Pig prices are unlikely to decline much

China re-herd of pigs went well, causing the price of animal feed materials to increase strongly and it is expected to stay at high level in the future. Although the supply of pigs in Vietnam is increasing rapidly, the breeding cost increased together with the animal feed prices, causing the price of pork (live weight) to not decrease much. This situation will help large companies who have their own breeding pigs like Dabaco to grow their profits by expanding their sale volume.

HSG update – Strong performance in 2Q and 3Q FY2020-2021

Favorable market conditions will be supportive factors for HSG’s 2Q and 3Q bottom line. Therefore, we think investors can consider a short-term trading opportunity. Per our estimation, HSG’s TTM EPS at the end of 3Q will be VND 4,300. Assuming a 7.7x PE (20% discounted from HPG’s PER), the share price can go up to VND 33,000. However, in the longer term, NPAT can revert to the normal level. At the current market price, the FY2020-2021 forward PE is 8.7x, which we think is already fair, somewhat overpriced considering that next year's NPAT growth will be -39%. Therefore, we recommend to MONITOR the stock to see if there is an investment opportunity for the long term.

REE: AGM update

We maintain our target price for REE at VND 54,000, offering an upside of 3% compared to the closing price on March 31^st, 2021. Hence, we recommend to accumulate this stock. Our new target price for REE will be published in our next report.

US: Recent NABE Survey

Highlights.

Comments on recent events: Moody’s & credit quota

• Moody’s lifted Vietnam’s outlook to positive
• How can we interpret recent rumors on lower credit growth quotas?

BMP – PVC resin price reached a historical high

• PVC resin price reached a record high level during March, USD 1,400 per ton.
• Plastic pipe companies’ profit margin is going to shrink strongly.
• 2021 earnings are likely to be lower than our expectations.
• BMP is currently rated “NEUTRAL” on our list, with a VND 57,300 target price and VND 4,000 cash dividend in the next 12M.

PNJ 2M-2021 Results: Solid retail and gold bar sales led the growth

• Revenue jumped by +37.4% YoY to VND5.0Tn, primarily driven by significant gold bar sales of VND1.6Tn (+94% YoY) while retail sales hit VND2.6Tn (+15.9% YoY).
• Feb-2021 Retail sales growth accelerated to 21.5% YoY from 10.0% YoY in the previous month partly owing to surging promotion activities.
• Given the larger contribution of gold bar sales and higher marketing spending, GPM and net profit margin contracted by -3.8 pps and -1.8 pps, respectively, to 18.4% and 7.6%.
• 2M-2021 net sales/NPAT have completed 26%/30% of our full-year forecast. Pending a review on the current TP of VND 94,000, implying a total stock return of 14% consisting of a 2% dividend yield, as of Mar 24^th, 2021.

VHC – 2021: Profit recovery may be limited due to pressure in the pangasius segment and the product diversification strategy

The US market will lead the pangasius segment's growth in 2021. Volume increase will be the main factor driving sales growth, while pangasius selling prices will only recover slightly. Profit margin will shrink under the pressure of high raw material prices due to the material shortage and rising feed prices. The year 2021 is also a pivotal year for the product diversification strategy with large investments and expenses. We are going to reflect the effects of the new strategy on the stock valuation when detailed information is revealed. At this point in time, our valuation for VHC is around VND 46,200/share. With an expected cash dividend in the next 12 months of VND 1,000/share, the total return will reach 14% based on the closing price on March 23, 2021. We recommend ACCUMULATING VHC.

Robust trade growth in 2021 thanks to the US stimulus and the vaccine rollout

• Buoyant trade growth in Jan-Feb 2021.
• Manufactured products were a major reason for the surge of exports.
• Uneven recovery of external demand.
• The US stimulus package will be a boon for Vietnam’s exports.