VPB – Reduced Provision Pressure Boosts Profit Growth Outlook for 2024
17-05-2024
: VPB
: Banking
: Tung Do
Tags: banking VPB
- Q1-2024 PBT reaches VND 4.2 trillion, up 64% YoY: The growth is attributed to a 20% increase in the parent bank's PBT and a 52% YoY reduction in FE Credit's losses, achieving 18% of the full-year PBT target.
- Projected 2024 Consolidated PBT to amount to VND 20.6 trillion, up 87% YoY: This growth is primarily driven by FE Credit's projected PBT of VND 700 billion (versus a VND 3.7 trillion loss in 2023) and a 36% YoY increase in the parent bank's PBT. Key growth drivers include a 15% YoY reduction in consolidated provisioning expenses due to stricter credit policies and a 30 bps YoY expansion in the consolidated NIM to 5.9%.
- Target Price and Recommendation: Using the Residual Income and P/B valuation methods, we arrive at a target price of VND 23,100, implying a 24% total expected return (including a VND 1,000 cash dividend per share). We recommend BUY for VPB
GMD - A bright picture in Q1-FY24
16-05-2024
: GMD
: Seaports
:
Tags: Seaports GMD
- In Q1-FY24, the throughput of GMD's port system reached 908 thousand TEU (+55% YoY). This significant increase in volume was driven by contributions from the southern port segment. During this period, GMD did not have any new service from shipping lines.
- In Q1-FY24, revenue and NPATMI reached VND 1,006 billion (+11% YoY) and VND 559 billion (+171% YoY), respectively, completing 24%/36% of our forecast.
- For 2024, the forecast revenue will reach VND 4,154 billion (+8% YoY). We have increased NPATMI to VND 1,540 billion (-31% YoY), as GMD recorded higher abnormal profits than our previous forecast.
- Given the better-than-expected Q1-FY24 results, we use the sum-of-the-parts (SOTP) valuation method, raising the TP for GMD to VND 91,200 per share, with a cash dividend of VND 1,200, equivalent to an expected total return of 11%. We maintain the recommendation to ACCUMULATE for GMD.
TNG – Attractive story with high order
15-05-2024
: TNG
: Textile & Garment
: Hiển Lê
Tags:
- Q1-2024 revenue reached VND 1,354 billion (or USD 54.16 mn) (+1.4% YoY) due to improvements in both volume and selling prices. The gross profit margin increased by 60 bps compared to the same period last year. However, total selling and administrative expenses rose by 10% YoY, resulting in a 4% YoY decline in NPAT-MI to VND 42 billion (or USD 1.68 mn).
- The company has already secured sufficient orders until Q4-2024. We estimate that Q2-2024 revenue and NPAT-MI will be VND 2,256 bn (or USD 90 (+18% YoY) and VND 109 billion (or USD 4.36 mn) (+88% YoY), respectively, assuming that the number of production lines reaches 346 in Q2-2024 and that revenue per production line increases by 5% YoY due to a 5% YoY increase in order selling prices.
- For 2024, we project revenue to reach VND 7,866 bn (or USD 314 mn) (+11% YoY), assuming the total number of production lines reaches 367 with an increase of 3-4 lines per month and selling prices rise by 5% YoY. Consequently, NPAT-MI is projected to reach VND 299 bn (or USD 11.9 mn) (+37% YoY). Adjusted EPS for 2024, accounting for the equivalent bonus and welfare fund, is VND 2,367 (+23% YoY).
- We recommend a NEUTRAL rating with a target price of VND 25,500 per share for a 1-year outlook, based on an average 4-year target P/E of 8.5x. Plus expected cash dividend of 400 VND/share, the expected 12-month return is 6% compared to the closing price of VND 24,500 per share as of May 15, 2024. The target price currently does not include the potential revenue from leasing 10 hectares in the Son Cam Industrial Zone.
Decelerating Job Growth Sparks Talk of Rate Cuts in 2024 for the US
14-05-2024
: VDS
: Macroeconomics
: Luân Phạm
Tags:
- The slowdown in job growth is a welcome moderation.
- The potential downturn in the labor market over the coming months.
- Increasing inflation continues to warrant consideration for rate cuts.
MSN – The potential growth of the consumer-retail segments is the highlight
13-05-2024
: MSN
: Consumer Staples, Food, Beverage & Tobacco
: An Nguyen
Tags: MSN MCH MSR MML WCM
- Based on the improvement of Q1 2024 results and business strategies of the consumer-retail businesses, we believe that MCH, WCM, and MML will keep growing in the next three quarters of 2024. The positive sales growth of the consumer-retail segments will compensate for the weak sales growth of the non-consumer-based segment (MHT).
- We believe that the 2024 net profit will grow at a higher pace than the revenue thanks to (1) cost optimization strategies; and (2) 2023 low base effect. 2024 Net sales and NPAT-MI is predicted to be VND81,545 bn (or USD3,210 mn; +4.2% YoY) and VND1,761 bn (or USD69 mn; +320% YoY), respectively.
- Based on SoTP valuation method, our 2024 target price for MSN stock is VND85,600. Based on the 12-months expected return of +21% compared to the closing price on May 13rd 2024, and the rationale of 1) 2024 net profit should grow at triple-digits; and 2) the potential strong growth of consumer-retail business in the upcoming years, we have a BUY recommendation on this stock for the long term.
Is gold an attractive investment for now?
10-05-2024
: VDS
: Macroeconomics
: Ha My
Tags:
- China is the center of the global gold rally.
- Factors that impact the gold price.
- Will global gold prices rise higher for longer?
LHG – Highlights was still on ready-built- factories leasing segment
09-05-2024
: LHG
: Industrial Land RE
: Hung Le
Tags: LHG
- Long Hau Corporation (LHG) has recently released its financial results for the first quarter of 2024, reporting revenues of VND 76 billion (USD 3 million), a 34% decline compared to the same period last year. Net profit after tax (NPAT) was VND 31 billion (USD 1 million, -38%YoY), falling short of our previous expectations of VND 60 billion. The significant downturn in business results is primarily due to the slow progress in revenue recognition with the Orfiood VN Trading & Import/Export Company, with whom a contract was signed in the fourth quarter of 2023.
- The investment progress of the Long Hau 3.1 project is showing more positive prospects as major bottlenecks related to land acquisition and land use fee payments have seen significant improvements. With the scenario of settling the 7th and 8th land use fee payments by the end of this year and early next year, the availability of commercial land ready for lease has substantially increased (25 hectares out of the remaining 43 hectares can be developed and commercialized). We believe that LHG can further accelerate its sales pace in the coming years. Moreover, LHG often confidently speeds up sales in existing areas when new projects are approved. We expect An Dinh to be a project with an investment policy approved this year.
- We have raised our target price to VND 65,000 per share because we have (1) recalculated the remaining capex needed to complete the LH3.1 industrial park project based on the current investment status disclosed by the company, and (2) increased the exchange rate to VND 25,200/USD to convert the value of lease contracts listed in USD. Coupled with a cash dividend of VND 1,900 per share over the next 12 months, the total expected return will be +97% compared to the closing price on May 8, 2024
FRT – Ambition to build a comprehensive healthcare ecosystem in the long-term
08-05-2024
: FRT
: Retailing
: Hung Nguyen
Tags: FRT
- In Q1-2024, FRT's net revenue and NPAT-MI recorded VND 9,042 bn (or USD 377 mn, +4.0% QoQ, +16.6% YoY), and VND 39 bn (net loss of Q1-2023: VND -5 bn), respectively. It is due to the better-than-expected performance of Long Chau while FPT shop narrowed its net loss based on the improvement of gross margin, reached 13.4% (+393 bps YoY, +198 bps QoQ).
- We believe that Vietnamese preventive healthcare (immunization) is the compelling land for Long Chau in the middle-term. Given Long Chau’s aggressive strategies against other modern pharmacy chains and the fragmented characteristics of vaccine market with the shortage in public vaccine station counts, we suppose that this chain will inch up its market share over the next 5 years. In 2024, we project its’ net revenue and NPAT to be VND 847 bn and VND -78 bn, respectively.
- Based on the Sum of the Parts (SoTP) valuation method, we have revised our target price for FRT to VND 174,500 per share, up from VND 139,500 per share, on the pillars of (1) adding Long Chau vaccine factor in our forecast, and (2) revising up Long Chau’s target FY24 P/S from 0.85x to 1.0x regarding its faster-than-expected revenue expansion by Long Chau vaccine centers. Hence, we have ACCUMLATE recommendation for FRT stock with the expected return for the next 12 months of 7.4% compared to the closing price of VND 162,500/share on May 8th, 2024.
Yellow Phosphorus segment – Ready to take off thanks to the growth of EV industry
07-05-2024
: DGC, CSV
: Chemicals
: Ngan Le
Tags:
- Yellow phosphorus (P4) plays an important role in the production of semiconductor and LFP battery. LFP is currently the most popular EV battery thanks to lower production costs than traditional ion batteries and high safety. The global LFP battery market share is forecasted to increase from 30% in 2023 to 48% in 2024, leading Vietnam's P4 export volume to increase by 3.3% YoY.
- Vietnam is the world's largest exporter of yellow phosphorus, however, due to technological limitations, most of P4 producers in Vietnam only export raw products rather than participating deeply in the industry's value chain.
HDG – Supporting factors from policy movements
06-05-2024
: HDG
: Real Estate, Utilities
: Thach Lam Do, CFA
Tags: HDG
- For 2024, we expect the mild recovery in key businesses, especially from 3Q24, with the probability of El Nino will decrease and being replaced by a Neutral/La Nina phase, supporting hydropower plants’s output. As a result, we estimate HDG's total revenue to reach VND 2,800bn (USD 114mn, -3%YoY) and the gross profit of VND 1,806bn (USD 73.7mn, +5%YoY), also with 2024 NPAT-MI of VND 786bn (+10%YoY, USD 32mn, equivalent to 2024 bussiness plan). The 2024 equivalent EPS is VND 2,570.
- We are aware that HDG’s projects have legal issues, with: 1/ Real estate projects in the HCMC depend on the program of implementing commercial housing projects by obtaining land use rights with other land (the land origin in the project is mostly non-residential land), 2/ Transitional renewable energy projects are waiting for a new pricing framework to have an accurate estimation of the project's profitability. With the expectation that the Government will step up to resolve these issues in 2024, we expect HDG projects to be able to restart in 2025 - the basis for determining their value in the valuation model.
- HDG is the notable company for the long-term portfolio, with: 1/ Power plant portfolio and high potential land fund, 2/ Legal completion (for real estate projects) or new pricing framework (for transitional renewable energy projects) are supporting factors for the business revaluation in the period 2024-2025. Using the SoTP (Sum-of-the-parts) method, we maintain the target price of VND30,900/share (Upside +16%, including cash dividend of VND500/share), equivalent to an ACCUMULATE recommendation for Hado Group Jsc.
ACV - Q1-2024 Core Profit Doubled on Robust International Passengers Growth and Reduced Provisioning Expenses
03-05-2024
: ACV
: Aviation
: Tung Do
Tags: Q1-2024 Update Aviation
- Despite flat total passenger traffic compared to the same period, ACV's aviation service revenue recorded a 20% YoY growth due to the strong international passenger volume growth (+48% YoY), resulting in a 19% YoY growth in consolidated revenue.
- ACV recorded a profit of VND 100 billion from the exchange rate gain due to the slight depreciation of JPY during the period, while in the same period of 2023, the exchange rate loss was VND 770 billion.
- Due to ACV having fully provisioned bad debts from Bamboo Airways, Pacific Airlines, and Vietravel Airlines in the previous quarter, the provision expenses for doubtful receivables significantly decreased in this quarter to VND 175 billion (-85% QoQ and -35% YoY).
- Consolidated NPAT increased by 79% YoY, reaching VND 2.9 trillion. Excluding profit from bay management, ACV's NPAT doubled to VND 2.6 trillion.
- With Q1-2024 financial results exceeding expectations, the current target price is VND 96,200 and the 2024F forecast are under review.
HAH - Profit continues to decline, but tends to stabilize in Q1-FY24
02-05-2024
: HAH
: Seaports
: Quan Cao
Tags: Seaports HAH
- In Q1-FY24, net revenue and NPATMI reached VND 704 billion (+7% YoY) and VND 60 billion (-50% YoY) respectively, completion 21%/20% of the annual plan and 23%/20% of our forecast for 2024.
- In Q2 and Q3-FY24, HAH is expected to receive three new vessels with a capacity of 1,700 TEU each, including one vessel participating under the BCC contract operated by An Bien Shipping Lines Corporation. Thus, HAH's fleet will be increased to 15 vessels with a total capacity of 21,000 TEU by the end of 2024.
- For 2024, forecast revenue and NPATMI are expected to reach VND 3,146 billion (+20% YoY) and VND 294 billion (-24% YoY), respectively, corresponding to an EPS of 900 VND.
- Using the multiple method, the target P/B and EV/EBITDA are 1.7x and 6.4x, respectively. We recommend ACCUMULATE with a target price of 43,500 VND per share.
17-05-2024
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