Consumer and Real Estate Loans Reach New Peak

According to GSO, credit growth was 9.58% as of July 2017 compared to end-2016, lower compared to that of the same period in 2016 (~9.64%). However, the updated data from National Financial Supervisory Commission showed that credit growth reached 12.9% compared to end-2016, which was higher than that of the same period last year. So although credit growth steadied in Q3, it was still higher than last year. Based on RongViet Research’s estimate, credit declined 16.1%QoQ but increased 33.8%YoY in Q3. Compared to the government’s target of 21% credit growth, credit should increase 45.1%YoY in the final quarter, twice the amount of credit in Q3. Notably, credit growth in non-manufacturing sectors has slowed down since early 2017, it has increased slightly as of July 2017 (+3.2% compared to end-2016), the lowest level in many years. On the other hand, credit growth in the manufacturing and construction was 22.1%YTD, in which credit in construction was up 26.2%YTD.

CTI – A solution for interest of relevant parties

Recently, BOT Bien Hoa city Alternative road project, invested by Cuong Thuan IDICO JSC (HSX:CTI),  is receiving heavy opposition from drivers. Similar to the case of BOT Cai Lay, Ministry of Transportation and CTI quickly come up with a solution to reduce 20% toll fee for all classes of vehicles from 1 November 2017. However, the issue of tollbooth location is not yet mentioned. Despite that, the suggested solution seems to be the most appropriate after evaluating interest of drivers - investors - bank - Ministry of Transportation.

Not Easy to Beat "Mr Market"

We use median monthly return for the period 2012 – 2017 of the VNIndex and realize that seeking for profit in the first half of the year, especially the first five months will be more easy.

Multiple Impacts From Temporary Halt of Competitive Generation Market

The Ministry of Industry and Trade has sent Decision 3698/QD-BCT to all power plants on the competitive generation market (CGM), indicating suspension of CGM in Q4 2017. This reason for the announcement is to prioritize electricity mobilization from gas-fired thermal power plants. Below are our updates and views on the impact of this decision.

LPB - New Listed Bank

We appreciate LPB as the bank's distinct business model and improving performance. 9M2017 PBT is estimated at VND1,450bn (+ 68% YoY), fulfilling 97% of its business target for 2017, respectively. Given the prospects for continued high credit growth in 2018, LPB is likely to remain high growth in 2018. At the closing price of VND14,200 per share, LPB is trading at PBR of 1.04x, lower than the average of ~1.5x of listed banks. However, the dilution risk is a matter for investors to consider as the bank has planned to raise capital including (1) charter capital will increase from VND6,460B to VND7,500B, via ESOP and issuance for existing shareholders; (2) VND2,000B convertible bonds to be issued at the end of 2017 and can be convertible at the end of 2018 or early 2019; and (3) issue 25% of capital to foreign strategic shareholders. In the plans to increase capital, issuing to foreign strategic partners may take more time.

Real Estate Update in District 2, Ho Chi Minh City

Real Estate Update in District 2, Ho Chi Minh City

CHP – To Maintain Growth Momentum in Q3 2017

In Q3 2017, while the amount of rainfall in the Central region was expected to be 15% - 25% above multiyear average level, the actual situation in the area of Thua Thien Hue province, where A Luoi hydropower plant is located, was surprising. In July, the amount of rainfall was over 300% above multiyear average level whilst in September, though the official statistics are yet to be announced, Doksuri Tropical Storm made landfall on Central and brought heavy rains to the region. As a result, the estimated total electricity output of CHP in Q3 2017 rose by 54% YoY to 203 million kWh.

DPM - Company Report Released on 29 September 2017

Considering the highly competitive environment in the urea fertilizer industry, we do not expect strong growth in DPM’s urea operation until the end of 2018. However, the picture may become more promising from 2019, considering that Dam Ca Mau (HSX:DCM), who is the main rival of DPM, will no longer enjoy the natural gas price subsidies; there is high possibility that DPM will benefit from VAT refund, and the NH3-NPK project  will start to generate profit. We forecast that DPM will report 9% sales growth and 60% PAT growth for 2019.

Comments on GDP Growth in the Frist Three Quarters of 2017

According to GSO, the economy grew a bit faster than previously estimated in the second quarter, up 6.28% vs 6.21% expected growth. Meanwhile, GDP growth continued to robustly rise in Q3, recording its quickest pace in more than six years, up 7.46% QoQ. In the first three quarters of 2017, GDP growth expanded 6.41%, which is higher than our expectation for the whole year. A breakdown of data showed that manufacturing contributed to more than one-third of overall growth (Figure 2), but it should be noted that things happened better than expected, thanks to the FDI sector. To be specific, the expansion of Samsung in Vietnam pushed output of electronic products to grow sharply this year, especially television products output which increased by 31.6% YoY in nine months of 2017. In addition, as the Formosa plant ran into operation, steel output soared to more than 13.3 million tonnes (+21.2% YoY).

ACV – Comments on the audited H1 2017 financial report

ACV has just announced the audited H1 2017 consolidated revenue of VND6918 billion and after tax profit of VND1711 billion. The result saw audited H1 2017 after tax profit decline VND382 billion compared to previously announced figure. We found that the difference was attributed to these factors: