GMD – In 2024, rapid NPATMI growth is driven by service charge and volume factors
09-11-2023
: GMD
: Seaports
: Quan Cao
Tags: Seaports GMD
- In Q3-FY23, container throughput in Hai Phong and in the Southern region were 283 thousand TEU (+4% YoY/+2% QoQ) and 487 thousand TEU (-4% YoY/+4% QoQ) respectively, in which GML's volume was 254 thousand TEU (-14% YoY/+7%QoQ). Revenue and PBT were VND 998 billion (+1% YoY / +9% QoQ) and VND 398 billion VND (+17% QoQ (excluding profit from divestment of Nam Hai Dinh Vu port)/+18% YoY), respectively.
- Forecast for Q4-FY23, revenue and NPATMI are VND 1,060 billion (-1% YoY) and VND 319 billion (+69% YoY), respectively. The high growth rate comes from the expectation that GMD will continue to maintain a high EBIT margin and GML will archieve a breakeven point in Q4-FY23, the same period recording a loss of VND 22 billion. EPS for 2023 will be VND 7,300.
- For 2024F, revenue and NPATMI will be VND 4,163 bn (+8% YoY) and VND 1,280 bn (+36% YoY, excluding profit from divestment of NHDV port), EPS will be VND 3,850. In particular, we expect that the draft amendment to Circular 54/2018/TT-BGTVT will be applied from the beginning of 2024, which will help GMD's EBIT margin continue to expand and GML escape the loss situation as in 2023.
- We use sum of the part (SOTP) valuation method and increase the target price to 76,700 VND/share, with the expected cash dividend of 1,200 VND, equivalent to a total expected return of 15%. We recommend ACCUMULTE for long-term investment.
ACB - Sustaining Growth Aligned with Market Conditions
08-11-2023
: ACB
: Banking
: Dang Chinh
Tags:
- ACB announces its Q3 results with a consolidated total operating income (TOI) of 8.4 trillion VND (+18.8% YoY, +5% QoQ). Within this, net interest income (NII) amounted to 6.2 trillion VND (+2.9% YoY, -0.6% QoQ), and non-interest income reached 2.2 trillion VND (+109.2% YoY, +24.6% QoQ). The driving force behind the growth in non-interest income includes (1) revenue from securities activities at a high 950 billion VND (+98% QoQ) compared to a loss of 42 billion VND in the same period last year, (2) maintaining high foreign exchange income of 316 billion VND (+229% YoY, -3.6% QoQ), offsetting the decrease in (3) fee income, which was 764 billion VND (-12% YoY, -5% QoQ). Accumulated over 9 months of 2023, the bank's PBT reached 15 trillion VND, a growth of 11.3% YoY, and it has achieved 75% of its plan.
- The Net Interest Margin (NIM) decreased by 15 basis points to 3.98% in Q3/23 due to a 64-basis point drop in ACB's asset yields, while funding costs decreased by 54 basis points. This can be explained by: (1) the balance sheet's specific nature, as the bank's loan portfolio mainly consists of short-term loans, while deposit structure is focused on long-term deposits, reflected in the relatively low SFLR of about 17.4%, and (2) weak credit demand of the industry.
- ACB's non-performing loan ratio for customer loans is 1.21%, increasing by approximately 14 basis points compared to the previous quarter and 19 basis points YoY. Of this, internal non-performing loans are only recorded at 1.08%, with the remaining increase being recognized when cross-referencing with the CIC (Credit Information Center) for ACB customer loans in other banks.
- The projected PBT for 2023 for ACB is 17%, reaching 20 trillion VND. This is equivalent to the PBT of 5 trillion VND (+38% YoY) in Q4/23, indicating that ACB will show further improvement in core business operations as net interest income improves and provisions compensating for the reduced contribution from securities activities (government bonds), which was significant in Q3.
- The projected PBT for 2023 and the corresponding earnings per share (EPS) are 20 trillion VND (+17% YoY) and 4,076 VND, respectively. We maintain a BUY recommendation for ACB with a target price of 29,000 VND, equivalent to a return of 27% compared to the closing price on November 8, 2023
HSG – Tough times have passed
07-11-2023
: HSG
: Materials
: Thach Lam Do
Tags: HSG
- In 4Q of fiscal year (FY) 2023, HSG recorded revenue of VND 8,235bn (USD 336mn, -28%YoY, -7%QoQ), with sales volume of 390 thousand tons (+25%YoY, +4%QoQ), owing to the volume in foreign markets (North America, EU, Asia). The 4Q gross profit margin (GPM) recovered to 13.2%, while SG&A costs decresead to VND 627bn. HSG recorded a 4Q NPAT-MI of VND 438bn (improved significantly compared to 3Q).
- For FY024, the company thinks that: 1/ the steel market has passed the most difficult period; 2/ 2024 output can reach 1.56 million tons (+11.4%YoY, contributed by domestic and foreign markets); 3/ focusing on perfecting the Hoasen Home system.
For FY2024, we forecast that HSG can record revenue of VND 34.8tn (VND 1.42bn, +10%YoY) and GPM of 11.6% (equivalent to the average level in the 2H of FY2023). HSG's NPAT-MI can reach VND 782 bn (34x times higher than FY2023). 2024EPS can reach VND 1,180. - We use two methods (FCFE and PB) to evaluate the stock. Our fair value comes at VND 21,500 value per share, implying a total return of +9% as of the closing price on November 07th, 2023, equivalent to an ACCUMULATE recommendation for Hoa Sen Group Jsc.
ACV – Q3-2023 Result Update: Provisioning for Receivables from Local Airlines Weighed on Core Profit Growth
06-11-2023
: ACV
: Aviation
: Tung Do
Tags: ACV
- The international passenger volume (+112% YoY) continues to support core revenue growth (+29% YoY).
- ACV had to set aside nearly VND 700 billion in provisions for overdue receivables, in which VND 465 billion for Bamboo Airways’ and VND 155 billion for VJC’s, causing EBIT to only grow by 11% YoY.
- The depreciation of JPY/VND exchange rate during the period helped ACV record VND 480 billion in unrealized exchange rate gains, nearly unchanged vs same period last year, thus not providing much support to NPAT growth (+14% YoY).
- Accumulated 9M-2023 revenue and NPAT (excluding gains from the State’s airfield assets) reached VND 13,100 billion (+60% YoY) and VND 6,011 billion (+16% YoY), respectively, and were 78% and 75% completed. Our forecast revenue and PAT for the whole year.
- Due to the worse-than-expected trend of provisioning for bad receivables, 2023 and 2024 forecasts for are under review
PVD – 3Q2023: good outcome
03-11-2023
: PVD
: Oil & Gas
: Ngan Le
Tags:
- In 3Q2023 PVD reported revenue of VND 1,381 bn (USD 58.3 mn; +11% YoY; -2% QoQ), while NPAT-MI went up to VND 151 bn (USD 6.4 mn), from a loss of VND 34 bn (USD 1.4 mn) in the same period last year.
- Interest expenses and exchange rate difference loss outweighted the improvements in gross margins for both drilling and well services. Consequently, 3Q2023 NPAT-MI decreased 16% QoQ.
- In 2024, we expect NPAT-MI to be around VND 700 bn (USD 29 mn; +50% YoY), and a VND 1,231 EPS. We propose to ACCUMUALTE and keep a target price of VND 30,900/share, which translates to a 18% return as of the closing price on Nov 2nd.
KBC – Q3/2023’s business results: An unexpected bass note
02-11-2023
: KBC
: Industrial Land RE
: Hung Le
Tags:
- KBC released its Q32023’s financial results with revenue of VND 247 billion (+22%), parent company shareholders' NPAT reached nearly VND 14 billion, plunging by 99% over the same period, due to the delay of handover for tentants and the base earning result in Q22023 caused by booking and re-evaluating of investment in Saigon - Da Nang company. If excluding the profit from revaluation, Q3/2022 NPAT will change from profit to loss.
- Phuc Ninh and Trang Cat are two projects with legal bottlenecks and large land funds for business which have potential to produce the breakthrough business results in the near future. The remaining IP land fund that are now underway will be approximately 142 ha by the end of 2023. In which, Tan Phu Trung Industrial Park has 58 ha, and Nam Son Hap Linh Industrial Park owns 84 ha; this is sufficient to secure the business performance within the following two years while waiting Tan Tap, Loc Giang, and Trang Due 3 to be ready.
- In a positive case, KBC will hand over all signed contracts (50 ha) in Q4, equivalent to completing the handover of 182 ha in 2023, and will record total revenue of VND7,536 billion (+693%YoY), completing 83% of the annual plan. Additionally, NPAT is expected to reach VND3,059 billion (100%YoY), completing 76% of the guideline. The corresponding 2023 EPS is 3,985 VND.
- Based on the sum of components valuation method (SOTP), we maintain the target price of 40,000 VND/share from the last update. The expected return over the next 12 months is +50.0% (based on the closing price on 11/01/2023).
TCB - Several bright spots in Q3 performance
01-11-2023
: TCB
: Banking
: Chinh Dang
Tags:
- In the third quarter, TCB's total operating income reached VND 10.4 trillion (+0.8% YoY and +11.7% QoQ), indicating signs of recovery based on the quarter basis. This recovery was attributed to (1) a 15.5% QoQ increase in net interest income, driven by strong credit growth and a 42-basis point improvement in NIM compared to the previous quarter, and (2) non-interest income of 3.1 trillion VND, with a 3.8% QoQ growth. Within this category, fee income contributed VND 2.2 trillion (+11.7% QoQ) due to the robust resurgence of fees from investment banking services, driven by market liquidity recovery and bond issuance activities (+93% QoQ) and bancassurance activities (+74% QoQ); income from foreign exchange operations reached VND 124 billion, compared to a loss in Q2; and income from securities trading increased by 659% compared to the previous quarter.
- The NPL (Non-Performing Loan) ratio of TCB in the third quarter after CIC was 1.4%, an increase of 30 basis points compared to the previous quarter and a 73 basis point increase year-on-year. Within this, non-performing loans were mainly attributed to the retail and SME segments, with ratios of 2.47% and 2.16%, respectively, primarily due to the impact of the real estate market and the credit card segment. However, the Group 2 loans shown a positive trend by decreasing to 1.26% from 1.96% in the previous quarter.
- Our PBT for TCB in 2023 is expected to be more positive compared to the bank's plan presented at the Annual General Meeting earlier this year. We anticipate a more stable growth in 2024, with PBT reaching VND 23 trillion (-10.5%) and VND 27 trillion (+17.5%), corresponding to an EPS of 5,087 and VND 5,986. This means that TCB's PBT in 2H2023 is expected to improve to 11.7 trillion VND (+4% HoH and +2% YoY). Despite modest expansion potential in 2023 due to challenging conditions, we have an optimistic outlook for long-term prospects for balance sheet growth, thanks to TCB's pioneering and successful efforts in the retail banking sector and the long-term potential in the real estate sector in Vietnam. Key factors contributing to this outlook are (1) leading technology infrastructure, (2) strong capital buffer, and (3) a well-connected ecosystem, which will help the bank grow rapidly during periods of economic prosperity. Therefore, as the bank navigates through the challenging phase, improving Return on Equity (ROE) will lead to a revaluation of the bank.
- TCB is currently trading at a P/B (Price-to-Book) ratio of 0.8, which is lower than the industry average and below the bank's long-term prospects. Therefore, we recommend to ACCUMULATE TCB with a target price of 38,000 VND, corresponding to a P/B ratio of 1. However, it's important to note that, given the specific nature of the loan portfolio for businesses and individuals in the real estate sector, the pace of recovery in this industry will impact the NIM recovery through credit costs in the second half of 2023 and 2024.
HAX – Eye on Q4 2023 performance
31-10-2023
: HAX
: Automobiles
: An Nguyen
Tags:
- Q3 2023 sales reached VND1,115 bn (or USD45 mn), went down by -43.4% YoY but recovered by +39.9% QoQ. The lower-than-last year sales is due to the high base effect and challenging business environment. The bottom-line decreased at a higher pace than the top-line, reaching VND8 bn (-86.2% YoY; +166.7% QoQ). The main reason is the surge of General & Administration (G&A) expenses. HAX has not booked commission from Mercedes-Benz Group in 9M2023 yet.
- Because the demand for Mercedes cars is not strong as our expectation, we revise down the 2023/2024F net sales to VND5,087/5,375 bn (-25%/+6% YoY) from VND6,775/6,809 bn in previous forecast. However, we assume HAX will book commissions from Mercedes-Benz group in Q4 2023. These adjustments lead 2023/2024F NPAT-MI to 40%/41% lower than our latest forecast, reaching VND136/145 bn (-43%/+7% YoY), respectively. Correspondingly, the 2023/2024F EPS is revised down to VND1,456/1,557 per share.
- Based on the combination of FCFF (60%) and PER (40%) of 7.6x, our new target price is VND15,500. Adding a cash dividend of VND500, the 12-months expected return is +20.3% compared to the closing price on Oct 30th 2023. Based on 1) the growth outlook of HAX since 2024; and 2) the positive fundamental value of Haxaco has not been priced on the share price movement yet, we recommend to BUY this stock for the long term.
VIB – Retail Credit Demand Slowly Recovered; High Credit Cost Continue to Pressure Earnings Growth
30-10-2023
: VIB
: Banking
: Tung Do
Tags:
- YTD Credit growth reached 5.5% in 9M/23 (granted credit growth quota: 14.25%), a marked improvement in lending activities from just under 1% in 6M/23.
- Q3/23 TOI rose by 30% YoY as (1) NII rose by 13% YoY to VND 4.3 trillion on a 9% YoY growth in lending book and a +20 bps YoY NIM expansion; (2) NFI surged by 34% YoY to VND 1,062 Bn on robust bancassurance and transaction fees; (3) Other income reached VND 641 Bn (vs VND -5 Bn in Q3/23), mainly driven by bad debt recoveries.
- A huge amount of provision for credit losses (VND 1.6 trillion, nearly 10x YoY) outweighed TOI growth and pressured PBT growth down to -4% YoY in Q3/23. And despite high provisioning, the NPL ratio flatted at 2.47% in Q3 (vs 2.45% in Q2).
- For 9M/23, PBT amounted to VND 8.3 trillion (+7% YoY), completing 68% of the full-year PBT target.
Thermal power firms' 3Q23 business results: A mixed picture
27-10-2023
: NT2, QTP, HND, PPC
: Utilities
: Hoai Trinh
Tags:
- Some of the thermal power companies on our updated and watched list (NT2, HND, PPC, QTP) have reported Q3/2023 financial results. NT2's NPAT incurred a record loss of VND 123.8 bn (Q3/2022 NPAT of VND 199.0 bn), QTP's NPAT recorded VND 11.6 bn (-95.3% QoQ, -92.1% YoY), PPC's NPAT recorded VND 84.1 bn (-49.8% QoQ, -45.6% YoY), while HND recorded an impressive PAT of VND 191 bn (+5.9% QoQ, +372.5% YoY). Furthermore, investors are currently interested in the group of defensive stocks with consistent dividend yields. In this article, we will answer two questions: (1) Why do the thermal power group's businesses have mixed profits? (2) Is this group's dividend yield interesting?
- For a one-year target price on thermal power firms, our last recommendations are NEUTRAL with NT2 (TP: 25,800 VND/share), ACCUMULATE with HND (TP: 15,500 VND/share), and ACCUMULATE with PPC (TP: 15,500 VND/share). The target price for this group of defensive stocks, as well as the firms' financial forecast results, will be thoroughly reviewed in the next updated reports.
Update on monetary market in Oct 2023
26-10-2023
: VDS
: Macroeconomics
: Ha My
Tags: Monetary market
- Credit growth for the whole year is estimated at 12%.
- Interbank interest rates increased again after the most intensive net withdrawal ever from the SBV.
- The dong continues to depreciate, but the pressure is still under control.
Seaport industry – Benefit from policy and the recovery in 2024
25-10-2023
: GMD, VSC, HAH
: Seaports
: Quan Cao
Tags: Seaport
- The estimated value of exports and imports containers via sea 9M2023 was USD 146 billion (-7% YoY) and USD 97 billion (-18% YoY). In which, Vietnam's major export markets are the US, China, and the EU, with export market shares of 28%, 12%, and 11% were USD 42.5 billion (-16% YoY), USD 18.1 billion (+1% YoY) and USD 15.7 billion (-11% YoY), respectively. Vietnam's three main import markets, China, South Korea, and ASEAN, with import market shares of 35%, 12%, and 11% were USD 34.3 billion (-19% YoY), USD 12 billion (-26% YoY), and USD 10 billion (-23% YoY), respectively.
- Accumulated 9M2023, total container throughput in Hai Phong and Vung Tau were 4.6 million TEUs (-2% YoY) and 3.5 million TEUs (-14%) respectively. The deepwater port cluster in Vung Tau serves mainly long distance routes to Europe and the US. When trade flows are gradually recovering, throughput in Q3-FY23 also improved compared to the first half of the year. Meanwhile, the Hai Phong area is a destination for shipping lines operating Intra-Asia with a less severe decline.
- After discussing with the BOD of major seaport companies in Hai Phong, VSC and GMD, we found consensus and determination in proposing amendments to Circular 54/2018/TT-BGTVT. Accordingly, two companies expect that the MoT will officially announce approval of the draft amendments in November 2023 and the new circular will apply from January 1, 2024.
09-11-2023
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