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.

GMD – Better-Than-Expected 2021 Business Results

• In 4Q/2021, revenue reached VND 1,038 billion, +47% YoY, NPATMI reached VND 190 billion, +226% YoY. Thereby, for 2021, revenue/NPATMI reached VND 3,206 billion (+23% YoY)/605 billion (+63% YoY). Both were 20% higher than our forecasts thanks to solid growth in port operation, high profits from associates and costs tightening scheme.
• Import-Export turnover recovery upon economies reopening, coupled with the competitive advantage of location and demand guaranteed by strategic partner CMA-CGM, will be supportive the growth of throughput at GML terminal. We expect GML’s throughput to reach 1,560 TUEs (+95 % YoY) for 2022F, fulfilling phase I capacity. More capacity to be added with the construction for the second phase in mid-2022. Projected net profit for GML comes at VND 343 billion, significantly underpinning GMD’s profit from JVs to grow by 114% YoY.
• Port operation of GMD’s Hai Phong terminals will continue to grow as Nam Dinh Vu terminal attracts new services. The start of Nam Dinh Vu phase II on December 28^th 2021 will create more growth potential for Nam Dinh Vu when Nam Hai and Nam Hai Dinh Vu terminals are already operating at full capacity. We expect the throughput at GMD’s Hai Phong terminals to reach 1.2 Mn TEUs (+16.6% YoY) in 2022F.
• Current 2022 forecasts, revenue of VND 3,214 Bn (+0.3% YoY) and PBT of VND 996 Bn (+ 23.6 % YoY), and target price of VND 55,700 are under review.

VCB – Beating expectations, preparing for the private placement

• 4Q21 earnings beat our forecasts by 11% (VND 8.1 trillion versus VND 7.3 trillion in PBT) due to extensive cost reduction. Total operating income was somewhat up to expectations with a 1% deviation, while provisions were higher than our projections given the deterioration of a interbank loan. For the whole year, VCB reported VND 27,372 bn (USD 1.2 bn, 19% YoY) in PBT, exceeding our estimates by 3%.
• We revise up our 2022-2023 projections as a result of the better-than-expected figures. We make major changes in the forecasts of CASA, funding costs, deposit growth, credit costs and service income. Ultimately, 2022-2023 PBT is revised up by 11% and 1% to VND 36,758 bn (USD 1.6 bn, 34% YoY) and VND 41,035 bn (USD 1.8 bn, 12% YoY), respectively.
• We factor in the private placement deal in 2022 with conservative inputs. We come up with a new forward 2022 book value per share at VND 39,709. The target price is revised up by 23%, at VND 112,800/share as a result of the private placement to foreign investors and robust earnings growth in the base case. This is equivalent to a BUY recommendation and an upside of 29% from the closing price of February 17, 2022.

REE – One-off earnings boosted the business results in 4Q2021

• In 4Q2021, revenue/ NPAT grew by 14% YoY/ 22% YoY to VND 1,898 bn (or USD 83 mn)/ VND 792 bn (or USD 34 mn). This is a record-high thanks to one-off earnings in the real estate segment and the contribution from the power segment.    
• For the year 2021, NPAT reached VND 1.854 bn (or USD 81 bn), +14% YoY. In which, the power segment increased by 25% while other segments decreased.
• We reiterate our BUY recommendation on REE with a TP of VND 84,300, an implied return in the next 12 months of 23% as of Feb 15^th, 2022.