Công ty Cổ phần Chứng khoán Rồng Việt

NKG – Demand recovery on foreign market

15-08-2023

: NKG

: Materials

: Thach Lam Do

In 2Q2023, NKG recorded revenue of VND 5,500bn (USD 232mn, -24%YoY, +26%QoQ), with sales volume of 236.6 thousand tons (-9%YoY, +21%QoQ). Of which, c. 67% was to exported markets (ASEAN, EU) owing to the demand recovery, especially from 2Q23. The 2Q gross profit margin (GPM) was increased to 9% (from the low-level of 3.1% in 1Q23), and gross profit reached VND 496bn (USD 20.9mn, +260%QoQ), when the main material (Hot Roiled Coil - HRC) is trade at the average price of USD 637/ton (-9% QoQ). It has also decreased its days of inventory on hand to 107 in 2Q, to avoid the risk of HRC price instability. As a result, NKG recorded the 2Q NPAT-MI of VND 125bn (-38%YoY), after recorded net loss in 1Q23.
For 2H2023, we expect the sales volume can reach 464.4 thousand tons (increased by 8% compared to 1H23), mostly comes from export markets, and currently there is no new trade interventions (such as anti-dumping and countervailing duties) from key markets (EU, ASEAN). The 2H23 revenue will be VND 8,397bn (USD 354.3mn, -4%YoY).
Because of the uncertainty of China’s residential market - the main customer, the material price may be at the current low-level of USD 600/ton. However, there is risk that strong fluctuation might occur in 2H2023, and with the appropriate inventory policy, we expect NKG can maintain the GPM of 7% in 2H. In term of the bottom line, at the expected net profit margin of 2.8%, we estimate NKG’s 2H23 net profit of VND 234bn (USD 9.9mn), compared with net loss of VND 775bn in 2H22.
We use two methods (FCFE and PB) to evaluate the stock; our fair value comes at VND 20,100 value per share, implying a total return of -1.5% as of the closing price on August 15th, 2023, equivalent to a NEUTRAL recommendation for Nam Kim Group Jsc.

FPT - Q2-2023 AM Note: Maintaining Double-Digit Growth Target Despite Challenging Macro Outlook

14-08-2023

: FPT

: Technologies

: Tung Do

FPT maintains the target of 2023, implying that revenue and PBT will grow by 18.8% YoY and 18.3% YoY respectively in 2H-2023, despite the challenging macro environment both globally and domestically.
Global IT services: IT spending in Japan is accelerating, underpinning the steady growth momentum of the segment, despite some signs of weakness in the US market.
Domestic IT services: Challenges remain ahead.
Telecom sector: Broadband service growth slows due to structural changes.

LHG - Positive long-term outlook will overshadow the current results.

11-08-2023

: LHG

: Industrial Land RE

: Hung Le

Long Hau Joint Stock Company (HSX: LHG) has just announced its 2Q2023 financial report, showing that business results declined compared to the same period last year. Accordingly, net revenue in Q2 only reached VND 67 billion (USD 2.82 million), down 71% YoY. NPAT also decreased by 40% to VND 24 billion (USD 1.01 million). In the first half of 2023, LHG recorded net revenue of VND 182 billion (USD 7.67 million), down 48% YoY. NPAT reached VND 75 billion (USD 3.16 million), down 16% YoY.
2023 revenue will reach VND 722 billion (USD 30.4 mn, +15%YoY), NPAT grow by 48% YoY to VND 302 billion (USD 12.7 mn) thanks to the low base of 2022.
We maintain a positive long-term outlook for LHG as the value of the current leasable area in Long Hau 3.1 (LH 3.1) is revised thanks to the robust growth of rental price. 21,343 m2 of new RBFs space was put into operation creating a new source of income for LHG. The investment policy approvals for An Dinh and Long Hau 3.2 (LH3.2) are expected to be received in 2H2023/1H2024 opening more room to grow.
We upgrade the target price to VND 50,000/share as we (1) eliminate liquidity discount, (2) adjust the leasing price at LH 3.1 to USD $260/sqm for the remaining leasable area, (3) value the additional RBFs asset. Adding a cash dividend of VND 1,900 per share in the next 12 months, the total expected return will be +85.3% (compared to the closing price of 08/10/2023).

154

Seafood industry – A gradual rebound in export volume

10-08-2023

: VHC, ANV

: Fishery

: Loan Nguyen

In 7M 2023, seafood export value reached almost USD 5 billion, marking a decline of 25% YoY. The YoY decline is narrowing month by month on a lower baseline set in the latter half of 2022. Yet, a relatively sluggish month-on-month recovery rate is still apparent.
Rong Viet predicts Vietnam's seafood exports to reach USD 5 billion in 2H 2023, showing a slight 5% YoY decrease, but a 15% growth compared to the low base of 1H 2023.
Seafood exporters to the US and China might see a clearer recovery in late 2023. Anticipated trends include rising export volume, coupled with declining selling prices. Large exporters could also improve results in 2H 2023.

145

DPM - 2H23 earnings could be more positive regardless of unimpressive 1H23 business results

09-08-2023

: DPM

: Fertilizer

: Ngan Le

DPM announced 2Q23 results with a revenue of VND3,707bn (-26% YoY), and an NPAT MI of VND101bn (-92% YoY). The unimpressive results were mostly caused by a decline in urea selling prices as well as the high gas input. However, 2Q’s revenue showed an improvement in QoQ thanks to a better urea sales volume. In 1H23, DPM posted VND6,972bn revenue (-36% YoY) and VND361bn NPAT MI (-90% YoY), respectively.
Nevertheless, we have a fairly optimistic forecast for 2H23 compared to 1H23, owing mostly to (1) support export turnover, (2) the improvement of domestic urea selling prices, and (3) lower tariff price.
Global urea selling prices tend to increase before India’s bid opening on Aug 9th. Bloomberg anticipates that India’s Aug tender could reveal a 45% price increase from the last deal USD280/ton. Urea exports were 64,000 tons in 1H23 and DPM anticipates growth to 80,000 tons in 2H23 owing mostly to the next India’s tender (from Aug 9th to Aug 26th).
In the domestic market, DPM’s urea is trading at VND10,000/kg, up from VND9,250/kg in Jul, as a result of global’s momentum. We expect this price will hold through 2H23, especially when the Winter-Spring season approaches.
In 1H23, the gas sources completely came from Cuu Long Basin (an expensive source). But DPM expects gas sources can distribute among the expensive source in Cuu Long Basin (66%) and Bach Ho – Rong Doi Moi Gas Field (34%) in 2H23, and hence anticipate the tariff might decrease.
Considering the above factors, we are convinced that DPM could achieve a revenue of VND13,834bn (-25.7% YoY) and an NPAT MI of VND1,131bn (-79.6% YoY) in 2023, which contributes majority by 2H23’s profits.
With the 2023 earnings forecast of VND1,131bn, the P/E 2023 will be 13.8x, which is not attractive in our opinion. However, with the expected bright sides in 2H23, results in the potential cash dividend of VND4,000 in FY23-24 ~ dividend yield of 10%/year could be a positive catalyst for DPM shares. Furthermore, given the unpredicted movement of global urea selling prices, for prudent, we recommend NEUTRAL for DPM with a target price of VND36,200/share.

MCM - Financial income drove net profit grow

08-08-2023

: MCM

: Food, Beverage & Tobacco

: An Nguyen

Q2 2023 sales and net profit reached VND790 bn (+7.6% QoQ; -5.8% YoY) and VND93 bn (-7.9% QoQ; +3.3% YoY), respectively. Weaker-than-last year sales is the tendency for the industry under rising inflation. Higher raw milk cost is compensated by healthy financial income, resulting in positive profit growth.
We believe that the flat growth of MCM ‘s 1H2023 sales is a premise for higher sales growth in 2H2023 when the economy is expected to recover. The higher COGS could be compensated by higher financial income. As a result, MCM ‘s net profit will grow at a higher rate than revenue in 2023.
The stock price has decreased at a modest rate (-2.5%) since the beginning of 2023, equivalent to a trailing P/E of 13.7x. We suppose that the flattening trend of sales is the reason affecting the stock price. Therefore, on the expectation of higher sales and positive net profit growth in 2H2023, the stock price should be go up.

PVD – 2Q earnings was boosted by drilling contract compensation

07-08-2023

: PVD

: Oil & Gas

: Vu Tran

PVD achieved revenue of VND 1,413 bn and NPATMI of VND 161 bn in 2Q2023. Both the drilling and well services segments showed better gross margins compared to the same period last year. Notably, PVD received VND 70 bn in compensation for terminating the drilling contract with Valeura.
PVD has secured other contracts to replace the canceled drilling contract of Valeura. With these new drilling contracts, we believe that PVD's rig day rates for the entire year 2023 will remain stable or even positive, considering the currently high day rates in the region.
In 3Q2023, PVD is likely to receive the remaining compensation from the terminated contract, further strengthening its earnings for 2023. We project the full-year revenue and NPATMI to reach VND 4,997 bn and VND 336 bn, respectively, for 2023.
PVD's stock has been continuously rising recently to reflect its strong business performance in 2Q2023 and high earnings expectations for 2023 and 2024 based on the skyrocketed day rates in the region. Up to now, PVD has partially secured drilling contracts for 2024 at a day rate of around USD 90,000 per day. This ensures part of the company's profit for 2024. Therefore, we maintain the target price of 26,800 VND/share for PVD until further confirmation on the signing of 2024 contracts for its drilling fleets.

101

OCB - Q2 PBT growth driven by efforts across most business segments.

04-08-2023

: OCB

: Banking

: Chinh Nguyen

OCB maintains effective operations in most of its core business activities. Specifically, net interest income increased by 7% YoY, and non-interest income grew by an impressive 422% YoY. The total operating income showed significant growth at 23% YoY. Additionally, the bank has improved operating costs and provisions for credit losses, resulting in a 75% YoY increase in PBT.
The NPL ratio for OCB's customer lending slightly decreased by 13 bps compared to the previous quarter, reaching 3.18%. While this ratio remains relatively high, it indicates a slight improvement and is in line with other banks in the same group during challenging economic conditions. The credit cost TTM remained almost flat from the previous quarter at 0.82%, leading to a slight improvement in the provision coverage ratio at 47.5%.
We maintain the fair value of OCB at VND 22,600 per share, which corresponds to a projected P/B ratio of 1.06 within a one-year timeframe. This price level implies an expected return of 22% compared to the closing price on August 4th, 2023. Therefore, we recommend a BUY on OCB.

117

HAH – Operation vessels face challenges

03-08-2023

: HAH

: Seaports

: Quan Cao

In Q2-FY23, container volume of handling and shipping were 98 thousand TEUs (-12% YoY) and 95 thousand TEUs (-11% YoY), respectively. Accumulated 1H2023, container volume of handling and shipping were 185 thousand TEUs (-14% YoY) and 177 thousand TEUs (-8% YoY), respectively, completing 44% and 45% of the 2023 plan.
In Q2-FY23, revenue and NPATMI were VND 611 billion (-7% QoQ and -34% YoY) and VND 97 billion (-37% QoQ and -75% YoY), respectively. Accumulated 1H2023, revenue and NPATMI were VND 1,267 billion (-61% YoY) and VND 216 billion (-74% YoY), completing 43% and 44% of the 2023 plan.
Vessel operations are challenged by (1) continued low freight rates (2) three short-term charter vessels not being renewed and (3) two long-term charter vessels with high freight rates that will expire at the end of 2023. Those make the outlook for 2H2023 less positive than 1H2023.
We adjusted down the revenue and NPATMI forecast to VND 2,576 billion (-20% YoY) and VND 411 billion (-50% YoY), respectively. Revenue of container handling, fleet and other will be VND 206 billion (-4% YoY), VND 2.132 billion (-22% YoY) and VND 227 billion (-10% YoY), respectively. We use the multiple method, target P/B and target EV/EBITDA of 1,2x and 4.6x respectively. We recommend to NEUTRAL with a target price of VND 46,800.

NT2 – Q2/2023: Lower-than-expected earnings due to a gas supply insufficiency

02-08-2023

: NT2

: Utilities

: Hoai Trinh

In Q2/2023, NT2 reported lower-than-expected results, with a power output of 1,054 mn kWh (-2.0% QoQ, -10.8% YoY), while the average gas input price is 8.9 USD/mn BTU (+0.8% QoQ, -12.2% YoY). NT2's revenue and NPAT respectively recorded VND2,183 bn (flat QoQ, -19% YoY) and VND 144 bn (-38.3% QoQ, -60.5% YoY). The substantial decline in NPAT was primarily due to a gas supply insufficiency.
For FY2023, we lower NT2's net revenue forecast to VND 7,538 bn (-14.2% YoY), assuming (1) lower power output forecast to 3.7 bn kWh (-9.9% YoY), (2) an average gas price of around 8.9 USD/mn BTU (-6% YoY), and (3) a reimbursement for realized FX loss of VND 155 bn expected to receive in Q4. NT2's overhaul funding is expected to start being recorded in 2H23. Accordingly, we forecast NT2's NPAT in 2023 to VND 505 bn (-19.4% YoY), equivalent to an EPS of 1,729 VND per share.
We have a NEUTRAL rating with a one-year target price of VND 29,300/share. With an expected cash dividend of VND 2,500/share in the next 12 months, total return is determined at 9% based on the closing price on Aug 2nd , 2023.

AGG – A company with potential land bank in HCMC

01-08-2023

: AGG

: Real Estate

: Thach Lam Do

In 2Q2023, AGG recorded revenue of VND 1,676 bn (or USD 70.7mn, -38%YoY), due to the handover of ~650 apartments in the Westgate project (the apartment project in Binh Chanh district, HCMC). The gross profit reached VND 389bn (USD 16.4mn, -27%YoY), and the operating profit VND 122bn (-50% YoY, operating margin decreased to 7%). Owing to lower financial expenses and income from a penalty payment, AGG had net profit-after-tax-and-minority-interest (NPAT-MI) of VND 133 bn (-22%YoY) in that quarter. The 1H23 NPAT-MI reached VND 81bn (-33%YoY), which met ~81% of the business plan.
For FY2023, the company plans total revenue to reach VND 3,000bn (USD 126.6mn, -52%YoY), mainly coming from the handover of ~1000 units of the Westgate, and the NPAT-MI of VND 100bn (USD 4.2mn, +427%YoY). We expect that the company can meet its 2023 business plan, supported by: 1/The 04 blocks of the Westgate have been completed, including the landscape (swimming pool, central park), and 2/ The company fulfilled 81% of its 2023 business plan after the first six months of the year.
In term of sales plan, the company will launch the Gio project - a mid-end apartment project in Binh Duong - with total units of 3,000 and price range of VND 1.8-2.5bn/unit. Per the company, it has already got the construction permit and sales will commence in 4Q23. Given that the offered price is affordable and the project’s location is favorable, we expect that the market can absorb ~40% of total units, with expected 2023 pre-sale value of VND 2,640bn.
AGG is trading at a PBR of 1.6x, which is equivalent to peer’s PBR of 1.7x and its 3Y average PBR of 1.8x. The stock price has begun to priced-in the potential from their current projects (the Westgate, the Standard, the Gio). The legal status completion of Binh Chanh, however, can be the potential up-side factor asset values.

CMG – 2023 AGM Update

31-07-2023

: CMG

: Technologies

: Tung Do

For fiscal year 2023 (ends 31/3/2024), CMG plans two growth scenarios for NPAT at 15% YoY (base scenario) and 21% YoY (target scenario)
The Global Business Division set the highest profit growth target with the respective rates in the two scenarios of 59% YoY and 62% YoY, thereby making an increasingly crucial contribution to the group's profit structure (nearly 40% of PBT of 2023). Meanwhile, Digital Infrastructure Division - the main profit pillar of the Group - aims to grow profit by 19% YoY-22% YoY in 2023
CMG plans to invest with a total scale of nearly VND 2 trillion in 2023, equivalent to nearly 30% of total assets, focusing on expanding the scale of digital infrastructure and building creative space complexes (CCS) in Hoa Lac, Hanoi and Tan Thuan (HCM).
CMG is a remarkable option to participate in the sustainable growth of the IT industry, which is driven by the increasing DX adoption of businesses in Vietnam as well as globally. The current P/E 2023F/24F valuation of 20.0x/15.2x may have fairly reflected the Group's profit growth potential this year (2023F: +19% YoY). Therefore, the current valuation is more suitable for long-term holding as the 3Y CAGR of NPAT is 27%. The current target price of VND 46,800 is under review

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NKG – Demand recovery on foreign market

15-08-2023

: NKG

: Materials

: Thach Lam Do

Tags: NKG Steel

FPT - Q2-2023 AM Note: Maintaining Double-Digit Growth Target Despite Challenging Macro Outlook

14-08-2023

: FPT

: Technologies

: Tung Do

Tags:

LHG - Positive long-term outlook will overshadow the current results.

11-08-2023

: LHG

: Industrial Land RE

: Hung Le

Tags: 2Q2023 earnings update FDI LHG Industrial Park

Seafood industry – A gradual rebound in export volume

10-08-2023

: VHC, ANV

: Fishery

: Loan Nguyen

Tags: Industry outlook

DPM - 2H23 earnings could be more positive regardless of unimpressive 1H23 business results

09-08-2023

: DPM

: Fertilizer

: Ngan Le

Tags:

MCM - Financial income drove net profit grow

08-08-2023

: MCM

: Food, Beverage & Tobacco

: An Nguyen

Tags: Q2 2023 business result dairy industry

PVD – 2Q earnings was boosted by drilling contract compensation

07-08-2023

: PVD

: Oil & Gas

: Vu Tran

Tags: 2Q results update day rate remains high compensation for terminated contract

OCB - Q2 PBT growth driven by efforts across most business segments.

04-08-2023

: OCB

: Banking

: Chinh Nguyen

Tags:

HAH – Operation vessels face challenges

03-08-2023

: HAH

: Seaports

: Quan Cao

Tags: Maritime Seaports HAH

NT2 – Q2/2023: Lower-than-expected earnings due to a gas supply insufficiency

02-08-2023

: NT2

: Utilities

: Hoai Trinh

Tags:

AGG – A company with potential land bank in HCMC

01-08-2023

: AGG

: Real Estate

: Thach Lam Do

Tags:

CMG – 2023 AGM Update

31-07-2023

: CMG

: Technologies

: Tung Do

Tags:

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