The Automobile Market: Be Optimistic In the Second Half of The Year

According to the latest report from the Automobile Manufacturers Association of Vietnam (VAMA), the total automobile market sales in the first half of the year decreased 1% over the same period in 2016.

NTC – 1H2017 earnings release comment

Nam Tan Uyen IP (NTC – Upcom) has announced its Q2 result with Revenue and NPAT recording respective 20% and 201% YoY growth. For the 1H2017, NTC recorded VND75 bil in net profit (increasing by 117% YoY and completing 138% of its 2017 guidance). The impressive result is thanks to continuous strong demand for industrial land and lower than expected financial expense as Land use right (LUR) payment turns out less than initially calculated.

A Summary of Regional Aviation Markets - Malaysia Market

In recent days, the Vietnam aviation industry heats up with the intention to join the industry of Vietstar Airline, Air Asia, and FLC’s Viet Bamboo Airline. The potential participating of new players promises a higher competitive environment in the industry, which currently finds itself with only three main airlines: Vietnam Airlines, VietJet Air and Jetstar Pacific. To have a thorough view about this matter, RongViet Research would like to review the competition of other markets in the region.

TVT – Eyes on Fabric Segment

TVT ranking among largest textile companies operates in yarn, fabric and garment segments, with the current capacity of 12K tons yarn, 47mn meters fabric and 5 million apparel units.

LTG - Roadshow highlights

Loc Troi will list on UPCOM on 24/07/2017 with the ticker LTG. The initial listing price will be VND55,000/share

DQC – Company Report on 07/14/2017

2017 onwards, the Cuba receivables and export markets will no longer contribute to DQC’s earnings. This negative effect, however, will be partially offset thanks to the booming of LED lighting in Vietnam. Having products with realiable quality and a 44-year-old national brand, DQC should be able to utilize this trend and enjoy strong growth in LED business in coming years, despite fierce competition from small enterprises and imported products from China.

Hydropower Industry – Industry Update Report Introduction

In 1H2017, the electricity market witnessed consumption growth overwhelming system capacity growth. Meanwhile, the hydrological condition seems to favor hydropower plants with amount of rainfall being notably higher than multiyear average  level. Compared to the situation in 1H2016, which was heavily influenced by El Nino, the above movements in 1H2017 would promise to deliver strong bounce in business result of hydropower companies.

When it comes to the second half, the most recent forecasts has dramatically reduced the risk of El Nino’s return in 2017, brightening the outlook of hydropower industry in 2H2017. However, 2H2017 business result would not have further surprise like in the first half.

Based on plan of EVN and the government’s intention to boost GDP growth in the 2H 2017, we expect that electricity consumption growth would continue to surpass system capacity growth in 2H2017. In this case, unless the hydrological conditions change badly, hydropower companies would reap positive overall 2017 business results.

DRC – Company Report Introduction

Da Nang Rubber JSC (DRC – HSX) is a leading domestic manufacturer in the tire and tube industry in Vietnam. In recent years, the company's new product - the Radial tire is still in the process of market penetration so that the result has not been as expected.

BFC - Result Update Report Introduction

Given that Q1 is the off-season for fertilizer consumption, while Q2 is the peak season, a small amount of profit transferred from Q2 to Q1 will make the Q1 results impressive. Coupled with the earlier start of the rainy season this year, we stand by our view that 2Q17 results will not record strong YoY growth as in 1Q17.

DRC - Update on Radial Tire Production and Sales

The radial tires project has become the most important and most widely held story that stock investors have set for DRC. However, in recent years, weak domestic penetration and intense competition in export, DRC's Radial segment has not shown any improvement. Moreover, DRC decided to reduce the depreciation time of equipment, which made the results of this segment more and more negative. However, since the second half of 2017, we think that Radial DRC's consumer outlook will be more positive and will likely start contributing to profit this year. With the intention of releasing a DRC update report in the next few days, we would like to share our views and perspectives on the DRC radial tire project.

HTI - Company Report Introduction

IDICO IDI (HTI–HSX) specializes in building bridge and road infrastructure. The firm is the investor of BOT An Suong – An Lac road in the Northwest of HCMC. This is the vital transport route for cargo from Southeastern and Central region to Mekong Delta region. Fast growing industrial activities and rising vehicle ownership would support traffic growth passing by HTI’s project tollbooth. The MOT forecasted traffic from HCMC to Long An to record annualized growth of 3.5% in 2011-2020 and 5.1% in 2021-2030. To strengthen its breadwinner project, HTI is investing flyovers at An Suong-An Lac’s major junctions to speed up traffic pace and create long-term competitiveness against the newly built HCMC-Long Thanh-Dau Giay and Ben Luc-Long Thanh Expressway.          

Electricity supply and demand outlook in 2017

Electricity consumption in 1H2017 grew by 8.5% and expect to grow even stronger in 2H2017 as the government has shown their determination to boost GDP growth aggressively in the second half, which implies higher electricity demand from the economy. Meanwhile, the total system capacity only increases by 3.9% in 2017, according to EVN’s plan. We regard these movements as supporting factor for electricity supply side in 2017.