Feed industry: Expect on the improvement of livestock industry

In 2014, Argricultural Invetsment became a well-known term among corporations. HPG, MSN, MWG, HAG and even VIC altogether announced plan to penetrate into farming and providing agricultural products.  Apart from negative impact from TPP, agriculture industry still demonstrated certain advantages such as (1) falling prices in main commodities for example corn (-15%), soybeans (-28%), rice bran (-6%), (2) favorable policy to encourage agriculture development from policy makers; for example, VAT rate for animal feed is reduced. Specifically, after 3 years of epidemic, positive impact on agriculture industry became “clearer” at the end of2014. Total number of cattle reached 34 millions, increased 2%; among them, poultry and pig herd recorded the fastest growth rate, +3.15% and 1.9% respectively. On the other hand, since 2014, agriculture industry was less impacted by epidemic as it under well control. The above factors positively impact both livestock and feed industry.

BCI – Untying the knots

Our analyst just attended an analyst meeting of Binh Chanh Construction Investment JSC (HSX – BCI) where the Company affirmed optimistic earnings for Q4 and FY2015, supported by the liquidation of smaller projects and the contribution of Phong Phu 4 Residential Area. This years, BCI will focus on clearing the land for its various projects, including Le Minh Xuan IP Expansion, Corona City, Phong Phu 2 RA, etc.

Preliminary quality assessment of listed banks' assets after 3-year restruction

Banking system restruction project, which was launched in early 2012, approached the final phase (2011 – 2015). We will concentrate on assessing quality of assets of listed banks based on Q3/2015 compared to the pre-restruction period of 2011 to evaluate pros and cons of this project.

PLC - Major merging deal in asphalt industry at the end of 2015

Over the last 2 years, Vietnam has improved the infrastructure in transportation. According to the report from World Economic Forum, competitiveness index of transport infrastructure in Vietnam increased by 9 ranks, from rank 76 (2014 – 2015) to 67 (2015 – 2016). The basic construction concentrated in road (lowest rank) and created positive economic effect on related sectors. In particular, asphalt industry significantly benefits from such trend with total sale volume of the whole industry in 2015 reached approximately 933,000 tons (+23% compared to 2014). CAGR for the period 2009-2015 was approximately 14%.

SBV guides market new exchange rate policy

Today, new exchange rate policy began to take effect. According to Decision No. 2730, from Jan 04, 2016, SBV will announce the central rate between Vietnam dong and US dollar (central rate for short) instead of the average interbank exchange rate.

Market: My dear VNIndex

Let’s say markets are similar to human being. “A flow will have ebb” is held true in case of VNIndex and “easy come, easy” is how events take places in stock markets. Therefore, investors’ sentiment changed from time to time. There might be high tim like “670, 700 or 800 must be the destination for this year Index” or there might be low time like “There is no way this is the bottom, I will come back when it is 460”. In general, patient and able to stay with markets until this day is a real success. We, those who are stock traders should and must have a firm will to avoid “Index wave sickness”.

Otran logistics JSC – integrated logistics service is competitive advantage

Lately, RongViet Research analyst had a meeting and site visit at the–about to-IPO Otran logistics JSC (OTG). Being one of Otran group (formerly Vinacommodities) subsidiaries, OTG is an indispensable part of Otran group’s agricultural trading business. Going private since 4Q2014, OTG is providing services such as port stevedoring, warehousing and road trucking with the chartered capital of VND500 billion. Currently, OTG has 02 subsidiaries being Otran Dong Nai (97%) and Northern Otran (90%) plus 02 affiliates including Otran Energy (195)- depot leasing and Thi Vai general port (30%).   

Vietnam economic review 2015: Headwinds and Tailwinds

Vietnam economy has spent a smooth year in 2015. Looking back the whole year, the economic activities have been widened thanks to the improvement of consumption and industrial segment. However, trade balance, exchange rate and interest rate... have been the remaining issues. The main keys of Vietnam economy in 2015 will be discussed below.

The impacts from US’s lifting crude exports on global prices: Do not get too worried!

In 12/2015, US president passed the bill to eliminate the crude export barrier that had existed for nearly 40 years. It opens the unlimited opportunities for crude producers in US to find partners and export crude oil in the future. At this moment, crude price in WTI future contract (US light sweet oil) has surpassed Brent price for the first time since 2010. This pointed out the immediate effect from US decision on global price movements. However, we believe that this could not be an alarming issue for crude prospects in short-term.

CVT - New granite plant could be a big growth driven factor from 2016

The flourish of real estate market and positive construction activities have been positive support elements for business operations of many building material companies. In the first 9 months of 2015, there was about 58% of listed construction building enterprises having better revenue and earnings than the same period last year; this proportion rose to 75% for tile ones. Of which, we realize that CMC JSC (HNX - CVT) has positive earnings growth and relatively good outlook in the upcoming years.

Timber industry under exporting perspective

In 11M2015, Vietnam Customs Statistics recorded USD 6.1 bn (+9.2% y-o-y) by exporting wood and wooden products. Based on the historical data of wood and wooden products, we realized that growth rate of export wood products has been slowed down since 2010 and it shows no sign of heating up. Since there is only a month ahead, it is easy to predict 2015 growth rate of Vietnam wood and wooden products would be around 10%; and would not be back to the “golden period” in 2011-2012. One month left until 2016, the industry growth rate was forecasted to achieve about 10%, and it could be difficult to return to the "Golden Age" between 2010-2011 (~15%) This is contrast to the forecast from earlier this year when TPP had been expected to bring the optimistic prospect for the total exporting value of the industries, which directly benefit from new trade agreement including timber, fishery and textile.

No domestic steel price recovery in 2016

World steel market has been sinking in overcapacity status since 2014 while deteriorating demand has caused raw material and steel prices to fall sharply. Regarding the domestic market, due to limited productive capacity which cannot meet the quality demand and provide competitive price, China steel has the opportunity to be a big fish in a little pond even though demand has improved. At the moment, leading mining companies (Vale, BHP Billiton and Rio Tinto) are in the race to reduce costs. In addition, the effects of restructuring and reducing capacity in China are limited on the global steel price in 2016. Generally, the overcapacity crisis in China is likely to last long with an excess supply of up to 300 million tons per year.