PVS – Short-term outlook relies on big projects whereas renewable energy drives long-term potential
23-09-2022
23-09-2022: PVS
: Oil & Gas
: Vu Tran
Tags: Business Update
- Although revenue went up strongly thanks to mechanics & construction (M&C) segment, 2Q2022 and 1H’s profit as well dropped compared to the same period last year.
- In details, revenue in 6M2022 reached VND 7,579 billion (+33.6% YoY), NPATMI in contrast was only VND 223 billion (-24.7% YoY).
- We project that total revenue and NPATMI will come at VND 16,584 billion (+16.8% YoY) and VND 663 billion (+10.3% YoY) for the whole year 2022. Then, 2H 2022 business result will outperform the first half’s.
- Currently, PVS is expected to gain large backlog in the M&C segment thanks to Block B project. However, the project's FID has not yet finalized even though it’s expected that FID could be announced in July 2022. The prolonged delay of the project will affect PVS's business results in the next 1 or 2 years as the company has not won many huge backlock projects so far. PVS's long-term potential comes from switching to the renewable energy industry as an investor and general contractor. Hence, we maintain a conservative view on PVS. The target price of the stock is VND21,500 per share. P/E 2022 forward at this target price is 21.1x.
16 Update Decree 65/2022 for offering and transaction individual corporate bonds
22-09-2022
: VIC
: Real Estate
: Anh Tran
Tags: Policies
- Stricter regulations on the definition of professional investors are likely to significantly limit the number of individual investors that can participate in the corporate bond market in coming time. Besides, it is expected to weigh on the credit demand of the banking system in 2023, when the value of matured bond hike.
- Transparency of information and better protection of investors' interests through stricter regulations on issuance. Compared with Decree 153/2020, Decree 65/2022 requires businesses to be more transparent about the information on issuance and use of capital and control the time of issuance and information disclosure. Additionally, we also see that the position of investors is strengthened through the right to force issuers to buy back in certain cases.
- Decree 65/2022 does unlimited issuance purposes, which clarifies that enterprises can still issue bonds for debt restructuring.
- Enterprises offering individual bonds must register and deposit centrally at the Vietnam Securities Depository and Clearing Corporation (VSD). Compared with Decree 153/2020, corporate bonds can be deposited at VSD’s member companies. It supports authorities' control better compared to the previous period. In addition, in the long term, this will be a premise for developing a centralized corporate bond trading market when all issued corporate bonds are centralized and managed by VSD. As a result, investors' access to information and transactions will be more fluent.
FED interest rate decision
22-09-2022
: VDS
: Macroeconomics
: Bernard Lapointe
Tags: FED
- The US Fed raised its benchmark rate by 75 bps on Wednesday.
- This is the third such rate hike in a row, taking the funds rate to 3-3.25%.
- FOMC is split between 100 and 125 bps hike for rest of the year
IPM – IMP4 factory officially meets EU – GMP standards, which will make a significant contribution to revenue in 2023
21-09-2022
: IMP
: Pharmaceuticals, Biotechnology
: Quan Cao
Tags: Business Update
- Accumulated 8M2022, revenue and PBT reached VND 954 billion (+20.2% YoY) and VND 171.4 billion (+18.3% YoY), respectively completing 65.8% and 62.3% of the annual plan. The pharmacy sales channel (OTC) continued to maintain strong growth as it reached 41.7%, while the hospital channel (ETC) grew -2.1% YoY but showed some recovery.
- The IMP4 factory was officially announced by the Ministry of Health to meet the EU – GMP standards in 09/2022. This is the factory with the largest total investment capital of IMP, carrying a value of VND 470 billion to produce non-betalactam drugs with the aim of helping IMP penetrate deeper into the ETC channel.
- 8M2022, IMP won drug bidding packages worth VND 626 billion (of which 74.5% were Tier 2 drugs), but 50% lower than the VND 1,266 billion in 8M2021. We believe that the hospital delays in the centralized bidding planning process caused a sharp drop in the total value of the package in general and for IMP in particular.
HPG – Profits to Recover from Q4
20-09-2022
: HPG
: Materials
: Tam Pham
Tags: Business Update
- Steel production costs could drop significantly in Q4
- Selling prices started to regain, but slowly
- Q3 to be the trough of 2022 profit; construction steel to recover more quickly than flat steel. Q3 revenue and PAT could come at VND 33,821 bn (-12.5% YoY) and 3,325 bn (-78% YoY).
- Dung Quat 2 update: Commencing on May 2022, the project is in the land clearance stage. Phase 1 will come into operation from mid-2024 and phase 2 from end-2024.
- HPG stock is trading at PER of 4.5, significantly lower than average PER of 8.3 in the last 5 years. As the profit of 2H2022 is expected to be low, compared to the hike of 2H2021, there will not be much accelerate momentum for stock price until the end of the year, per our view. Our valuation is being revised to reflect the new developments in demand in the large markets and the effects of recent selling price rises. We currently have a target price of VND 33,000/share, equivalent to a total return of 43%, based on the closing price of September 20th, 2022.
DRC – Q3 2022 Results are expected to exceed the quarterly plan
19-09-2022
: DRC
: Automobiles
: An Nguyen
Tags: Business Update
- DRC set Q3 2022 net sales and pre-tax profit targets at VND1,190 bn (+3.7% QoQ; +28.1% YoY) and VND86 bn (-18.1% QoQ; +103.9% YoY), respectively. Total sales value of July & August-2022 are VND957 bn (met 77.5% of Q3 2022 ‘sales target).
- We suppose that DRC will exceed its Q3 2022 business plan based on 1) positive business results in July & August 2022; 2) strong growth of automotive production in Brazil and the US markets as the shortage chip problem started to ease since 2H2022; and 3) increasing frequency of domestic logistic activities after Covid-19.
- Because DRC ‘s results in Jul & Aug were better than our estimation, we are reviewing our forecast that may generate a new target price. Our current target price for the next 12 months is around VND 34,700, combining FCFF valuation model (50%) and multiple comparisons (50%) with an applied P/E of 13.9x.
Despite the rainy season, electricity selling prices in CGM stand at a high level
16-09-2022
: HND, PPC
: Utilities
: Nguyen Ngoc Thao
Tags:
- Total electricity volume in 8M2022 reached 182 bn kWh, +5% YoY. In Aug 2022, electricity consumption climbed by 11% YoY owing to the low base in 2021 – strict lockdown in 3Q2021.
- The hydropower group outperformed during 8M2022 while thermal groups held modest mobilization rates.
- Price in competitive market stands at a high level even in the rainy season, the main driver from the coal burning group.
- We foresee that in case coal input price stay at a such high level in the time to come, and the dry season is going to come back, the selling price in CGM is going to stand at a high level. From that, large hydropower plants will be the main beneficiaries, following by gas thermal plants.
VHC – August fillet exports remained high YoY despite a slight decrease MoM
15-09-2022
: VHC
: Fishery
: Loan Nguyen
Tags:
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Monetary policy: Finding a new balance
14-09-2022
: VDS
: Macroeconomics
: Ha My
Tags:
- External pressures are stronger than expected
- The difficulty in regulating the monetary policy of the SBV
- Find a new balance
- Cautious new credit
SIP – The quiet giant
13-09-2022
: SIP
: Real Estate
: Le Tu Quoc Hung
Tags:
- SIP’s IP portfolio has a total area of up to 3,207 ha in prime location. In particular, the available for lease area is approximately 1,000 hectares. This is enough supply for SIP to exploit in the long term.
- Residential real estate and utility services segments are oriented to sustainable development in the long term. We see that SIP is oriented to follow the model of 1 closed ecosystem that deploys other complementary business activities to support industrial park’s operation.
- In 2022, SIP plans consolidated revenue of VND 5,200 billion and NPAT of VND 668 billion, down 7% and 26% YoY respectively. In the first 6 months of 2022, SIP recorded revenue of VND 3,086.7 billion, up 3% and completed 59.4% of the year plan. Meanwhile, NPAT reached VND 501.26 billion, down 9% YoY and completed 60% of the year plan.
- We saw SIP as a potential investment not only in terms of land bank but also the ability to exploit accompanying services to increase the added – value for the firm. Besides, a healthy balance sheet will help SIP maintain an annual cash dividend of at least 2,000 VND/share. After adjusting the unearned revenue target to synchronize the accounting method with other peers, the adjusted P/B of SIP is 1.33, which is lower than the industry average of 2.
Apple iPhone 14's early release date could help phone boost ICT retailers and distributors’ iPhone revenue in Q4-2022
12-09-2022
: MWG
: Retailing
: Tung Do
Tags:
- Apple revealed the iPhone 14 series on September 7, 1 week earlier than the iPhone 13’s announcement date in last year, with starting prices staying the same.
- The iPhone 14, 14 Pro, and 14 Pro Max products are expected to be available in Vietnam from October 7 or October 14 (3-4 weeks after the release date of tier 1 markets).
- ICT retailers will have 1-2 weeks more to sell new iPhone products in Q4 this year compared to the same period last year. This, combined with the fact that iPhone products (1) make up the majority of retailers' total Apple products sales (~2/3) and (2) generally record good purchasing power in the first quarter of launching, will significantly boost Apple's revenue of ICT retailers, and distributors in Q4-2022.
DXG – Business operations affected by market
09-09-2022
: DXG
: Real Estate
: Anh Tran
Tags:
- In 2Q2022, DXG’s revenue and NPATMI posted a significant fall compared with the same period in 2021 with VND 1,550 bn (-56.5% YoY) and VND 133 bn (-55.4% YoY), respectively. In which, DXG's two main segments which are real estate and brokerage services being significantly affected by the market's difficulties.
- In 2H2022, we estimate the revenue and NPATMI to be VND 3,877 bn (+16% HoH or +8% YoY) and VND 476 bn (+18% HoH or +45% YoY). In 2022, we forecast the revenue and NPATMI to be VND 7.219 bn (-28% YoY) and VND 879 bn (-24% YoY), respectively, completing 66% and 75% of 2022 plan. EPS is estimated at VND 1.447/share.
