KSB – 1H2019 Update

BImico (HSX: KSB) specializes in the mining and processing of building stones. The firm owns four quarries:  Tan Dong Hiep, Phuoc Vinh, Tan My and Thien Tan. In addition, the company also operates in the industrial park sector, with a total of 500ha land area in Binh Duong province. In 1H 2019, KSB posted revenue and net profit of VND 589 billion (+12% YoY) and VND 153 billion (flat YoY). Gross profit for the stone building and industrial park businesses were VND 180 billion and VND 70 billion, respectively.

PC1- 1H2019 Update

PC1 had a decent 1H as it completed 50% of its 2019 revenue target and 55% of its NPAT target. PC1’s 1H2019 business results achieved 49% and 58% of our 2019 estimations for revenue and NPAT respectively. PC1’s 1H2019 revenue went up by 24% yoy because the construction segment doubled its revenue. However, the bottom-line decreased by 19% due to the drop in the real estate segment’s contribution into NPAT as PC1 had no new projects to handover in 1H2019.

Vietnam economy can be affected by Japan-S. Korea’s tension

While the US-China trade war has not been resolved, tensions between Japan and S. Korea have accelerated. It started to rise since S. Korea’s Supreme court ordered Japanese companies to financially compensate Koreans workers and families affected by forced labor in World War II. Even though officials of both sides have met several times since then, there is no sign of progress.

Samsung in Vietnam will be fine in August and September. The production will peak in next few months as Samsung has just released the Galaxy Note 10. However, if Japan continues to tighten its specialized products export to S. Korea, Samsung’s production in 4Q will be affected. As a result, the Vietnam economy could be affected

VNM – Domestic Demand to Lead Growth

Management stated that new product lines launched in Q2/2019 have been received favorably by consumers. This is a positive signal for the demand for dairy products in the second half of 2019. Rong Viet Securities estimate the fair value of VNM at VND 134,000/share, equivalent to a forward P/E of about 22 times. We recommend to ACCUMULATE the stock.

MWG – the definition of flexibility in retail

Having found a certain success for Bach Hoa Xanh, MWG is replicating it to other regions and the results are promising so far. Even though break-even is not yet reached, Bach Hoa Xanh is doing great in terms of sales growth and customer awareness. Therefore, becoming profitable is just a matter of time in our opinion. Regarding The Gioi Di Dong and Dien May Xanh, the new CEO is bringing fresh ideas with new strategies to growth with more stores and an increase in same stores sales. Even though the stock price has gone up significantly, we believe it is still undervalued. Hence, we maintain our BUY recommendation.

FMC – 1H2019 Result Update

While exports of the industry in the first half of this year fell due to US- China trade tensions disturbing traditional shrimp trade flows across the globe, oversupply resulting from heavy investments in shrimp production by world major producers and the BREXIT event deteriorating consumer confidence in Europe, FMC still kept its impressive and sustainable profit growth. Product strategies announced at the 2019 AGM have proven its ability to improve profits.

BMP – Tracking the Annual Guidance Closely

BMP’s 6M2019 performance was in line with its guidance as most of the key figures have reached approximately 50% of the annual guidance. The company sold 50,800 tons of plastic pipe products during 6M2019, completing 52% of the annual target. Its revenue grew 15% yoy and was equivalent to 49% of the annual guidance. Its net profit reached VND 210 billion, also 52% of the annual target but was 6% lower yoy.

HAH – 2Q2019 Business Update

HAH's 2Q2019 business results started to show positive signs thanks to the strategic shift from port operation to container shipping back in 2014. Thanks to the early preparation, up to now, the shipping operation has gradually stabilized in terms of cargo volume and helped to ensure operational efficiency for Hai An Port itself. For 1H2019, container shipping segment has started to replace port operation as the largest contributor to the company's gross profit. Accordingly, gross profit from shipping has increased by 63%, accounting for 52% of gross profit structure of HAH. Furthermore, it is expected that the Government will implement policies to support the shipping industry in the near future. We believe that HAH can fully benefit from this owing to competitive advantages of the fleet.

Unexpected Aggressive Rate Cuts by Asia-Pacific Central Banks

Yesterday, there were three more central banks cutting their policy rates rather unexpectedly, namely India, Thailand and New Zealand (Figure 1). The level of aggressiveness really stunned us as well as surveyed participants. Those cuts seem to be directly associated with the gloomy perspective of GDP growth, caused by the spillover effects of the trade war. Similarly to the FED, central banks still believe that “this time is different” and are actively stepping ahead to support GDP growth, whose forecasts have been revised down massively.

TCB – 1H 2019 Business Performance Update

The rapid capital increase in 2018 has lowered ROAE to less than 20% and pushed CAR to a much higher level than industry norms (13.97%). TCB wants to keep the plan of not paying any cash dividend for five years. Thus, ROAE can hardly return to 20% or more (which was previously communicated as a sustainable level by TCB) in the next one or two years. In addition, because there is no foreign ownership room left, the stock price is unlikely to recover quickly in the short term.

However, we believe that TCB still has advantages in the long term due to its to clear strategic orientation, a strong affluent customer base, advanced human resource management and efficient operations. The bank also successfully strengthened its advantages in terms of funding costs and service income from insurance and bonds services. Currently, asset quality is still well controlled and provision expenses are expected to decrease compared to previous years. Therefore, depending on their respective risk appetite, investors may consider accumulating the stock for the long-term.

PVT - 2Q2019 result update

PVT continued to show its positive performance in the first 6 months with profit growth of 16.5% even though there was no sudden income from selling an asset. With favorable factors such as (1) increasing charter rate (2) stable workload (3) new fleets investment, we keep our BUY recommendation for PVT at VND 21,300 per share, equivalent to a total return of 22%, based on the closing price on August 06, 2019.