FPT 10M 2021 Business Results Update: Profit growth normalized post lockdown
07-12-2021
07-12-2021:
: Retailing
: Tung Do
Tags:
- FPT posted 10M 2021 business results, in which net sales and PBT grew by 19% YoY and 20% YoY, respectively, to VND 28,215 bn and VND 5,206 bn. These results have accomplished 82%/79% of our full-year revenue/PBT forecasts, whichwere rather in line with our expectation.
- In terms of revenue, the IT sector continued to lead growth, jumping by 25% YoY. The Telecom sector gathered pace following single-digit growth amid social distancing months, posting a 10% YoY growth in October alone and 11% in10M 2021. Education & Investments maintained healthy growth at 24%.
- 10M 2021 PBT growth of IT/Telecommunications/Education & Investments sectors reached 29% YoY/20% YoY/0% YoY.
- We maintain our 2021F/22F forecasts and target price for FPT of VND 108,800, reiterating ACCUMULATE recommendation.
18 KDH – Capturing the price surge in the HCMC
06-12-2021
: KDH
: Real Estate
: Tran Hoang The Kiet
Tags:
- In 9M 2021, KDH recorded revenue and NPAT-MI of VND 3,148 bn (-3% YoY) and VND 788 bn (+2% YoY), respectively, owing to the handover of Safira (234 units), Lovera Vista (1,048 units) and Verosa Park (29 units). Meanwhile, sales activity was strongly hit in Q3 2021 given the Covid-19 stringent lockdowns in HCMC from July to end of September. As a result, KDH only sold two units at Verosa Park.
- For Q4 2021, we expect revenue and profit to reach VND 334 Bn (-72% YoY) and VND 118 Bn (-69% YoY), respectively. The result decreased significantly when KDH had few units to deliver in Q4 2021 as they mostly handed over units of Lovera Vista in Q3 2021 (580 units) and Q2 2021 (468 units). Regarding sale activity, KDH will launch a soft sale event in the Armena project with few units. For FY 2021, we forecast that KDH will achieve revenue of VND 3,481 bn (-23% YoY) and NPAT-MI of VND 924 bn (-20% YoY).
- In 2022F, we expect strong NPAT-MI growth of 2022 at 72% YoY thanks to the recognition of Armena and Clarita projects, along with sooner-than-expected revenue of Le Minh Xuan (expanded). From our view, KDH is the main player benefitting from the price surge in the HCMC market amid the supply stagnant in this area. The target price will be updated in the Result report in December.
F&B sector - Key behavioral changes in household spending during lockdown periods
03-12-2021
:
:
: Toan Dao
Tags:
- Consumer confidence is still low versus normal level with 54% of households facing financial problems and more than 50% of households with income lower than 17 million VND (736 USD) witnessing rising financial difficulty.
- Consumers will continue to rationalize their spending by understanding the role of categories and ability to command pricing, leading to the shift of consumer behavior to value offer and focusing more on price factor and products on sale.
- FMCG demand to keep growing in the new normal to serve home eating, led by (1) the more importance of home life, (2) more F&B companies trying to shift products toward home eating and (3) food delivery to develop on a continuous increased adoption rate in Vietnam.
QTP – Favorable factors to enhance earnings in the medium term
02-12-2021
: QTP
: Utilities
: Nguyen Ngoc Thao
Tags:
- Volume in 3Q2021 is estimated to be 1.6 bn kWh, +34%YoY. This higher volume than last year is due to favorable hydrological condition in the North. The draught has come and the thermal group will achieve a high mobilization rate.
- In 3Q2021, revenue was VND 1,973 bn (or USD 86 mn), -20%QoQ and +13% YoY. NPAT was VND 86 bn (or USD 3.7 mn) while that in 3Q2020 was a loss. Earnings grew mostly thanks to a decline in depreciation expenses.
- Longer term, earnings are expected to grow thanks to a decline in expenses and high mobilization from thermal plants in later years. This time is considered to be a turning point between a harsh year in 2021 and a brighter outlook in later years.
- The company pays attention to paying dividends. It will maintain its dividend payment policy at 10% per par as of 2020.
DPR – Expect abnormal income in Q4 2021 but stable results in 2022
01-12-2021
: DPR
: Real Estate
: Hoang Minh Thang
Tags:
- 9M 2021 revenue reached VND 727 billion and NPAT-MI was VND 161 billion (+23% yoy). We forecast DPR to record NPAT-MI of 184 billion in Q4 (+142% yoy) and 345 billion in 2021 (+94% yoy) respectively. The sharp increase in earnings is attributed to non-core earnings from the handover of 200 hectares of land, which contributed VND160 billion to NPAT-MI). Growth in revenue and NPAT-MI in 2022 is expected to slow down, estimated at VND1.241 billion (+2% yoy) and VND350 billion (+2%).
- DPR will increase its ownership in Dong Phu Dak Nong Rubber JSC (DPD) from 88% to 100% to complete the merger in 2021.
- Based on the sum-of-the-part valuation method (SOTP), we estimate the target price to be VND 88,000 per share. The new cash dividend is expected in the next 12 months at VND3,000 per share. The total expected profit is about 13.8% (compared to the closing price on November 30, 2021).
ASEAN Equity Markets
30-11-2021
:
: Macroeconomics
: Bernard Lapointe
Tags:
- Equity markets in ASEAN, except for Vietnam, have not done well versus developed markets.
- Energy prices are a drag on most emerging economies.
- Private equity deals. Much more in developed economies than in emerging markets.
Is inflation a risk for economic recovery?
29-11-2021
:
: Macroeconomics
: Ha My
Tags:
- Inflation is running hot globally.
- Transitory vs. Persistent inflation.
- What is happening with Vietnam’s inflation right now?
HCMC’s residential real estate market: Plummeted in Q3 but market is likely to recover.
26-11-2021
:
: Real Estate
: Tran Hoang The Kiet
Tags:
- HCMC's condo market in Q3 2021 was hit hard amid strict lockdown caused by the escalation of Covid-19 given the significant drop of both supply (-60% YoY) and sold units (-68% YoY). The average primary price still rallied backed by the supply shortage. On the positive side, the absorption rate was still over 80% even with online sales (c. Moonlight Centre Point in Binh Tan).
- We expect the market to recover from Q4 2021 and will be better in 2022 with new launches from the resumption of offline sale events given the high vaccination rate (over 85% in HCMC) and the fact that large developers have delayed their projects to 2022.
- New launches in 2021-2022 are mainly attributed by Thu Duc City and Binh Chanh regions. The accelerated of nearby infrastructure projects will drive Thu Duc City market momentum while the “turning pages” story heat up the Binh Chanh region.
Steel industry update – Strong recovery in the domestic market
25-11-2021
:
: Materials
: Tu Pham
Tags:
- Total steel consumption grew strongly in 10M2021, mainly driven by high export volume in both coated and construction steel.
- Domestic consumption has recovered in October in major segments after the easing of social distancing measures in the South.
- Construction steel selling volume rose in October driven by both high growth in exports and domestic sales. Producers sold roughly 1.2 million tons, increasing by roughly 60% YoY.
- Recovery in the domestic market boosted steel pipe sales and supported coated steel consumption to remain at a high level.
DPM – Urea price will be the main factor to follow
24-11-2021
: DPM
: Fertilizer, Chemicals
: Vu Tran
Tags:
- Revenue and NPAT-MI reached VND 2,824 bn (USD125.5 mn) (+44.4% YoY) and VND 630 bn (USD28 mn) (+145.1% YoY) respectively in Q3/2021 due to favorable movements of selling prices of urea products.
- Urea's gross profit margin reached 44.0% in 3Q2021 compared to 36.0% in 2Q2021 and 28.4% in 3Q2020.
- Urea price factor will need close attention to when DPM stock price has been led by a strong increase in urea price recently. In addition, the gas tariff is also an unknown factor as DPM has not fixed the gas price contract with PVGas for the FY 2021. GAS is temporarily charging DPM a tariff of 1.9 USD/MMBTU.
- Business activities are expected to continue to be favorable in 4Q2021 following the increase in selling price of urea. So we believe that the stock price can reach to VND53,100 per share at the end of 2021 to factor the impressive 4Q result. However, the profit of 2022 is forecasted to decrease when there is no longer an abnormal profit and the urea price is unlikely to be as high as in 2021. So the investor should consider it because the stock is likely to drop to price in the decreasing bottom line event in 2022.
- DPM is being traded at 2021 PE forward of 6.2x and 2022 PE forward of 14.1x.
TNG: Strong revenue growth is expected in 2022 driven by real estate
23-11-2021
: TNG
:
: Loan Nguyen
Tags:
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MWG – TGDD & DMX thrived post-lockdown, but BHX’s sales per store dropped
22-11-2021
:
: Retailing
: Tung Do
Tags:
- Social distancing caused a divergent in key chains’ SSSG: TGDD & DMX stores posted a SSSG of -36% while BHX chain thrived with a SSSG of +33% in Q3-2021.Higher contribution of DMX Super mini (DMS) lifted blended GPM of TGDD & DMX to 23% (+1.5 pps YoY), whereas effort to increase fresh food supply in the time of social distancing propped BHX’s GPM after wastage up to more than 28%.
- After the lockdown relaxation in October, consumer electronics chains’ revenue jumped to more than VND10 trillion on the back of pent-up demand and promotion campaigns, but BHX’s revenue declined to around VND2 trillion due to impacted demand following repatriation of consumers and wet market reopening. As a result, BHX is likely to incur losses in Q4-2021 after a profitable Q3-2021.
- We revise 2021F NPAT upward by 12% to VND4.7 trillion (+20% YoY) to reflect system-wide profit margins expansion. On the back of SSSG recovery for TGDD & DMX and enhanced profitability of BHX, 2022F Revenue/NPAT are projected at VND150 trillion (+26% YoY)/VND6.8 trillion (+45% YoY). As a results, we revise the TP by +10% from the last report to 163,500, implying a total expected return of 19% as of Nov 22nd, 2021.
