DHG - Company Update Report Introduction

Among Vietnamese listed pharmaceutical firms, DHG is the leader in many aspects such as scales, distribution system, and profitability. The company’s continuous effort to improve its management and sale system is another point we highly appreciate. Despite these advantages, DHG is currently trading at a discount P/E compared to other local and regional pharmaceutical companies. Taking into account the historical P/E of DHG, the company's strengths and especially the arrival of the strategic investor Taisho, we recommend investors to ACCUMULATE the stock with a target price of VND119,000 in LONG-TERM, 21% higher than the closing price on 30 November 2016 . At this price, the P/E 2017 is 16x, at which DHG has been traded in the past.

Large Industrial Park Land Bank: VGC’s Long-Term Advantage

Real estate accounts for approximately 47% and 25% of the parent company’s revenue and its consolidated revenue, respectively. The contribution of industrial parks (IPs) was about 70% and tends to increase when the residential land bank decreases. As a state owned company under the Ministry of Construction, VGC has accumulated a large land bank at a low price to develop industrial parks. The total area of VGC (4,032ha) is much larger than its peers, (KBC, ITA, LHG, etc), with 12 IPs in Bac Ninh, Quang Ninh, Phu Tho, Thai Binh, Ha Nam and Hue. Excluding Yen Phong and Tien Son, the other IPs are almost new and have a lower occupancy rate.  As a result, the large ready-for-rent area gives VGC a comparative advantage in attracting new customers.

Vietnam’s Construction Sector: Gear down to go farther

According to the Ministry of Construction, the construction industry value during the first 10 months of 2016 grew 5.1% YoY to VND124,440 billion, at 78.6% of the MoC’s annual guidance. While the construction value grew by 2.1% YoY, the industry’s manufacturing value expanded 9.9% YoY during 10M2016. Although enthusiasm in the housing market has been cooling off, the real estate market has remained the main driving force of the construction sector.

GMD - Result update report introduction

Deeper integration of Vietnam economy is a growth catalyst for seaport and logistics sector. GMD’s competitiveness comes from its large assets base at strategic location and wide client network. Quickening the process of divesting non-core investment would give the firm resources to expand core business. The expected conversion of VIG bond (worth 40 mil USD) in 2017 could save GMD 50 bn VND in annual interest cost but give rise to great dilution risk in short-term

4Q2016 ETFs' reconstitution results

The Db x-trackers FTSE Vietnam ETF and Van Eck Market Vectors Vietnam ETF will announce their reconstitution results on 02/12/2016 and 09/12/2016, respectively. Using data that was updated on 19/08/2016, RongViet Research forecasts the net volume for some of the stocks:

The Rampant USD and its Effects on the Dong

Since the beginning of this month, the USD index has surged by nearly 4% to its highest level since 2003, around 101.7. This index, however, was up only 2% year to date. The rise in the USD has come just before a 25bps Fed tightening in December and a dovish attitude towards monetary policy of many key central banks around the world. According to the CME Group’s FedWatch tool, market expectations for a December rate increase were 93.5%. The stronger US dollar has put pressure on the yen and many other emerging market currencies. As a result, the yen has dropped sharply against the dollar with a depreciation of 8.2% in a month. China’s RMB has weakened to more than RMB6.9 per dollar, a 10% decline since the currency’s first devaluation in August last year.  Furthermore, other ASEAN currencies also came under depreciation pressure as well.

Tan Lien Phat –TTF: A turning of events

Tan Lien Phat Investment Construction JSC (TLP) just announced that it had registered to sell 28.92 million shares of Truong Thanh Furniture Corporation - JSC (HSX –TTF) out of 72.15 million shares it is currently holding. At 49.9%, TLP, a wholly-owned subsidiary of Vingroup (HSX – VIC) is the largest shareholder of TTF at the moment.

VGC: Prospects of the Low-E Glass Segment

This afternoon, our building materials analyst attended a seminar on Asian construction glass. Among all of the topics covered in this seminar, our analyst was most interested in the outstanding characteristics of low-e glass and recalled a pioneer in this segment, Viglacera Corporation (Upcom: VGC).

Steel Production Materials Price Rise: New Price Level in 2017

The price of iron ore has increased by 20% within a week, right after the rise in coking coal prices started to slow down. Iron ore went from $59 per ton to nearly $80 per ton, equivalent to a 35% increase within a month, which is at a current 2-year high.  Iron ore, coking coal and scrap are now 77%, 161% and 45% higher YoY respectively, thus creating a new price level while oversupply continues to be a global problem.

VNM – SCIC’s Roadshow Update and Quick Assessment of 2016-2017 Outlook

On November 21^st, 2016, a roadshow was held to inform investors of the auctioning of 9% of Vinamilk (VNM – HSX) by SCIC.  Below are some brief updates:

HPG – Business Result Update Release

Hoa Phat Group JSC (HPG-HSX) is the leading firm in the domestic construction steel industry, and has been drawing significant market attention since the price has nearly doubled since the beginning of the year. HPG has illustrated its prevailing efficiency among other industry peers during the first 9 months of this year, and has benefitted from the countervailing measures against imported billets and rebar.  While HPG’s remarkable profit margin might not be maintained in 2017 due to the recent input price increase, its production and sales will still remain the strongest in the steel industry.

ACV – A monopoly player in a strong growth industry

Today, the market saw the long-awaited Airports Corporation of Vietnam stocks (ACV traded for the first time on Upcom. At chartered capital of 21,771 bn VND and first day’s closing price of 35,000VND, ACV certainly joins the list of largest market cap stocks traded on unofficial Upcom trading bourse.