CTI – Strong Long-Term Growth Prospects

Cuong Thuan IDICO JSC (CTI-HSX) continues to benefit from rising infrastructure demand in Dong Nai. During FY2016, the firm’s revenue and NPAT increased by 27%YoY and 66% YoY respectively. The results were driven by strong performance of road toll operations and construction activities. The company’s toll revenue was VND176 billion (74% YoY growth), which was driven by CTI receiving approval to collect toll from Phase 1 of BOT 91 and from its BOT Vo Nguyen Giap project’s toll fee rising by 60% in the beginning of 2016. Construction revenue recorded stable growth of 10%, mainly from the recognition of its own development projects.

REE – Benefits from the Recovery of the Real Estate Market

REE released it Q4 financial report and had very strong performance. Specifically, in the last quarter of 2016, the company recorded VND1,300 billion in revenue (+200% YoY) and VND620 billion NPAT (+240% YoY). For the full FY2016, REE realized total revenue of VND3,659 billion (+38.4% YoY), resulting in NPAT increasing by 30%, equivalent to VND1,171 billion.

Expanding International Routes - The Inevitable Trend

According to RongViet Research’s estimations, domestic air passenger transportation in 2016 was approximately 30 million, of which Vietjet Air (VJC) and Vietnam Airline (HVN) accounted for 13 million and 12.7 million, respectively. Despite these impressive figures, these airlines still need to exploit not only domestic, but also international routes in order to fully utilize their upcoming aircrafts.

HAH - Small Ports Have Been Hit the Hardest

Declining cargo growth and new port supply both led to intense competition for port operators in Hai Phong (Northern Vietnam) in 2016. Small port operators have been hit the hardest by these changes. Consequently, Hai An Stevedoring and Transport JSC (HAH-HSX) saw revenue and earnings after tax fall by 7%YoY and 20%YoY, respectively.

HPG’s 2016 Business Results: Thriving Profitability

Since the company has been continuously improving its recently completed plant in Hai Duong, HPG is capable of producing over 200,000 tons of construction steel products per month. As the company’s well-developed retail network assists its sales volume, HPG has now captured over 22% of the domestic market share for long products, allowing it to overcome VNSteel Group, which has a market share of 21%, and gain the top position.

Regarding steel pipes, several capacity expansions during the year enabled Hoa Phat to sell nearly 500,000 tons in 2016. At the present, HPG’s market share is approximately 26%, while its archrival, Hoa Sen recorded a reduced market share of around 20%.

The US Border Tax Adjustments (BTAs) and its Impact on Vietnam

During the Lunar New Year holiday, the market received negative news from the US, as it is considering border tax adjustments (BTAs) on imported products that will affect global trade.  This will affect a large number of global markets, particularly Vietnam.  In this note, Rong Viet Research would like to share with investors some preliminary comments on this policy and its impact on Vietnam.

MWG – Company Report on 03/02/2017

MWG continues to be the leader in the retail industry for mobile phones and consumer electronics.  However, expansion for Thegioididong could experience a slowdown this year. Consequently, DienmayXanh will be the main growth momentum for MWG for the next 2 years. RongViet Research believes that MWG will face several obstacles to achieve its similar rapid growth of the past, due to the saturation of Vietnam’s market coupled with the emergence of increased competition.

Company report Introduction - Airports Corporation of Vietnam

Airport Corporation of Vietnam (ACV-Upcom) operates 22 commercial airports across Vietnam. The firm’s business growth has been driven by the rise of incomes in Vietnam, increasingly affordable air travel expenses, and Vietnam’s deeper global economic integration. As Vietnam’s economy is still in its emerging state, we expect air traveler volume to continue growing at 15-20% in the coming years. Expansion at major airports (Tan Son Nhat, NoiBai, Da Nang and Phu Quoc) will add 23% passenger capacity between 2016-2018 and relieve the current state of under capacity. Since fixed costs make up the majority of airport operations, ACV’s recent increased service charges proposal would have a positive impact on the firm’s earnings if approved.

Auto Industry: A Look Back at 2016

The volume of automobile sales reached 304,427 units in 2016, increasing by 24% compared to the previous year. Despite its double-digit growth rate, the auto industry witnessed slower growth when compared to 2014 and 2015. Notably, there was a significant slowdown in the last two months of 2016, as automobile sales in 11/2016 and 12/2016 reached 28,431 units (-4% YoY) and 33,295 units (only +13% YoY), respectively. Passenger cars and commercial vehicles sales volume were 182,347 units (+27% YoY) and 106,347 units (+19% YoY), respectively. It should be noted that growth of demand for automobile consumption is currently in a downtrend.

PXS – No Improvements Ahead in 2017

Rong Viet Research had a meeting with the representative of Petroleum Equipment Assembly & Metal Structure JSC (PXS – HSX) this week. During 2016, PXS’s revenue and profit before tax was VND1,550 billion (-11.2% yoy) and VND110 billion (-22.0% yoy) respectively. PXS was only able to achieve ~75% of its plan for the year, and it’s still expected to maintain a 13% cash dividend.

PNJ- Updates On its Business Results

Phu Nhuan Jewelry JSC HSX: PNJ), one of our favorite stocks, has released its preliminary earnings results for FY2016. Its revenue for 2016 was around VND8,720 billion, an increase of 2% over the year before. Retail revenue remained positive, with a growth rate of 29%; same-store sales growth was 8-9% and the contribution of new stores to revenue was ~12%. PNJ’s gross profit margin advanced by 0.63% compared to 2015.  Earnings before tax was around VND608 billion, climbing by 204% YoY. Excluding extraordinary items, PNJ’s EBT was 23% higher over the year 2015.

Vietjet Air - Too Many Planes?

Vietjet Air has delivered remarkable growth since is foundation. Beginning with just a single plane in 2011, the company has now grown to operate 42 aircrafts in 2016, and this number is estimated to reach 78 in 2019. What is more, the airline’s fleet will significantly expand with the arrival of 24 Boeing 737-Max200 planes each year from 2020 to 2023. This raises the question of whether Vietjet can make use of the new aircrafts efficiently.