The Health of Manufacturing Sector is Still Good

Vietnam’s manufacturing PMI drifted down to 51.7 in July from 52.5 in June. The decline in the headline index was partly driven by slower increases in output and new orders. This is also the case with new export orders, which is in line with our observations in recent import growths (3mma import growth has been stable at 31% in July 2017). 

CTD Result Update – Company Report Release on 31/07/2017

RongViet Research has just released Q2 2017 Result Update Report on Coteccons Construction JSC (CTD-HSX) with the following overview and recommendation:

"CTD is an outstanding construction contractor in the domestic market and the company has proven the power to win the largest bids as well as the internal resources to satisfy clients’ demand in terms of design capacity and progress. Despite the market concerns over the peaking housing sector, we anticipate a sustainable growth in other segments of the real estate market including industrial, commercial and infrastructure, which will manage to keep the construction demand growth. Subsequently, as the leading firm, CTD is able to develop new growth drivers as well as to skim the most profitable jobs in the market. The company is going to adapt to a new revenue structure, which allows them to diversify their portfolio and maintain a decent growth rates over the next three-year period.

DRC - “Bias Segment is Slowing Down While Radial Segment is Improving”

Da Nang Rubber JSC (HSX: DRC) has disclosed its the preliminary Q2 results with revenue of VND864 billion and NPAT of VND35 billion, with respective decrease of 2.7% and 68.5% over the prior year results.

BMI - Quick Updates on H1 2017 Results

BMI recently upload a preliminary report on its H1 2017 earnings. The result is quite in line with FY2017 business plan.

CTD- Gradual Change for a Sustainable Growth

Coteccons Construction JSC (CTD) performed well in Q2 with VND6,183 billion revenue (+24% YoY) and VND412 billion NPAT (+16% YoY). Contracts signed since the beginning of 2017 was nearly VND14,300 billion, boosting the total backlog at the end of Q2 to over VND26,000, 17% higher YoY.

It is evident that CTD is increasingly dependent on the housing market. Contribution from the residential segment accounted for over 70% of CTD’s revenue in H1 2017, while we expect some stagnation in the number of new housing projects in the long term.  Moreover, we also expect the leading firm in the industry to be a pioneer in diversifying its backlogs toward other market segments including commercial and office buildings, industrials and even infrastructure. We notice several signals of CTD reforming their revenue structures, one of which is the industrial segment.

TCM – Q2 2017 Results Update

Although TCM saw a slight decrease in top-line results, its bottom line showed an impressive improvement.

DHG – 1H 2017 Business Result Update

DHG has demonstrated confident in the success of FOL lifting process. As mentioned in our previous AP, the key issue is how the company deals with the drug distribution regulation for foreign enterprises.

1H2017 Trade Preview: Better Growth in East Asia

• Continued spillovers from the FDI sector to the domestic economy
• Trade recovered and moved sideways in the second quarter
• Exports to Asian countries is stronger than exports to the US and the EU
• The increase of investment goods imports showed improvements of investment prospect

QNS – Competition hurts profit

Rong Viet Research would like to give some updates about business activities of Quang Ngai Sugar after a meeting with their representative.

PAC’s Business Result Update: In line with expectation

Dry Cell & Storage Battery JSC (PAC – HSX) announced its business results in Q22017 last week, which are in line with our forecasts in the latest report (28/06/2017). To be specific, PAC achieved an increase of 14.7% YoY in net revenue (~VND 680 billion), while net profit was nearly double the same period last year (~VND 56 billion). In the first half of 2017, the company recorded a 20.8% growth in net revenue and a 53.9% growth in net profit, EPS trailing was 4,277 dong, PE trailing ~11.7x.

CTF - The Enormous Amount Of Capital Required for The Strategic Plans

After the recent meeting with the company’s representatives, RongViet Research would like to give investors some updates on the business activities of City Auto JSC (HSX: CTF).

IMP - When Stock Prices Moves Ahead of the Earnings

A high P/E ratio always requires corresponding earnings growth in the future. In case of DHG, DMC and TRA, we think that paying a high P/E for these stocks at the moment is quite risky. It would take a lot more time to have a proper assessment of their earnings outlook: whether strategic partners can deliver strong growth for DHG and DMC, and whether TRA can start off on the right foot as the company expands to western medicine area. Meanwhile, the earnings prospect of IMP is clearer as EU-GMP factories will start contribute to the total revenue in 2H of this year, and the market will have a bit of information to justify that prospect. Therefore, among top 4 pharmaceutical stocks in listed market, IMP is our favorite.