HDG – Hado Charm Villas project is main driver in 2022

• In 2021, HDG recorded revenue and NPAT-MI of VND 3,841 Bn (-23% YoY) and VND 1,090 Bn (+11% YoY), respectively. The gross profit margin strongly improved thanks to the handover of 82 units at Hado Charm Villas, remaining units of Hado Centrosa along with resilient Energy segment.
• In Q1 2022, HDG would focus on finishing the rough construction of villas and preparing for third phase sale in Hado Charm Villas (currently the construction rate reached 70%). Regarding to Energy segment, the power segment is stable when power output in January reached 132 million KwH thanks to the favorable weather per management.
• In 2022F, we expect that the handover of Hado Charm Villas 150 units to uplift the overall business results. Our current 2022F revenue and NPAT forecast for HDG are VND 4,271 billion and VND 1,552 billion, respectively. Current forecasts and TP of VND 69,300 are under review.

BMP – The recovery signs are clearer

• The demand has recovered strongly after easing social distancing. BMP’s selling volume increased from roughly 10,500 tons in 3Q/2021 to reach 25,920 tons in 4Q2021.
• The company raised the average selling price by roughly 11% QoQ to VND 55.9 million per ton of product, boosting the gross margin to 20% in 4Q/2021 from only 4% in 3Q/2021.
• PVC resin prices are fluctuating at a range of 1,400-1,450 USD/ton, after reaching a peak of USD 1,950/ton in October/2021. Although the recent oil price rally can lift PVC resin prices, we think BMP’s profitability will be good due to higher selling prices and lower material prices.
• We forecast that BMP’s NPAT can reach VND 405 billion in 2022, increasing by 89% YoY. Based on the 2022 EPS forecast of roughly VND 4,500, the forward P/E ratio is 13.5x. We recommend investors ACCUMULATE this stock with a target price of roughly VND 68,700/share. Together with a cash dividend in the next 12 months of VND 4,000/share, the total expected return is 17% as of the closing price of VND 62,200 on March 03rd, 2022.

NT2 – Oil price surge is a short-term downside risk

• In 4Q2021, revenue grew by 23% YoY to VND 1.635 bn (or USD 71 mn) while NPAT experienced an adverse trend, declining by 40% YoY to VND 121 bn (or USD 5.3 mn).  For the year 2021, the company exceeded its guideline by 16% to VND 534 bn (or USD 23 mn).
• In 2022, the company has contracted volume of 3.55 bn kWh, +8% YoY. Core business earnings in 2022 might not be attractive for investors yet the cash flows and FX revenue will be. We forecast NPAT to be VND 567 bn (or USD 25 mn), +6% YoY.  However, in the short-term, the geopolitical tensions might push gas prices up that will make the company be less competitive in CGM to earn profit. Hence, the company will encounter difficulties to earn profit in the time to come.     
• Our latest target price for NT2 is VND 25,300. For the current target price with VND 1,500 dividends, implying a total return of 16% as of March 1^st, 2022 we recommend to ACCUMULATE this stock for long-term potential.

TCB – 2022/2023 outlook: expect solid growth amid headwinds

• We see factors to support NIM during the deposit rate raises. Implicit costs on CASA, including technology investments and promotion expenses should be considered when assessing the stability and growth potential of these non-maturity deposits.
• The 2021 operating results were in line with our forecasts. We make changes in the medium-term growth projections given the faster-than-expected improvement of CASA and yields. We also incorporate the on-going diversification of the funding structure towards offshore borrowings and the potential positive impact of the socio-economic recovery to the balance sheet forecasts. The new 2022 PBT estimate is down 1% from the prior one, at VND 29.1 trillion (USD 1.3 bn, 25% YoY).
• The revised forward 2022 book value per share is VND 32,721, indicating a forward P/B of 1.5 today. This presents an attractive risk reward balance despite the lack of short-term catalysts and concerns about NIM. We maintain the target price of VND 71,000/share and a BUY This translates to an upside of 41% from the closing price of March 1, 2022.

Updates on monetary market in Feb 2022

• Credit increased sharply in the first month of the year.
• Liquidity in the banking system is no longer abundant.
• Highlights of the 2% interest rate support program.
• The USD/VND exchange rate remained stable.

Credit increased sharply in the first month of the year

According to the State Bank, as of the end of January 2022, credit growth reached 2.74% compared to the end of 2021, which is the highest level in many years, reflecting the acceleration in demand for loans in the economy even during the first months of the year. On a year-over-year basis, credit growth increased by more than 16.3%. According to the SBV’s survey in December 2021, credit is expected to expand by 5.3% in the first quarter of 2022 and to grow by about 14.1% in 2022. Rising credit demand also led to an increase in deposit interest rates of some non-state commercial banks with a change of 0.1 to 0.8 percentage points compared to the previous month.

MSN – Core NPAT growth to be robust in FY2022 driven by the consumer ecosystem pillar

• We recommend to Accumulate MSN with the total expected return of 14%, including nearly 0% cash dividend.
• We estimate Masan Group’s FY2022 core NPAT to be VND 7,349 Bn (USD 318 Mn, +50% YoY). Phuc Long will contribute around VND 535 Bn (USD 23 Mn) to total consolidated NPAT, while WCM will reach VND 114 Bn in EBIT and VND 1,737 Bn in EBITDA in FY2022, equivalent to EBIT margin and EBITDA margin of +0.3% and +4.6% in FY2022, respectively.
• We view that the capital divestment from the animal feed segment is a decision with a long-term growth perspective, driven by (1) supporting business to decrease exposure to the commodity-based segment given the fact that Vietnam’s animal feed industry is in a saturation phase, and (2) the restructuring of capital investment to the branded meat industry, possessing growth potential to provide higher business upside in the long term for both MML and MSN.

MWG - Q4 2021 AM: TGDD & ĐMX ready for positive 2022 plan with potential initiatives while BHX will try to increase sales per store will at the expense of lower profit margins

• While upbeat Q4-2021 results of TGDD & DMX, primarily led by solid demand of ICT products post lockdown, lifted full-year blended SSSG to below 1%, BHX saw its monthly sales per store dropping to the under VND 1bn in Q4-2021 following weakened purchasing power dragged the chain’s SSSG down to 2%.
• Strong results from key mature chains led the Group’s revenue and NPAT growth to 13% YoY and 25% YoY, respectively, fulfilling 103% of forecasted revenue and 104% of forecasted NPAT.

• While the plan for 2022 of the TGDD & DMX chains is rather in line with recent updates, the initiatives of BHX to re-engage customer traffic are likely to cause profit margins to be worse than our previous expectations. Our current 2022F revenue and NPAT forecast for MWG are VND 150 trillion and VND 6,800 billion respectively, compared to MWG's guidance for revenue and NPAT of VND 140 trillion and VND 6,350 billion respectively. Current forecasts and TP of VND163,500 are under review.

Highlights of the industrial real estate market in 2022

• We expect FDI inflows to continue to grow in 2022, thanks to the RCEP FTA which officially came into effect on January 1^st, 2022. In the long run, Vietnam will continue to attract FDI inflows thanks to macro advantages such as competitive labor costs, low production costs, and high GDP growth.
• Lease prices of industrial parks (IP) in areas neighboring HCM City and Ha Noi economic centers have increased in Q4-21 due to the lack of IP land supply in the above centers.
• Infrastructure investment focusing on the North-South expressway will increase interregional connectivity, shorten travel time between provinces and cities, catapult occupancy rates as well as lease price growth for industrial parks.

Is the inflation issue over?

• Europe’s inflation is running at just over 5% y/y.

PGI – High profit growth will not be maintained in 2022

• 2021 gross written premium fell because of the pandemic. PAT surged 100% YoY to VND 352 bn (USD 15.3 mn) owing to low compensation payment and a sharp drop of health insurance sales, the product that has the highest expense ratio. Combined ratio declined, meaning the insurance business is more profitable than last year. However, we do not expect that to maintain in 2022, as total sales will recover following the economic recovery and health insurance sales will rise on the low base of 2021.
• For 2022, gross written premiums and PAT are forecasted to be VND 3,767 (USD 164 mn, +12.6% YoY) and VND 251 bn (USD 11 mn, -28% YoY) on the basis of higher combined ratio and the slight picking up of deposit rate. Equivalent EPS and book value per share for 2022 are VND 2,800/share and VND 22,400/share.
• For 2023, we see more growth opportunities for PAT given the recovery of deposit rate and the compensation to be normalized. Thereby, we expect a growth of 19% in PAT, higher than the growth of 11.7% in gross written premium. Equivalent EPS and book value per share for 2023 are VND 3,611/share and VND 24,500/share.
• Forward PBRs for 2022 and 2023 are 1.4x and 1.2x, approximate the average PBR of 1.3x of the last three years. We maintain our target price of VND 31,000/share. This translates to a NEUTRAL recommendation based on the closing price of February 21, 2022 and an expected cash dividend of VND 500/share within the next 12 months. Market price has risen in the short-term since the positive results of Q3 and Q4 were announced but the 2022 performance is not attractive for a higher valuation.