FRT – Ambition to build a comprehensive healthcare ecosystem in the long-term
08-05-2024
: FRT
: Retailing
: Hung Nguyen
Tags: FRT
- In Q1-2024, FRT's net revenue and NPAT-MI recorded VND 9,042 bn (or USD 377 mn, +4.0% QoQ, +16.6% YoY), and VND 39 bn (net loss of Q1-2023: VND -5 bn), respectively. It is due to the better-than-expected performance of Long Chau while FPT shop narrowed its net loss based on the improvement of gross margin, reached 13.4% (+393 bps YoY, +198 bps QoQ).
- We believe that Vietnamese preventive healthcare (immunization) is the compelling land for Long Chau in the middle-term. Given Long Chau’s aggressive strategies against other modern pharmacy chains and the fragmented characteristics of vaccine market with the shortage in public vaccine station counts, we suppose that this chain will inch up its market share over the next 5 years. In 2024, we project its’ net revenue and NPAT to be VND 847 bn and VND -78 bn, respectively.
- Based on the Sum of the Parts (SoTP) valuation method, we have revised our target price for FRT to VND 174,500 per share, up from VND 139,500 per share, on the pillars of (1) adding Long Chau vaccine factor in our forecast, and (2) revising up Long Chau’s target FY24 P/S from 0.85x to 1.0x regarding its faster-than-expected revenue expansion by Long Chau vaccine centers. Hence, we have ACCUMLATE recommendation for FRT stock with the expected return for the next 12 months of 7.4% compared to the closing price of VND 162,500/share on May 8th, 2024.
Yellow Phosphorus segment – Ready to take off thanks to the growth of EV industry
07-05-2024
: DGC, CSV
: Chemicals
: Ngan Le
Tags:
- Yellow phosphorus (P4) plays an important role in the production of semiconductor and LFP battery. LFP is currently the most popular EV battery thanks to lower production costs than traditional ion batteries and high safety. The global LFP battery market share is forecasted to increase from 30% in 2023 to 48% in 2024, leading Vietnam's P4 export volume to increase by 3.3% YoY.
- Vietnam is the world's largest exporter of yellow phosphorus, however, due to technological limitations, most of P4 producers in Vietnam only export raw products rather than participating deeply in the industry's value chain.
HDG – Supporting factors from policy movements
06-05-2024
: HDG
: Real Estate, Utilities
: Thach Lam Do, CFA
Tags: HDG
- For 2024, we expect the mild recovery in key businesses, especially from 3Q24, with the probability of El Nino will decrease and being replaced by a Neutral/La Nina phase, supporting hydropower plants’s output. As a result, we estimate HDG's total revenue to reach VND 2,800bn (USD 114mn, -3%YoY) and the gross profit of VND 1,806bn (USD 73.7mn, +5%YoY), also with 2024 NPAT-MI of VND 786bn (+10%YoY, USD 32mn, equivalent to 2024 bussiness plan). The 2024 equivalent EPS is VND 2,570.
- We are aware that HDG’s projects have legal issues, with: 1/ Real estate projects in the HCMC depend on the program of implementing commercial housing projects by obtaining land use rights with other land (the land origin in the project is mostly non-residential land), 2/ Transitional renewable energy projects are waiting for a new pricing framework to have an accurate estimation of the project's profitability. With the expectation that the Government will step up to resolve these issues in 2024, we expect HDG projects to be able to restart in 2025 - the basis for determining their value in the valuation model.
- HDG is the notable company for the long-term portfolio, with: 1/ Power plant portfolio and high potential land fund, 2/ Legal completion (for real estate projects) or new pricing framework (for transitional renewable energy projects) are supporting factors for the business revaluation in the period 2024-2025. Using the SoTP (Sum-of-the-parts) method, we maintain the target price of VND30,900/share (Upside +16%, including cash dividend of VND500/share), equivalent to an ACCUMULATE recommendation for Hado Group Jsc.
ACV - Q1-2024 Core Profit Doubled on Robust International Passengers Growth and Reduced Provisioning Expenses
03-05-2024
: ACV
: Aviation
: Tung Do
Tags: Q1-2024 Update Aviation
- Despite flat total passenger traffic compared to the same period, ACV's aviation service revenue recorded a 20% YoY growth due to the strong international passenger volume growth (+48% YoY), resulting in a 19% YoY growth in consolidated revenue.
- ACV recorded a profit of VND 100 billion from the exchange rate gain due to the slight depreciation of JPY during the period, while in the same period of 2023, the exchange rate loss was VND 770 billion.
- Due to ACV having fully provisioned bad debts from Bamboo Airways, Pacific Airlines, and Vietravel Airlines in the previous quarter, the provision expenses for doubtful receivables significantly decreased in this quarter to VND 175 billion (-85% QoQ and -35% YoY).
- Consolidated NPAT increased by 79% YoY, reaching VND 2.9 trillion. Excluding profit from bay management, ACV's NPAT doubled to VND 2.6 trillion.
- With Q1-2024 financial results exceeding expectations, the current target price is VND 96,200 and the 2024F forecast are under review.
HAH - Profit continues to decline, but tends to stabilize in Q1-FY24
02-05-2024
: HAH
: Seaports
: Quan Cao
Tags: Seaports HAH
- In Q1-FY24, net revenue and NPATMI reached VND 704 billion (+7% YoY) and VND 60 billion (-50% YoY) respectively, completion 21%/20% of the annual plan and 23%/20% of our forecast for 2024.
- In Q2 and Q3-FY24, HAH is expected to receive three new vessels with a capacity of 1,700 TEU each, including one vessel participating under the BCC contract operated by An Bien Shipping Lines Corporation. Thus, HAH's fleet will be increased to 15 vessels with a total capacity of 21,000 TEU by the end of 2024.
- For 2024, forecast revenue and NPATMI are expected to reach VND 3,146 billion (+20% YoY) and VND 294 billion (-24% YoY), respectively, corresponding to an EPS of 900 VND.
- Using the multiple method, the target P/B and EV/EBITDA are 1.7x and 6.4x, respectively. We recommend ACCUMULATE with a target price of 43,500 VND per share.
FMC - Q1-2024 profit is the highest profitable Q1 over the years
26-04-2024
: FMC
: Fishery
: Hien Le
Tags:
- Q1-2024: revenue reached VND 1,461 bn (or USD 58 mn) (+45% YoY) as a 49.5% increase in shrimp revenue with production up 26% YoY and shrimp selling price in VND increase 18.6% YoY. However, the raw shrimp prices increase in Q4-2023 make the gross margin decreased by 1.4 percentage points YoY. As a result, PAT only increased by 18% YoY, reaching VND 57.2 bn (or USD 2 mn).
- Q2-2024: we estimate revenue to reach VND 1,214 bn (or USD 48 mn) (+18% YoY) as a 10% YoY increase in shrimp export volume and a selling price in VND equivalent to Q1-2024 (+7% YoY). PAT is estimated to reach VND 88 bn (or USD 3.5 mn) (+16% YoY) as selling expenses increase.
- In 2024, we have raised our revenue forecast to VND 5,917 bn (or USD 236 mn) (+16% YoY), assuming shrimp export volume will increase by 10.8% YoY and the selling price in VND will increase by 5.5% YoY, while gross profit margin decreases from 11% to 10.1% as an expected 20% increase in self-cultivated shrimp production instead of 29% YoY. As a result, NPAT-MI is projected to decrease to VND 318 bn (or USD 12.7 mn) (+15% YoY). EPS for 2024 is estimated at 4,857 VND (+15% YoY).
- We slightly reduced the target price from VND 52,600 per share to VND 52,300 per share due to the adjusted decrease in gross margin for 2024. Combined with the expected cash dividend of VND 2,000, the expected profit for the next 12 months is 12% compared to the closing price of VND 48,550 per share on April 26, 2024. We recommend ACCUMULATE this stock.
Update on monetary market in April 2024
25-04-2024
: VDS
: Macroeconomics
: My Tran
Tags: VDS
- The SBV intervenes to manage exchange rate expectations.
- Banking system liquidity shows signs of mild stress in April 2024.
- Credit improves, but the recovery path is challenging
IMP - Trading off profit to boost sales volume
24-04-2024
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: Pharmaceuticals IMP
- In Q1-FY24, net revenue and NPAT reached VND 491 billion (+2% YoY) and VND 78 billion (-8% YoY) respectively, competion 21%/12% of our annual plan and 23%/21% of our forecast for 2024.
- After three consecutive quarters of high discount rates (about 10% of revenue), we adjust the discount rate upward upon observing changes in IMP's sales policy. Consequently, we revise revenue down by 3% from the previous forecast. Forecast net revenue reaches VND 2,166 billion (+9% YoY).
- Adjusting gross profit margin downward from 42% to 40%. NPAT to reach VND 296 billion (flat compared to the same period) and decrease by 19% compared to the previous forecast.
- The target price for IMP at 67,700 VND per share, combined with a dividend of 1,000 VND per share for a total return of 7%. We maintain an ACCUMULATE recommendation.
VNM – Stock market prices has decreased to attractive levels
23-04-2024
: VNM
: Food, Beverage & Tobacco
: An Nguyen
Tags: VNM Market prices AGM
- Vinamilk set 2024 business targets with revenue and net profit of VND 63,163 bn (or USD 2,527 mn) and VND 9,376 bn (USD 375 mn), respectively. We interpret that this is a conservative plan, in the pillars of (1) successful outcomes of VNM's strategic initiative; (2) advantage of below-year ago raw milk powder costs; and (3) VNM’s history of high completion rate for its annual business targets.
- 2024 Net sales and NPAT-MI is predicted to be VND 63,065 bn (or USD 2,523 mn; +4.5% YoY) and VND 9,462 bn (or USD 378 mn; +6.6% YoY), respectively. The equivalent EPS is VND4,075. Sales will be driven by the growth in both domestic and oversea markets. NPAT-MI to increase at a higher pace than the revenue, supported by decreased input costs.
- We combined FCFF valuation model (50%) and multiples comparison (50%) with an applied 2024 P/E of 18.0x, producing the target price of VND81,500. Adding an expected cash dividend of VND3,850, the 12-month expected return is 33% compared to the closing price on Apr 22nd 2024, equivalent to BUY recommendation.
MBB - Credit cost maintained at high level
22-04-2024
: MBB
: Banking
: Chinh Dang
Tags:
- In Q1/2024, credit growth reached 0.39% YTD, with customer loans up 0.7% YTD and corporate bond decreasing 4.4% YTD. Cost of funding (annualized) and asset yield (annualized) continued to decelerate in Q1, decreasing by 54 bps and 72 bps respectively, leading to NIM (annualized) dropping 26 bps compared to Q4/2023 to 4.04%. Consequently, net interest income declined by 11% YoY.
- Non-interest income sources grew 73.5%, offsetting the decline in interest income, resulting in total operating income reaching VND 12 trillion (USD 489.80 mn) in Q1/2024, almost flat compared to the same period. On the cost side, provision expenses increased by 46.4% yoy, while operating expenses decreased slightly by 1.5% yoy, resulting in a PBT of VND 5.8 trillion (USD 236.73 mn) (-11% yoy), achieving 20% of the 2024 profit plan.
- Despite robust growth in non-interest income during the first quarter, the performance of NIM and credit cost is trending less favorably than our expectations. Therefore, we are in the process of reviewing our forecasts and valuation for 2024. Our latest forecast for PBT in 2024 stands at VND 30.3 trillion (USD 1.24 billion) (+15% yoy); with the corresponding target price (TP) at VND 28,200 per share.
2024 Vietnam Automobile Outlook – Gradual recovery after the historic lows last year
19-04-2024
: HAX
: Automobiles
: Hung Nguyen
Tags:
- According to VAMA, in 3M-2024, Vietnam’s car sales volume decreased by -21.5% YoY. We suppose automobile consumption will be subdued in the following quarters before gradually increasing from mid-2024 owing to the expected recovery phase in both global and local economy. We anticipate two-digit sales growth from last year’s historic low. We also expect that the decreasing of borrowing interest rate will stimulate the large capital-intensive consumption such as cars.
- We suppose that the reduction in SG&A exp/net sales in the demand recovery environment, combining with the easing of borrowing interest rate, the operating margin of automobile dealers will have the flexible room to improve, supporting its earnings to reach triple-digit growth.
- Regarding the rising trend of electric vehicle deployment globally, as per the Vietnam’s Ministry of Transport, the total number of certified Electric and Hybrid cars in Vietnam reached 28,000 and 3,557 units, respectively, in 2023, a significant increase from only 167 units in 2021. Nonetheless, we believe it is premature to anticipate electric vehicles emerging as a pivotal catalyst for automobile stocks (such as HAX, CTF) as Vietnam's infrastructure is insufficient in terms of charging capacity and number of charging stations
The US economy outperformed, and sticky inflation signals a higher for longer rate
17-04-2024
: VDS
: Macroeconomics
: Luân Phạm
Tags:
- US CPI inflation stayed hotter than forecast again.
- Resilient consumption bolsters U.S. labor market amidst high-interest rates.
- No rate cuts in 2024 at all?
08-05-2024
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