PXS – Hoping for 2019

As an EPCIC company, PXS is suffering from the downtrend in the oil price. Because most of its revenues come from the M&C segment, the business has been experiencing a “gloomy” period for years. PXS will face another difficult year before things bottom out in 2019.

Yeah1 is about to list – an interesting case

Founded in 2006, Yeah1 Group (YEG) is the largest Fully-integrated and Multi-channel media platform in Vietnam. YEG owns the largest Youtube multichannel network in Asia and operates the 6^th biggest YouTube Multi-channel network in the world by views. With 80 percent of total revenue coming from overseas, YEG is also expanding into Thailand, Indonesia and the Philippines, looking to increase its global footprint in the international digital media and advertising industry.

SCS – Good Business but Rich Valuations

Overall, SCS has a solid business with great margins. We expect the company to maintain its bottom line growth by 20%/year thanks to its competitive advantages.  However, the stock is trading at a rich valuation of 26.6x trailing P/E.

QNS – Expecting a Better Performance in Q2/2018

QNS is leading the soya milk market with an 86% market share. In the past two years, the growth of soya milk has been slowing down. Faced with this situation, QNS has been "more active" running more marketing campaigns as well as employing experienced people in FMCG to expand the coverage of soya milk products in the market. However, even though this a potentially interesting segment, it seems that the company is facing many challenges in expanding its market share.

Fisheries - Shrimp to Be Put Under SIMP

On May 29, 2018, shrimp has been officially put under the US’s Seafood Import Monitoring Program (SIMP)

Conglomerates: Spin-off

A company would conduct a spin-off so that it can focus on managing its core products. Conglomerate using products that are unrelated to each other, therefore a spin-off would allow a company to get rid of business units that are experiencing little or no growth and focus on a product or service that has better long-term potential. In addition, if a portion of a business is going in a different direction, such as having different goals than the parent company, then it may be spun-off into its own entity. Value can then be unlocked.

Indonesia Imposing Anti-dumping Duties on Color Coated Steel: Not Ominous

The Indonesian Anti-Dumping Committee has just announced the imposition of anti-dumping (AD) duties on color coated steel sheets imported from China and Vietnam at rates ranging from 12% to 28% for five years. Two listed color coated steel exporters, HSG and NKG, are subject to duties of 12% and 19% respectively.

Indonesia had previously levied AD duties of 14% to 37% on cold rolled coils from Vietnam, Korea, China, Japan and Taiwan since March 2013 and continued the safeguard measure after the 2015 sunset review.

External Debt Stock of Middle Income Countries (MICs)

Argentina has asked for a USD 50 billion loan from the IMF while Indonesia and India had to raise their benchmark interest rates. Such strong fluctuations warn of MICs’ vulnerability associated with external debt.  Investors pay more and more attention to whether Vietnam is in a safe zone or not.

MWG: Supporting factors for Bach Hoa Xanh

Bach Hoa Xanh – the food chain that is drawing attention when talking about MWG. Many people have faith in the chain considering that the food retail sector is very fragmented and has a value of over USD 70 Bn. Some, however have a skeptical view as food retailing is a whole lot different from selling electronics. In fact, after nearly two years in operation, Bach Hoa Xanh still has not reached the break-even point, EBITDA loss of VND 60 Bn in Q1. However, the chances of success for Bach Hoa Xanh in particular and modern food retailers in general are still enhanced by the following reasons.

NT2 – Lower contract volume makes earnings more sensitive to gas prices

So far in 2018, for thermal power plants, the ratio of contract volume (Qc) to expected mobilized volume (AGO) decreased from 90% to 85%. As a result, the Qc of NT2 is 4,025 million kWh (-5.5% YoY), implying less protection from volatility in input prices. However, thanks to favorable movements of the EUR/VND exchange rate, we expect that NPAT in 2Q 2018 would improve significantly, leading to a seven percent NPAT growth for the year.

A Busy Week of Meetings mid-June

Investors will be busy next week when there are key meetings around the world. In the US, FOMC members gather to debate about the next step on the normalization of monetary policy, June 12 and 13. The current FED fund rate range is between 1.5% - 1.75%.