CDN - Future Hope of the Port Sector in Central Vietnam

Da Nang Port JSC's (CDN – HNX) revenue and NPAT increased by 10.8% and 5.4, respectively in 2016. Thanks to its location in Da Nang Bay with little wind exposure and modern infrastructure, CDN’s annual throughput growth has been consistently high in the past few years, and its average container throughput was nearly 20% during the same period. CDN expects its 2017 throughput to be around 8b tons, including 380b TEUs, about 10% and 20% higher than that of 2016.

PVT – IMPROVEMENTS RETURN

At the end of FY2016, PVT recorded revenue and PAT growth of 17.7% and 12.2%, respectively. However, the company’s 2016 earnings results were driven by the VND90 billion savings from forex losses based on the revaluation of its foreign year-end debt.  The company’s cash flow report showed a clearer picture of the company’s performance, with its core operating cash flow actually recorded slight growth compared to last year. This was driven by the higher demand for crude tankers, which resulted in increased activity at Dung Quat refinery and FSO Dai Hung; the activity ran for the full year, as compared to around only 7 months during 2015.

Oil & Gas – Rekindled Faith for 2017

In the first 2 months of 2017, global crude oil price maintains the side-way movement with the average of USD 55/barrel. Even though the recovery has not been as strong as expectation, it demonstrated the positive signal when the global oil industry reached the stable and balance point after OPEC’s agreement. “Rekindled faith” is the main theme for Vietnam oil & gas industry in 2017 when the recovery of oil price could be the sentimental push for the markets and stock prices. RongViet Research asserted that 2016 would be the trough of the industry. However, there will be gap between the recovery of oil prices and positive prospects for Vietnamese oil & gas companies. Therefore, 2017 could be the turning point in business efficiency for companies, which can begin to witness an improvement in financial results.

VJC – Company Report on 03/06/2017

Operating its first commercial flight on December 2011, VJC has grown rapidly into the second largest airline in Vietnam in a very short time. Successful application of LCC model, efficient use of capital to expand its fleet, and unique marketing strategy have helped the company to achieve what the previous airlines failed to do: stimulating and exploiting the full potential of the domestic market. VJC’s success, thus, has become a fairy tale of the aviation industry.

CTD- Strong and Wise

As a market leader in the domestic construction sector that bears no bank loans, Coteccons has significant opportunities to expand its backlog and revenue, as well as to stabilize its operating efficiency. However, CTD has also been making efforts to diversify its business lines to ease the risks from the peaking real estate market. The recent private placement shows that CTD is observant enough to make full use of the growth in demand, as well as to find feasible alternatives to achieve long-term development.

Where will the USD head to?

Donald Trump had a speech before the Congress for the first time yesterday. In contrast to many previous appearances before the public, Trump scored big time in this speech. The new president assured the Congress that significant progress has been made since November 2016, as the US stock market has increased nearly $3 trillion, GDP grew at 2% in the last quarter and employment data was better than expected.  He also talked about domestic problems in America, and about how globalization has done more harm than good to the business environment.  He also mentioned employment and the huge trade deficit of $800 billion, and suggested his plan to use $1,000 billion in infrastructure to rebuild the country. His government will proceed to build the wall across the southern border, yet his attitude towards immigration has changed, suggesting a proposal to help immigrants. Without a doubt, the USD and the stock market has received a huge boost, while gold and other safe haven assets, the JPY and bonds declined. Gold fell from its 4 months high of $1263 to $1235 and the USD/JPY saw an impressive swing in just a couple of hours, increasing from 112 to 114 (+1.7%).  It is still uncertain whether Trump’s proposals will pass through the Congress, and whether this global economic trend will continue. According to Deutsche Bank, there will be 5 stages of economic sentimental development under the new governance.

Update on Vietnam’s Economy in the First 2 Months of 2017

Macroeconomic developments in the first two months have not been so favorable and this requires wise intervention of the policy makers to promote economic growth. Inflation and the exchange rate remain under control, thus, the interest rate will not change in the short-medium term.

MWG – Growth Story Will Continue to be Told

On 24/02/2017, Mobile World Investment Corporation (MWG – HSX) organized the first analyst meeting of 2017 to announce its 2016 business results along with its current situation and future plans.  Moreover, it has also announced its Q1 2017 results.  The current price still reflects the optimism for the significant growth and the rapid expansion of DienmayXanh.  Furthermore, MWG has also been taking measures to ensure the profitability of Bachhoaxanh and to develop the management system to solve logistics issues.

Cement Industry: Harder and Harder

According to Vietnam National Cement Association (VNCA), domestic consumption reached 59.35 million tons, up 7% compared to 2016. In particular, the volume of Vicem group accounted for the largest proportion (35.9 %) of the total consumption and had the highest growth rate (11%) compared to the remaining two groups (affiliate group and other cement companies). Thanks to the implementation of many infrastructure and new real estate projects, domestic demand expected to remain strong in 2017. In contrast, the export volume decreased by 2% YoY and had no signs of recovery due to (1) fierce competition with Thailand and China and (2) application of cement export tax of 5% and no VAT refund for export making price competition more difficult than before.

PGI – Result Updates

In 2016, the company's gross premium increased by 11.3% YoY for the first time since 2012. Motor vehicle insurance accounted for 44% of its toal gross premium followed by 18% from hull and P&I insurance and 12% from personal health & accident insurance.

NT2: Business Update

We also learned from the proposal that its guidance for 2017 NPAT is VND672 billion, resulting in a cash dividend of 25%.  It is likely that it will be cautious when making its 2017 plan due to its first major maintenance, which it plans to complete during Oct 2017, Although they plan to produce 4.5 billion kWh in 2017 (equivalent to 2016), the plan for profit is 8% lower.

Fertilizer Industry Outlook: Waiting for New Opportunities

Vietnam’s fertilizer industry faced many challenges in 2016, including domestic demand decreasing, northern urea producers stopping operations, lower selling prices, increased competition, and the unfavorable tax policies.  These non-positive factors have been reflected in the business results of some companies in this industry.  In 2017, the price and output of fertilizers recovered, and the addition of NPK projects and new policies are expected to improve the outlook of this industry.