CTD- Gradual Change for a Sustainable Growth

Coteccons Construction JSC (CTD) performed well in Q2 with VND6,183 billion revenue (+24% YoY) and VND412 billion NPAT (+16% YoY). Contracts signed since the beginning of 2017 was nearly VND14,300 billion, boosting the total backlog at the end of Q2 to over VND26,000, 17% higher YoY.

It is evident that CTD is increasingly dependent on the housing market. Contribution from the residential segment accounted for over 70% of CTD’s revenue in H1 2017, while we expect some stagnation in the number of new housing projects in the long term.  Moreover, we also expect the leading firm in the industry to be a pioneer in diversifying its backlogs toward other market segments including commercial and office buildings, industrials and even infrastructure. We notice several signals of CTD reforming their revenue structures, one of which is the industrial segment.

TCM – Q2 2017 Results Update

Although TCM saw a slight decrease in top-line results, its bottom line showed an impressive improvement.

DHG – 1H 2017 Business Result Update

DHG has demonstrated confident in the success of FOL lifting process. As mentioned in our previous AP, the key issue is how the company deals with the drug distribution regulation for foreign enterprises.

1H2017 Trade Preview: Better Growth in East Asia

• Continued spillovers from the FDI sector to the domestic economy
• Trade recovered and moved sideways in the second quarter
• Exports to Asian countries is stronger than exports to the US and the EU
• The increase of investment goods imports showed improvements of investment prospect

QNS – Competition hurts profit

Rong Viet Research would like to give some updates about business activities of Quang Ngai Sugar after a meeting with their representative.

PAC’s Business Result Update: In line with expectation

Dry Cell & Storage Battery JSC (PAC – HSX) announced its business results in Q22017 last week, which are in line with our forecasts in the latest report (28/06/2017). To be specific, PAC achieved an increase of 14.7% YoY in net revenue (~VND 680 billion), while net profit was nearly double the same period last year (~VND 56 billion). In the first half of 2017, the company recorded a 20.8% growth in net revenue and a 53.9% growth in net profit, EPS trailing was 4,277 dong, PE trailing ~11.7x.

CTF - The Enormous Amount Of Capital Required for The Strategic Plans

After the recent meeting with the company’s representatives, RongViet Research would like to give investors some updates on the business activities of City Auto JSC (HSX: CTF).

IMP - When Stock Prices Moves Ahead of the Earnings

A high P/E ratio always requires corresponding earnings growth in the future. In case of DHG, DMC and TRA, we think that paying a high P/E for these stocks at the moment is quite risky. It would take a lot more time to have a proper assessment of their earnings outlook: whether strategic partners can deliver strong growth for DHG and DMC, and whether TRA can start off on the right foot as the company expands to western medicine area. Meanwhile, the earnings prospect of IMP is clearer as EU-GMP factories will start contribute to the total revenue in 2H of this year, and the market will have a bit of information to justify that prospect. Therefore, among top 4 pharmaceutical stocks in listed market, IMP is our favorite.

NLG – 1H2017 Results Update

NLG released Q2 results with positive signal. Revenue and NPAT-MI was VND1,006 billion (+45% YoY) and VND289 billion (+237% YoY) respectively, mostly due to the revaluation of Nguyen Son project. NLG and Japanese partners will co-develop this project, which revenue and net before-tax profit is estimated at VND1,665 billion and VND890 billion, respectively.  However, NLG only recorded 50% gain and the remaining will be recorded according to the delivery schedule in the period 2018-2020.

VSH – 2017 EGM Update

The disagreement between major shareholders during VSH’s 2017 AGM in May has resulted in no document being approved and some certain concerns among investors about how it could affect the progress of Thuong Kon Tum hydropower project, which is having far enough trouble with its Chinese contractor (Hydrochina Huadong Corporation). Fortunately, the negotiation between two biggest shareholders including REE and GENCO 3 prior to this Extraordinary General Meeting (EGM) has brought them on the same page and contributed to the success of the EGM. Below are 4 key contents that the meeting has approved:

Steel Industry Update – Thematic Report Release on 19/07/2017

Hoa Sen Group JSC (HSG-HSX), Nam Kim Group JSC (NKG-HSX) and Hoa Phat Group JSC (HPG-HSX) are the steel stocks that have been on the conviction list of RongViet Research because of their impressive business performances. The steel industry has been growing remarkably in recently owing to the strong construction demand in the domestic market as well as the effective trade policies. Being the leading firms in the industry with aggressive expansion plan, HSG, NKG and HPG are capable of make full use of the market favours in order to boost their business results further. Therefore, RongViet Research considers them as attractive in terms of valuation and we recommend BUYING the three stocks in the INTERMEDIATE TERM.