TDC - 2015 Earnings update

Binh Duong Trade and Development JSC (HSX - TDC) announced yesterday the BOD’s resolution on the estimated business results of FY2015 as well as the guidance for F2016. The document stated that TDC will record VND1,582 billion of revenue, -9.3% yoy and 110 billion of profit after tax (PAT) for FY2015. Those numbers were pretty far-fetch at first sight given that TDC posted minus VND59.4 billion of PAT for the nine months to September. As with most companies under the umbrella of Becamex IDC, however, TDC’s Q4 earnings made up almost the entire amount of annual earnings. For 2016, the firm targets 2.369 billion of revenue, +49% yoy but the PAT guidance is roughly unchanged from 2015’s estimate. Dividends are said to be 10% of share capital or greater for both financial years.

CVT - 2015 Earnings update

Thanks to optimistic recovery of real estate and construction activities, earnings results of many companies in building material sector are expected to have a growth in 2015. In our Advisory Diary dated December 25, 2015, we mentioned some prospects of CMC JSC (HNX – CVT), an enterprise benefiting from the rebound of construction material’s demand.

INFOGRAPHIC: 2015 REAL ESTATE MARKET

 2015 was a much celebrated year for Vietnam's real estate market as it marked the infliction point where the market first recovered after a 5-year crisis. Thanks to a low interest rate environment, banks' accommodative stance towards mortgage lending on top of the government's many supports, transactions boomed in almost all segments of the housing market. Having learnt a lot from the hard time, real estate developers offered a better diversity of housing products where end-users now have a equal footing with that of real estate investors and speculators. As the results, liquidity have been steady on the rise despite the fast-growing number of new launches.

SKG - 2015 Earnings update

In 2015, the number of tourists visiting Phu Quoc grew by 58.1% (yoy), reaching 1.66 million, with domestic tourists accounting for  nearly 90% of the total volume.  A remarkable growth of Phu Quoc tourism was in compliance with the development of economic activity as well as positive business performances in this island. In particular,  Superdong Kien Giang high speedboat JSC (SKG-HSX) is a representative example, in which 2015 earnings result  recorded optimistic growth thanks to the rapid development of Phu Quoc Island as well as a strong decline in oil price.

PXI – Uncertain business prospects

Recently, Rongviet Research analyst had a meeting and company tour to Petroleum Industrial & Civil Construction JSC (PXI – HSX).

PXI is one of three subsidiaries of Petro Vietnam Construction JSC (PVX – HNX) that have been listed on Vietnam stock exchanges. In contrast to mechanical engineering companies (PXS and PXT), PXT focuses more on civil construction, infrastructure and real estate investment along with building and urban businesses. However, PXI’s prospects have been uncertain due to the dependence of core business on industrial projects and investment efficiency taking a long time to make the impact on business results. In addition, with the quite real estate market in Vung Tau, PXI’s projects could not be notable aspects for company development at this moment.

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%).