KDH – Handover of the Privia project is a bright spot for 2H2024 revenues : KDH : Real Estate : Giao Nguyen Tags:
Accumulated in 6M2024, the parent company's total revenue and profit after profit recorded VND 978.5 billion (-2.8% YoY) and VND 341.8 billion (-23.6% YoY), respectively, thanks to the handover of low-rise products of the Classia project, completing 25% of the revenue target and 43% of the profit plan for the whole year. KDH's inventory continued to grow for the 5th consecutive quarter, reaching VND 21.5 trillion (+65.7% YoY, +5% QoQ in Q22024). During the period, the company mainly invested in the BT – Binh Trung Dong project . For the whole year of 2024, we estimate total revenue and NPAT-MI to reach VND 4,704 billion (+125% YoY) and VND 981 billion (+37% YoY), respectively, with a focus on the handover of The Privia project (Binh Tan). EPS in 2024 is expected to reach VND 1,137. Using the SOTP (Sum-of-the-parts) method, we set a target price of VND 42,000/share after adding the value of the Loc Minh project to the inventory. The total expected return is 13% compared to the closing price on August 16, 2024), which is equivalent to a ACCUMULATE recommendation for long-term investment purposes.
Update on trade growth in July 2024 : VDS : Macroeconomics : My Tran Tags:
Trade continues to be robust in July 2024. Export growth is more comprehensive across many products. The proportion of imported goods from China continues to increase in 7M2024. US retailers' need to stock up on goods is driving growth.
PHR - The approved master plan serves as the foundation for the land conversion story to be realized : PHR : Industrial Land RE : Hung Le Tags:
PHR's net sales reached VND 272 billion (USD 11 million), an increase of 146% over the same period last year. However, the parent company's NPAT decreased by 45% YoY due to the absence of income from rubber tree liquidation as in the previous year. In the second half of the year, PHR expects to achieve sales of VND 992 billion (USD 41 million; +8% YoY), with NPAT reaching VND 426 billion (USD17 million; +56% YoY). Factors contributing to the growth in 2H compared to the same period last year include (1) rubber prices remain high compared to last year, (2) the NTC 3 project business will contribute significantly to profit/loss from joint ventures and associates, (3) compensation income from VSIP III is expected to surge as the project completes land handover to customers, (4) rubber tree liquidation activities will be recorded in 2H2024. For the full year 2024, PHR's total revenue is estimated at VND 1,587 billion (USD 65 million; +17.4% YoY), with NPAT at VND 564 billion (USD 23 million; -9% YoY). The corresponding EPS is VND 4,161. The master plan for Binh Duong Province for the period 2021-2030, with a vision to 2050, outlines the development of industrial parks, industrial clusters, and waste treatment facilities, including the conversion of 4,575 hectares of rubber land owned by PHR. By 2030, we maintain our expectation that the Tân Lập 1 Industrial Park project (51% owned by PHR), Lai Hung Industrial Park (600 hectares), and Tan Long Solid Waste Treatment Facility (400 hectares) will be the next projects eligible for investment approval. As a result, PHR may receive compensation when these projects are reclaimed for development Based on the sum of the parts (SOTP) method, the target price is maintained at VND71,000/share due to. Combined with the expected dividend over the next 12 months of VND3,000/share, the total expected return is 33% (based on the closing price on August 13, 2024).
ACV - Q2-FY24 results stayed positive due to growth in international pax, exchange rates, and bad debt control : ACV : Aviation : Quan Cao Tags: Aviation ACV
In Q2-FY24, net revenue and net profit (excluding take-off/landing activities) were VND 5.5 trillion (+12% YoY) and VND 2.9 trillion (+26% YoY), respectively. The number of international passenger reached 9.8 mn x (+31% YoY) and 17.2 mn domestic passenger (-21% YoY). The shift in the international/domestic passenger ratio to 36%/64% from 26%/74% in the same period last year drove ACV's growth. ACV's financial operations recorded VND 287 billion in deposit interest and VND 435 billion in net foreign exchange gain due to the JPY/VND exchange rate depreciating by about 4% compared to the previous quarter. During the period, ACV reversed VND 21 billion for Pacific Airline and VND 211 billion for Vietjet. Thus, ACV has fully reversed the provision for receivables from Vietjet. Airlines such as Bamboo Airways, Vietravel, and Air Mekong maintained a 100% provision rate, with immediate provisions for receivables from these airlines. For the 6 months of 2024, cumulative revenue and pre-tax profit (excluding take-off/landing activities) were VND 11.1 trillion (+16% YoY) and VND 5.5 trillion (+53% YoY), respectively, completing 56% and 86% of the annual plan. We are currently revising the forecast for 2024 and valuation, which will be updated in the next report.
HDG – Anticipating Recovery in the Second Half of 2024 : HDG : Real Estate, Utilities : Thach Lam Do, CFA Tags: HDG
For 2024, we maintain our expectation that the energy segment will see a slight recovery, particularly from Q3/2024, with the probability of La Niña increasing significantly during August-September. Along with the company's reduction in SG&A expenses and interest costs, we estimate that the NPAT–MI for H2/2024 and the entire year will be VND 405 billion (+24% YoY, +37% HoH) and VND 700 billion (+5% YoY, equivalent to 90% of the company's business plan) In a recent meeting with HDG, the company shared updates on its current projects. Renewable energy projects are awaiting regulatory guidance on pricing negotiation mechanisms to officially launch. Regarding residential real estate projects, the company plans to proceed with sales of the Charm Villa project – Phase 03 by the end of 2024, but will assess market absorption levels to develop a suitable sales strategy. Using the Sum-of-the-Parts (SoTP) valuation method, we maintain a target price of VND 28,300 per share (total expected return of +6% compared to the closing price on August 12, 2024, including a cash dividend of VND 500 per share), corresponding to an ACCUMULATE recommendation for HDG shares. We expect HDG's real estate and energy projects to potentially restart in 2025, with regulatory guidance on the pricing negotiation mechanism serving as a basis for determining the value of the company's pending renewable energy projects.
Major players in Essential Consumer Goods – Entering the Second Half of 2024 with many Advantages : VNM, MCH : Consumer Services : Hung Nguyen Tags:
In H1-2024, the value of essential consumer goods across most key segments (dairy, food, beverages) declined YoY, indicating continued weak purchasing power. Consequently, YoY growth for major players like VNM and MCH has relied heavily on their ability to expand market share domestically and tap deeper into international markets. In H2-2024, we believe these giants are well-positioned to sustain their prior YoY growth, driven by the broader economic recovery in consumer spending and the increased market share they secured in H1-2024.
FMC – The significant increase In JPY/VND exchange rate supports strong growth In 2H2024 : FMC : Fishery : Hien Le Tags:
Q2-2024: Revenue reached VND 1,243 billion (or USD 49.7 mn) (+20% YoY) as a 21% increase in shrimp sales, with a 22% YoY rise in volume, while the average shrimp selling price in VND decreased by 1% YoY. Gross margin improved significantly, exceeding our projections, with a + 4.7 pps YoY due to a substantial rise in self-sufficiency, as self-farmed shrimp output increased with the harvest from 200 hectares of newly developed farming areas (bringing the total farming area to 525 hectares) in Q1/2024. However, the absence of anti-dumping duty refunds and the recognition of provisions for countervailing duties led to higher selling expenses. Consequently, NPAT-MI slightly decreased by 7% YoY, reaching VND 66 billion (or USD 2.64 mn) . For the second half of 2024, we anticipate strong revenue growth driven by a 12% YoY increase in shrimp volume and a gradual recovery in selling prices, supported by the rising JPY/VND exchange rate. As a result, we revise our full-year 2024 revenue forecast upward to VND 6,435 billion (or USD 257mn) (+26% YoY) and increase the gross margin from 10.1% to 11% due to higher selling prices in VND. Consequently, we project NPAT-MI to rise to VND 342 billion (or USD 13.6mn) (+24% YoY). Adjusted 2024 EPS, after welfare fund adjustments, is expected to reach VND 5,185 (+22.84% YoY). We increase our 12-month target price by 6% from VND 52,600 per share to VND 55,800 per share , representing a 2024 forward P/E of 10.8x and a potential return of 18% compared to the closing price on August 8, 2024. We recommend ACCUMULATE for this stock.
REE – Earnings bottoming out from Q2 2024 : REE : Utilities : Thang Hoang Tags:
REE announced weak Q2/2024 financial results with revenue flat at VND 2,183bn (USD 87mn) and NPAT-MI of VND 450bn (USD 18mn; -8% YoY). The underperformance of the energy segment, which contributes 40% of revenue and 80% of NPAT, outweighed strong performance of other segments such as mechanical and electrical (M&E) and real estate. We believe REE’s earnings have already hit bottom in Q2/2024 and that would recover in Q3 and Q4 due to (1) a greater contribution from the real estate segment and (2) the company's hydroelectricity cycle, which peaks in Q3 and especially in Q4. We forecast full-year 2024F revenue of VND 8,509bn (USD 338mn; -1% YoY) and NPAT-MI of 2,021bn (USD 80mn; -8% YoY). Looking foward to 2025, we anticipate REE’s business to gradually recover, driven by (1) a recovery in hydroelectricity production due to the La Niña cycle and (2) a higher occupancy rate at the Etown 6 building. Using the sum-of-the-parts (SoTP) valuation method, we derive 12-month target price for REE at VND 71,300 per share, equivalent to a forward P/E of 16.5x and an expected return of 8% based on the closing price as of August 6, 2024.
US: The softness in the labor market casts doubts on the possibility of an economic recession : VDS : Macroeconomics : Luan Pham Tags: VDS
The job market in the US is showing clear signs of slowing down. Concerns about an economic recession are growing, but still too soon to conclude that the US is slipping into a recession. The market is predicting the Fed to cut interest rates by 125 basis points in 2024.
VIB – Profit Growth Potential in 2H-2024 Looks Promising with Reduction in Provisioning Pressure : VIB : Banking : Tung Do Tags:
Q2-2024 Pre-Tax Profit decreased by 29% YoY, weaker than previously anticipated (-17% YoY) due to slower-than-expected income from bad debt recoveries, while operating and provisioning expenses slightly exceeded forecasts. Credit growth reached 4.6%, lower than the industry average of 6%, with the growth rate in personal loans remaining slow (+1.2% YTD), while corporate lending was emphasized more, achieving a growth of 22% YTD. We have revised down our 2024 projections for Total Operating Income and PBT by 1% and 2%, respectively, to VND 22.4 trillion (+1% YoY) and VND 11.5 trillion (+7% YoY) after adjusting the NIM down 10 bps to 4.1% and the credit cost ratio down 20 bps to 1.3%. With PBT growth implied at 36% YoY in 2H-2024, we maintain a BUY recommendation for VIB with a target price of VND 23,800 per share, adjusted down by 5% from the previous target price. The total expected return (including a 10% cash dividend) is 23%. This target price implies a 2024F/2025F P/B valuation of 1.6x/1.4x.
BSR – Back to the runway after major maintenance : BSR : Oil & Gas : Ngan Le, ACCA Tags:
Due to the production halt for plant maintenance (March 15 – May 1), 2Q24 sales volume decreased by 29% YoY, leading to a 27% YoY decrease in revenue. Additionally, the crack spread remained low, and the incurred maintenance costs further contributed to the LNG margin decreasing to 2% (2Q23: 3%). NPAT-MI dropped by 43% YoY, to VND 768 bn. Revenue and NPAT-MI were recorded at VND 55,118 bn (-19% YoY) and VND 1,912 bn (-36% YoY) respectively, at 44%/46% of our projections. Although business results were impacted by periodic maintenance, a highlight in 2Q24 was the the Quang Ngai People's Court’s approval of bankruptcy proceedings for the subsidiary BSR BF, which facilitated the transfer of BSR's stock listing from UPCoM to HoSE.
Seaport industry – Positive outlook maintained for the second half : GMD, VSC, HAH : Seaports : Quan Cao Tags: Seaports Shipping
Accumulated 1H2024, the estimated value of container via sea ex-im of goods were USD 103 bn (+10% YoY) and USD 68 bn (+8% YoY), respectively. Accumulated 1H2024, the container throughput in Hai Phong and Vung Tau regions were 3.5 mn TEUs (+20% YoY) and 3 mn TEUs (+37% YoY), respectively. The demand for trade flow is forecasted to continue its growth trend as manufacturing enterprises receive many new orders for the peak season in the second half of 2024.
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