LHG’ S 2023 AGM NOTE – STEADY, STABLE & SUSTAINABLE
21-04-2023
21-04-2023: LHG
: Industrial Land RE
: Hung Le
Tags:
- Long Hau set a business plan for 2023 with a projected revenue of VND 902.1 billion or $38.4 million, a 28.5% increase from the previous year, and an anticipated profit after tax of VND 127.05 billion or $5.4 million, a 37.7% decrease from the previous year actual figure..
- For the Capex plan, Long Hau continues to have ambitious plans with a total investment of up to VND 1,853.3 billion or $78.8 million (+23.1% YoY).
- In the long-term, progress of real estate projects seem to slow down as being impacted by master plan of the province, the Decree 35 and land use conversion policy, while LHG is accrelerating RBFs project in both Long Hau 3.1 IP and Da Nang High Tech park.
- We projected that the total revenue would be VND 126 billion or $5.36 million (+15% YoY) and NPAT-MI would be VND 45 billion or $1.91 million (-6% YoY) for the first quarter of 2023. Our FY2023 forecast for LHG’s revenue and NPAT will be VND 694 bilion or $ 29.5 million (+10% YoY) and VND 288 billion or $12million (+ 41% YoY)., respectively. While EPS will comes at VND 5,418.
- We maintain our target price of VND 33,000/share. Adding an annual cash dividend of VND 1,900 per share, the total expected return will be +38.7% (compared to the closing price of 04/20/2023).
90 Seaport – Difficulties are evident and there is no reliable signal for short-term recovery
20-04-2023
: GMD, VSC
: Seaports
: Quan Cao
Tags: Seaports
- Total im-ex value through sea containers in Q1/2023 is estimated at USD 74 billion (-12% YoY), of which the export value and import value are USD 43 billion (-10% YoY) and USD 31 billion (-15% YoY), respectively. Weakening trade flows have led to a decline in the country's container throughput. According to Vinamarine, in Q1/2023, the total throughput of containers nationwide reached 5.18 million TEUs (-15% YoY) of which exports, imports and domestic throughput were 1.76 million TEUs (-8% YoY), 1.78 million TEUs (-18% YoY) and 1.69 million TEUs (-17% YoY), respectively.
- Im-ex companies are not ready to import to store inventories as raw materials for production when the value of imports falls deeper than the value of exports, and the PMI index is also below 50 for most of the time of the last two quarters. Trade flows have not yet sent positive signals to help port operations recover soon.
HND – 1Q23 earnings in line, poor power output & high coal prices hit the bottom line
19-04-2023
: HND
: Utilities
: Hoai Trinh
Tags: HND
- HND announced its 1Q22 electricity sales volume of 1,334 mn kWh (+21% QoQ, -21% YoY), in line with our expectations. Power output fell sharply YoY mainly due to (1) poor coal supply (insufficient coal for Qc production in several months), (2) low electricity demand for consumption, and (3) lower contract power output YoY with the alpha Qc at 75% in March.
- Power output dropped YoY, while net revenue recorded VND2,571 bn)/ USD 109 mn (+1% YoY), owing mostly to the high ASP (+29% YoY) (as thermal coal prices remained high). Depreciation expenses decreased by VND71 bn )/ USD 3 mn (-24% YoY) in 1Q23, while NPAT recorded just VND10 bn)/ USD 0.4 mn (-96% YoY), primarily due to poor power output (Qc&Qm) and high coal prices (equivalent to Q4/2022), preventing HND from benefitting in the competitive general market (CGM).
- We retain our ACCUMULATE rating with the one-year target price of VND 15,800/share (adjusted up 1% from the price of VND 15,600 due to the downward adjustment of the risk-free rate). With an expected cash dividend of VND 1,000/share in the next 12 months, it implies a total return of 17%, based on the closing price of Apr 19th, 2023.
Oil Gas sector – High oil price thanks to OPEC+ cut
18-04-2023
: PVD, PVS
: Oil & Gas
: Xuan Vu
Tags: High oil price OPEC+ cut
- OPEC+ announced a cut of 1.1 million barrels per day (mbpd) in May and will maintain the cut until the end of 2023. That combined with Russia's subsequent announcement of a 0.5 mbpd cut make the group's total output cut of 1.6 mbpd. Meanwhile, shale oil supply has only increased by 0.4 mbpd since the end of 2022.
- China is likely to be the global oil demand driver after the country has reopened. This country’s demand will gradually improve quarter by quarter from 2Q2023 and averagely increase by 0.7-0.9 mbpd. Totally, the world oil demand will increase by 2 – 2.3 mbpd.
- Global demand is forecast to exceed pre-pandemic levels while supply is being cut sharply by the OPEC+. Accordingly, the IEA concerns that the market will face a supply shortage in the second half of 2023. The average price of Brent oil forecast in 2023 will be over USD 90/barrel but can not be higher than USD 100/barrel
ACB – Maintain stable return on equity in a challenging year
17-04-2023
: ACB
: Banking
: Thao Nguyen
Tags: ACB 2023 AGM
- The bank has a relatively cautious guidance for FY2023. Total assets are anticipated to grow by 10%. Mobilization growth is projected to be 8.1%. It must be noted that the 9.7% credit growth in the plan is ACB’s first granted quota as of Feb 24th. The bank will revise its credit growth guidance when receiving new quota from the SBV.
- In 2023, due to the high base effect in 2022 and taking into account the tough market landscape, the bank’s ability to benefit from credit cost reduction is expected to diminish, resulting in a moderate PBT growth of 17.2%, equivalent to VND 20,058 bn (or USD 849 mn). Regarding profit allocation for 2022 and 2023, the bank proposes a 25% dividend comprising a 15% stock dividend and a 10% cash dividend. The stock issuance for 2022 may take place in 3Q23.
- In 1Q2023, PBT grew 24% YoY to reach VND 5120 bn (USD 217 mn), fulfilling 26% its FY2023 target. Credit activity was relatively weak in the early months of the year, resulting in a marginal decrease of credit balance compared to the end of last year. Meanwhile, mobilization growth reached 2.1% YTD.
- The forecast of PBT for 2023-2024 are VND 20,431 bn (or USD 851mn, +19%) and VND 24,314 bn (or USD 1 mn, +19%), respectively. The book value per share is estimated at VND 18,453 and VND 22,253. Our latest target price is VND 30,000/share, implying an upside of 20% from the closing price as of Apr 17th, 2023 and a BUY recommendation.
Trade in 1Q23: Bottomed up?!
14-04-2023
: VDS
: Commercial
: Ha My Tran
Tags:
- Trade turnover decreased by 14% yoy in 1Q2023
- Trade bottomed up?!
- Trade recovery will be the driving force for GDP growth, but that is uncertain.
Update on the IT industry: The macroeconomic headwinds should have marginal impact on the growth of the IT services segment of Vietnamese technology players
13-04-2023
: FPT, CMG
: Technologies
: Tung Do
Tags:
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US: the bond market fears something worse than inflation
13-04-2023
: VDS
: Macroeconomics
: Bernard Lapointe
Tags:
- The yield curve ended Q1 at its most inverted level since June 1981.
- The macro impact of the failures of Silicon Valley Bank, Signature Bank and Credit Suisse plus the downgrades of several regional banks has resulted in a crisis of confidence in the banking system.
FMC – A Promising Long-Term Investment Option for 2023
12-04-2023
: FMC
: Fishery
: Loan Nguyen
Tags: Preliminary results 2023 outlook
- In Q1-FY23, the accumulated export revenue amounted to USD43.2 million, indicating a 26% decline year-over-year, which was primarily attributable to the decrease in shrimp exports. Despite the significant drop in sales, the estimated PBT for this quarter was impressive, amounting to VND50 billion, which represents an 11% increase year-over-year.
- The net sales guidance for FY2023 has been set at VND5,900 billion, indicating a year-over-year increase of 3.5%. Given by gross margin expansion, the PBT guidance for FY23 is VND400 billion, reflecting a year-over-year growth of 22%. Overall, we find this plan to be reasonably feasible, contingent upon the recovery of export prospects in the latter half of 2023, in conjunction with the implementation of the business's robust profit margin improvement strategy.
- We are upholding our target price of VND45,000/share, which suggests an anticipated return of 18%, including a 5% cash dividend yield, due to the stock's strong performance in recent times. With the most challenging phase for FMC's exports seemingly behind us, we deem this stock to be a viable option for investors seeking a long-term investment opportunity. At the targeted price, the stock's PE ratio for 2023 is 7.3x, with a corresponding EPS of VND5,461 per share.
DRC – A negative surprise from an uncertain selling volume trajectory
11-04-2023
: DRC
: Automobiles
: An Nguyen
Tags:
- On Mar 21st 2023, the Brazilian government rose import tariffs of truck tires from 0% to 16% after receiving the demand from Brazilian tire producers in Oct-2022. Brazil accounts for 60% of global DRC exports, equivalent to 36% of total 2022 revenue. We see a downside risk to 2023 exported sales growth.
- 2023 business targets with net sales and net profit of VND5,060 bn (+3% YoY) and VND264 bn (-14% YoY), respectively. We see a signal of uncertain selling volume trajectory as well as a negative surprise from double-digit negative profit growth.
- We view the higher tariff from Brazil and DRC’s 2023 conservative business plan as a downside risk to the outlook for DRC. As a result, we adjust down our forecast for 2023 revenue and net profit to VND5,053 bn (+3.2% YoY) and VND265 bn (-14% YoY), respectively. 2023 EPS was calculated to be VND2,095 (-14% YoY).
- Our new target price for DRC is VND22,600, adding a VND1,300 cash dividend, the 12-months expected return is 8.6% compared to the closing price on Apr 11st 2023, equivalent to a NEUTRAL recommendation.
Steel material market movement in April 2023
10-04-2023
: HPG, SMC, NKG
: Materials
: Trinh Nguyen
Tags:
- Iron ore and coking coal prices retrace as the global market lacks supportive news.
- Vietnamese domestic steel scrap remains high because of favorable macroeconomic factors.
VPB – Aggressive guideline for 2023 post the agreement of private placement
07-04-2023
: VPB
: Banking
: Thao Nguyen
Tags: 4Q22 Results update VPB 2023 Guideline
- In 2022, the PBT of the consolidated group and parent bank were VND 21.2 tn (or USD 899 mn, +45.5% YoY) and VND 24 tn (or USD 1bn, -36.8% YoY), respectively. Excluding one-off income from divesting FC in 2021 and Banca upfront-fee in 2022, PBT’s parent bank grew +32% YoY. Adversely, consumer finance was severely impacted by the slowdown of the economy, resulting in a loss of roughly VND 2.5 tn per our estimation.
- VPB announced an agreement with SMBC on a 15% private placement deal, equivalent to a deal size of VND 35.9 tn (or USD 1.5 bn). The deal is expected to be done within Q2 or Q3 2023 per the Bank. With the strategic participation of SMBC, VPB has climbed to the top 1 largest bank in terms of equity capital (VND 140 bn, based on the financial statement at the end of 2022). Post the deal, CAR is expected to surge more than 300 bps to reach 19%. Such thick Tier 1 capital will build a solid foundation for the Bank to sustain its long-term growth.
- VPB has planned its 2023 PBT to grow 13% YoY, implying a growth of 53% in core income sources (excluding upfront fees in 2022). Despite the joining of SMBC, we think VPB’s 2023 guidance is challenging given the current weak economic outlook. Pressure on the bank’s plan will come from low credit demand and high credit cost. Conservatively, we forecast its PBT for 2023-2024 at VND 20,944 (or USD 887mn, -1.3%) and VND 31,131 bn (or USD 1.3 bn, +49%), respectively. Correspondent book value will be VND 18,700 and 20,400, respectively. We will re-evaluate our forecast when seeing signs of economic recovery.
- Poor economic outlook and weak market sentiment have put pressure on the bank’s market price, making its stock come to an attractive valuation compared to peers’. Our current target price is VND 26,000/share, offering an upside of 24% from the closing price of April 7th, 2023. Therefore, we believe that VPB is among the banking stocks that long-term investors can consider picking for your portfolio in the deep correction session.
