS of VND 759/share.
- For FY24, we expect PC1's NPAT-MI to experience robust growth compared to the low base of 2023. We forecast that the company's net revenue and NPAT-MI will reach VND 9,227 bn (+20.8% YoY) and VND 496 bn (+96.8% YoY), respectively, resulting in an EPS of 1,558 VND/share. Our assumptions include (1) increased activity in construction and EPC contracting in 2024; (2) a recovery in the power generation sector, primarily hydropower; (3) the mineral segment contributing approximately 40,000 tons of ore exports when operational for the entire year; (4) additional contributions from the industrial RE sector, particularly from Yen Phong 2A IP; and (5) lower FX losses compared to 2023.
- We have a one-year target price for PC1 at VND 27,200 per share, based on two methods: the sum of the parts (SoTP) and P/E, with respective weights of 70% and 30%. Despite the positive business outlook for 2024, we believe that the growth prospects are currently priced in. Therefore, we recommend that investors consider accumulating shares when the market undergoes a significant correction at a reasonable price. Currently, with a 0% upside based on the closing price as of December 7th, 2023, we recommend a NEUTRAL rating on PC1 stock.
Stock market – The headwind went away, the market sublimated.
06-12-2023
: VDS
: Financial Services
: Hung Le
Tags:
- The global stock market showed a more positive trend in November, with many indices, including Vietnam's, witnessing significant increases compared to the previous month. This uptick was supported by several factors such as the easing of the Israel-Hamas conflict, expectations of an earlier reversal in Federal Reserve monetary policy following the latest inflation report, and investor optimism about the real estate market after the National Assembly passed new laws.
- We are not overly optimistic about the market trend in December. One of the reasons is that the macroeconomic indicators for November have not shown significant progress. Additionally, the persistent net selling trend by foreign investors in large-cap stocks continues to exert pressure on the scores in December.
- Key events in December include the last Federal Reserve meeting of 2023 on December 13th, and the anticipated go-live of the KRX system at the end of the month. Additionally, the potential state visit of Chinese President Xi Jinping to Vietnam in the middle of this month is also noteworthy.
Real estate market update – Housing sentiment has improved in Tier-I cities
05-12-2023
: KDH, NLG
: Real Estate
: Thach Lam Do
Tags: BĐS
- We see an improvement in the absoprtion rate, both in the primary market and the secondary market, in the 2H2023, especially in tier-I cities (Hanoi, Ho Chi Minh City). The improvement will be supported by: 1/Reduced lending rates which help to increase home buyers’ sentiment, 2/ Developers’ sales policies to support buyers (allowing 30-40% of total value to be prepaid until handover, partial support of the borrowing rate, offering a grace period of first 02 years for both principal and interest charge,…).
- With the sales results of companies in our coverage list, we also see a recovery in housing demand in tier I cities and surrounding areas. As a result, we believe that in the 1H2024, developers will continue to focus on projects located in tier-I cities, along with maintaining the support policy, as implemented in 2023.
- In its last session of November 2023, the 15th National Assembly passed the Housing Law (Amended) and the Real Estate Business Law (Amended), which will take effect from January 2025. The Housing Law (Amended) provides regulations for the development of social housing projects; it also adds regulations related to commercial houses and apartments to protect the rights of buyers. The Real Estate Business Law (Amended) provides regulations to increase market transparency and protect the interests of home buyers.
FMC – Futher increase in export volume
04-12-2023
: FMC
: Fishery
: Hien Le
Tags: FMC Frishery
- Net sales in Q3-2023 reached VND 1,793 billion (+2.3% YoY; +73.7% QoQ) as export shrimp volume increased by 11.4% and shrimp selling price in VND decreased by only 6.2% YoY. The NPAT-MI Q3-2023 continued to increase to VND 82 billion (+6.1% YoY; +14.7% QoQ) due to improved selling, general and administrative expense (SG&A expenses).
- Based on the projected performance in Q4-2023, we adjust 2023 revenue and NPAT-MI to VND 5,017 billion (-12% YoY) and VND 275 billion (-10.4% YoY), respectively. Reasons: (1) export volume in Q4-2023 is estimated to increase by 15% YoY, (2) gross profit margin improves due to increased shrimp output from new farming areas in Q4/2023; and (3) the ratio of S&GA expenses/revenue is stable.
- In 2024, we forecast net sales and NPAT-MI to be VND 5,517 billion (+10% YoY) and VND 325 billion (+18% YoY), respectively, due to (1) export volume increased by 10% YoY, (2) profit margin improved beacuse of the addition of 20 hectares of new farming area and the successful farming rate increased thanks to CP's high quality shrimp seed. Equivalent EPS is VND 4,921 (+18% YoY).
- We reduce our target price to 51,900 VND/share, down 2% from the previous valuation due to the lower earnings forecast compared to the latest projection (as of July 28, 2023). Plus the expected cash dividend of 2,000 VND, the expected profit in the next 12 months is 19.1% compared to the closing price of 45,250 VND/share on November 30, 2023, by (1) adjusting WACC down from 11.8% to 10.9% (2) using 2024 EPS for P/E valuation method, and (3) reducing profits of 2023 & 2024 compared to previous forecast. We recommend ACCUMULATE this stock for the long term.
PVS – Positive signal from Block B project
01-12-2023
: PVS
: Oil & Gas
: Ngan Le
Tags:
- PVS announced 3Q2023 results with revenue of VND 4,176 bn (USD 176 mn; +19% YoY; -11% QoQ). Gross margin shrank to 4.3% and higher G&A expenses led the NPAT-MI down 27% YoY to VND 141 bn (USD 6 mn).
- For 4Q2023 we expect that PVS will continue to book revenue from ongoing projects such as Hai Long OSS, Shwe Phase 3, CHW2204 and Thi Vai LPG tanker. 2023’s revenue and NPAT-MI are projected to VND 19,725 bn (USD 832 mn; +20% YoY) and VND 895 bn (USD 38 mn; +1% YoY). Correspondend EPS is VND 1,686.
- With contribution from major projects such as Block B (EPCI#1 &2), Su Tu Trang – Phase 2 and CHW2204, we forecast 2024 revenue and NPAT-MI to VND 29,147 bn (USD 1,230 mn; +48% YoY) and VND 1,351 bn (USD 57 nm; +51% YoY), respectively. Corresponding EPS is VND 2,544.
- We raise our target price to VND 36,300/share (+31% to the latest target price of VND 27,800/share) due to positive signal from Block B project, with a NEUTRAL recommendation for PVS share.
Vietnam Automobile Market: Weak demand puts pressure on profit margin
30-11-2023
: HAX, CTF, PTB
: Automobiles
: Hung Nguyen
Tags:
- In Oct-2023, total sale volume of automobile sector reached 25,639 units (+1% MoM, -30% YoY), sealed the second consecutive month of positive MoM growth. It means the signs of sales-bottoming have appeared from Aug-2023. We anticipate that the trend of recovery will keep on track in 2 months left on this year by some year-end promotion/discount campaigns and the gradual pervading of macro policy into the economy. However, we suppose that the growth would not be enormous as discretionary spendings still hampered by macro headwinds in 2023.
- The issue of large amount of inventories is not addressed in Q3-2023, which forces automobile brands/dealers to sacrifice its margin to clear all of its. We believe that the tendency of lowering the fixed prices of cars will maintain in Q4-2023, especially by the year-end shopping season, which continues to impact negatively on automobile corporate’s profit.
QNS - Revising up earnings forecast backed by the preliminary 10M2023 results
29-11-2023
: QNS
: Food, Beverage & Tobacco
: An Nguyen
Tags: Result Update 10M2023
- Q3 2023, net revenue and net profit were
VND2,467 bn (-21.7% QoQ; +7.3% YoY) and VND506 bn (-28.9% QoQ; +59.9% YoY),
respectively. The decrease QoQ of the revenue is due to lower selling volume of
the sugar segment. Net profit grew by 60% YoY thanks to improved gross margin,
driven by higher selling prices of sugar.
- Accumulated 10M2023, total revenue and net
profit reached VND8,800 bn (+24% YoY) and VND1,495 bn (+74% YoY), respectively.
The sales volume was higher than our expectations. Therefore, we revise up our
expected selling volume of sugar for 2023/2024 period to 240,000/218,160 tons.
- 2023F/2024F sales are upgraded to VND10,806/10,975 bn (+30.8%/+1.6% YoY). The expected net profit was adjusted to VND2,019 bn (+57.2% YoY) for 2023 and VND2,026 bn (+0.4% YoY) for 2024 from the previous forecasted 2023/2024 net profit of VND1,960/1,886 bn. The equivalent new 2023F/2024F EPS is VND6,564/6,588 (+55.6%/+0.4% YoY).
- Combining the FCFE valuation (50%) and SOTP
valuation models (50%), we raise our target price for QNS to VND54,000,
equivalent to an implied 2023/2024 P/E of 8.2/8.2x. Adding a cash dividend
of VND4,000, the 12-months expected return is +27.2% compared to the
closing price on Nov 28th 2023, equivalent to a BUY recommendation.
MCM – The cost pressure on the bottom-line is expected to ease in 2024
28-11-2023
: MCM
: Food, Beverage & Tobacco
: An Nguyen
Tags: Result Update Q3 2023
- Q3-2023, Mocchau Milk Jsc (Upcom: MCM) posted sales
of VND816 bn (+3.3% QoQ; -1.9% YoY). The negative YoY growth was affected by
the unfavorable income in Vietnam northern mountainous region. Net profit
increased QoQ at a lower pace than the revenue, to VND95 bn (+2.1% QoQ; -4.0%
YoY), as the surge in selling expenses.
- In the context of slowing economic recovery, we
suppose that the sales growth would be hard to illustrate high digit next year.
However, we expect that MCM ‘s profitability would improve in 2024, in the
pillar of, 1) easing raw material costs; and 2) selling costs optimization.
- We calculate that the negative expectations of MCM ‘s results has reflected on its stock price movement relying on the two main reasons. Firstly, MCM ‘stock is showing the worst performance compared to the beginning of the year among listed dairy stocks. The second is the downward trend of MCM ‘s P/E ratio which is translated into the trailing P/E of 13.1x – lower than its 3Y-Average P/E (13.9x).
- Based on the assumption that the sales still
face many obstacles to grow under the slow economic recovery, we advise
investors to closely watch MCM ‘sales growth to timing suitable opportunity to
invest on this stock.
Update on monetary market in Nov 2023
27-11-2023
: VDS
: Macroeconomics
: My Tran
Tags:
- Weak “real” credit demand.
- Banking liquidity backed to redundant when the SBV ended its intervention.
- Deposit growth of the corporate sector improved.
12-12-2023
64 
