Company Report

At the recent AGM, PLX set a conservative 2022 earnings target of VND 3.1 tn, declining 19% YoY. PLX’s PBT dropped -44% YoY during 1Q22, mainly due to weak performance in the petroleum segment associated with high oil price volatility and input supply disruptions at the Nghi Son refinery. However, we expect a rebound in earnings in the upcoming quarter given the increase in oil prices and the stabilization in input sources. According to management, the PBT between Jan-May ‘22 is estimated at VND 1.3 tn, accomplishing 44% of annual guidance. This implies a PBT of VND 770 bn in Apr and May and signals a significant improvement over 1Q22 results.

The shares of NT2 have achieved our target price of VND 26,800 (as our 18-Apr-2022 update), and we adjust the company’s 2015-2019 FX loss claim to our estimates to derive the new target price of VND 29,300 (+5.4% upside). The shares offer a 2022 dividend yield of 6.5% while the current 12-month deposit rate range is 5.0%-5.2% at the SOCBs and JSCBs. Over the next 12M, an estimated +100bps increase in deposit rates is assumed and NT2’s dividend yield may not be as attractive given the stock’s limited upside. With total ROI of 12.1% including dividend yield, we call for Market perform rating on the shares.  

In 2018-2020, VTP has been a favorite mid-cap high growth stock mainstay for investors, with earnings growth ranging between 40-50% p.a. thanks to its direct exposure to the Vietnam e-commerce growth story. However, even after COVID-19 has sped up ecommerce market growth significantly, the express delivery market after 2020-2021 period has been further sculpted and is continually refined. It is thus of little surprise the market has been heading into a new period, with more competition and with higher expectations of better infrastructure and customers’ demand for higher service quality. In that context, VTP needs some time to retool its approach towards a new growth strategy, with an initial focus on infrastructure investment before it can reap the fruit of reward, and see high growth yet again. At the current market price, VTP is trading at a 2022F and 2023F forward P/E of 20x and 17x respectively, compared to the regional peers’ average of 24x. We maintain our target P/E of 20x, but lower our estimates for VTP as discussed below. As such, we revise our VTP 1Y target price to VND 74,000/share (12.8% upside), with an MARKET PERFORM rating for the stock.

We attended the PHR AGM, where the company set its 2022 PBT parent company guidance growth target of 150% YoY to VND 899 bn, solely due to a one-off land compensation related to the VSIP 3 project. We forecast that 2022 consolidated net income will increase 117% YoY to VND 1.1 tn. Over the long-term, PHR is expected to diversify away from its core rubber business and become a developer of industrial parks. As such, PHR has begun the process of obtaining the necessary legal approval to develop Tan Lap Industrial Park (400 ha) and the second iteration of the Tan Binh Industrial Park (Tan Binh 2; 1,055 ha) in Binh Duong province. We raise target price to VND 74,000 per share (from VND 59,600) to reflect the increase in lease rate of industrial parks in Binh Duong province. Post-broader market sell-off over the past several weeks, the shares of PHR now look quite attractive. With an ROI of 30% (6.7% dividend yield), we call for BUY rating on the shares.

We attended the DCM AGM, where the company set a very conservative net income target of VND 513 bn (-72% YoY). In our view, natural gas and coal prices likely will not decline much over the remainder of 2022 as the Russia-Ukraine war is lasting longer than we had initially expected. We hence estimate that 2022 net income will increase 71% YoY to VND 3.275 tn as we assume higher urea ASP than the guidance. DCM is traded at a 2022 P/E of 6.5x and EV/EBITDA of 2.1x, which are much lower than its historical average of 12.5x and 3.5x. Despite expected strong earnings, the DCM share price has dropped along with the market sell-off, hence creating opportunities to accumulate the stock. With a target EV/EBITDA of 3.5x, we derive a 1Y target price at VND 48,900 per share. We call for an OUTPERFORM rating, with an ROI of 41.5% (including a 5.6% dividend yield).

We expect the company to post net sales and net profit of VND 5.8 tn (+22% YoY) and VND 434 bn (-2% YoY), respectively, in 2022, reflecting  preliminary 1Q22 results. At VND 91,600/share, MSH trades at a 2022 P/E of 11.2x on SSI Research estimates and 12x on company guidance. This is lower than peer average of 13x. Our rating on the shares of MSH remains MARKET PERFORM, as does our 1Y target price of VND 97,800/share (+7% upside) based on our target P/E of 12x. Despite the short-term headwinds, we believe that the recent capacity expansion from two new factories are supportive medium-term catalysts for the shares, as orders continue to shift from China to Vietnam.

We recently attended the MWG AGM, wherein the management guided for 2022 earnings to increase by 30% YoY. As a result, we increase our SOTP-based 12-month target price to VND196,000 (from VND174,000) – for upside potential of 31.4%. While the revenue recovery for its grocery chain (BHX) is slow, 2022 earnings growth should be supported by: (1) a recovery of DMX/TGDD off of a low base in 2021; and (2) improvement to BHX’s bottom line due to cost optimization measures. Our 2022 revenue and net income estimates are now VND138.8tn (+13% YoY) and VND6.7tn (+37% YoY), respectively. The AGM pledged a maximum of 20% toward a capital raise to expand the grocery segment beginning 2023 - a positive catalyst for the shares, in our opinion. We, hence, raise our target PS for the grocery segment from 0.8x to 1.3x, which is decent compared with the PS of 2x based on the most recent stake sale of Wincommerce (a competitor grocery chain). We reiterate our BUY rating on the shares of MWG. Downside risk: possibility of store closures due to renewal of lockdown measures.

VHC continued to post solid quarterly results, as net sales and net profit advanced 83% and 336% YoY, respectively, in 1Q22. As a result, we are reiterating our OUTPERFORM rating on the shares of VHC and are increasing our 1Y target price to VND 101,300/share (+14% upside) from VND 86,800/share. VHC remains highly confident with its strong demand in nearly all markets. Going forward, VHC expects export prices to anchor at this current high level, given the rising fish material and aqua feed costs. The AGM approved accelerating net sales and net profit guidance of VND 13 tn (+43.6% YoY) and VND 1.6 tn (+44% YoY), respectively, for 2022. Although, SSI Research is substantially more sanguine than management, expecting VHC to post net sales and net profit of VND 13.4 tn (+48.2% YoY) and VND 1.9 tn (+71.1% YoY), respectively, over the same period.

From our recent call in November 2021, HAX share price has increased 25% and reached our previous target, with better-than-expected growth in its 2021 earnings result. However, after attending recent 2022 AGM, we saw a possible peak in HAX earnings in Q2 & Q3 2022. We have also seen stricter requirements in terms of Mercedes’ dealer standards, which has pressured the company to raise significant equity for expansion, and dilute earnings growth in the near term. The impact of worsening chip shortage also causes us to lower 2022 and 2023 earnings forecast. Thus, we decided to rerate HAX to UNDERPERFORM, with a revised 1-yr target price at VND 32,000/share after taking into account the dilution impact, which equates to total return of -4% from capital gain of -6% and expected dividend yield of 2%. We expect 2022 total sales and net profit to reach VND 5.8 tn (+5% YoY) and VND 218 bn (+36% YoY), respectively.  Dilution ratio is 21% if the right issue is fully absorbed and recent convertible bonds is fully converted in 1-yr, in our estimate.

We reinitiate another strong BUY rating for TRA. From our recent call in August 2021, TRA share price has increased 28% and reached our previous target, with strong earnings growth confirming our previous forecast. After attending recent 2022 AGM, we saw another buying opportunity as the company: (1) continue to post double-digit sales growth, with increasing number of R&D and transferred products, (2) benefit from strong demand on drug store and hospital channel due to less severe Covid-19 cases and recovery of nationwide hospital visits, (3) persist improvement in profit margin as SG&A expenses on sales continue to decline.  Thus, we upgrade our 1-yr target price for TRA to VND 124,400/share as we roll out our earnings forward for 2022, equal to 24% upside from the current price of April 6^th 2022, plus an expected 3% dividend yield for 2022. We keep our earnings estimate similar to previous report, with total sales and net profit in FY22 to reach VND 2.6 tn (+19% YoY) and VND 343 bn (+29% YoY), respectively, and raise our target P/E from 17.5x to 18.0x to reflect the high-growth period of the company.

Since our upgrade to BUY on March 7, 2022, the shares of DGC surged 29% - surpassing our target price. As such, we downgrade the shares of DGC to OUTPERFORM, with just 11% remaining to our new target price of VND 252,000 (based on unchanged target PE of 11x, vs previous target price of VND 214,000) per share. On March 29, 2022, DGC held an AGM whereby the company provided conservative net income guidance of VND 3.5 tn (+39% YoY) given the reduced sales volume for wet phosphoric acid and thermal phosphoric acid. As phosphate rock reserves in Vietnam becoming increasingly scarce, management set a conservative sales volume target. Nevertheless, we believe that DGC could increase the extraction of phosphate rock from its own mine to compensate for the reduction in externally purchased phosphate rock. Given a greater-than-expected 1Q22 ASP for yellow phosphorus, we raise our 2022 net income estimate 24% to VND 4.6 tn (+83% YoY).

Despite the credit contraction (- 1.5% QoQ) during 3Q 2021 due to the pandemic, income streams at ACB remained robust (+27% YoY). This allowed ACB to accrue bonuses in advance for 4Q 2021, and provide an additional VND 820 bn (+406% YoY) against bad debt while maintaining relatively flat bottom-line YoY at VND 2.6 tn. Throughout 9M 2021, PBT was VND 9 tn (+40% YoY) - completing 85% of the AGM plan and 75% of our in-house estimate. With its prudent stance toward risk management, ACB’s credit cost are likely to remain elevated for the remainder of 2021 and 2022. However, we believe that the bank could be able to maintain its NIM at 4%, given gradual improvement in CASA, and the room to optimize liquidity ratios. Accordingly, PBT for 2021 and 2022 are projected at VND 11.8 tn (+23% YoY) and VND 14.7 tn (+24% YoY), respectively. Our rating for the shares of ACB is BUY, and our 1Y target price is VND 41,750/share.

Despite our downward earnings revision for 2021, we still believe that oil prices for 2021 and 2022 will remain above USD 60/bbl), oil&gas projects in Vietnam and in the region will gradually restart, and that there will be better pricing for PVD services. PVD is trading at a 2021F and 2022F P/E ratio of 221x and 39x, respectively, which is quite pricey. Forward P/B for the 2021-2022 period, however, is a much more reasonable 0.57x. We reiterate our Market Perform rating on the shares of PVD, with a revised 1Y TP of VND 21,000/share (~13% upside) from our previous TP of VND 23,000/share. Additional upside surprises could come from news on contract bids won for 2022, or higher oil prices. Downside could occur from a delay in the deployment of the TAD rig (commencing operation in Oct 2021), as well as a lower oil prices.

At the current price of VND 49,000/share, VEA is trading at a 2021 P/E forward of 10.8x and 2022 P/E forward of 10.0x. From our last call in Feb, VEA share price has risen 10% and reached our target price. Therefore, combined with a lower-than-expected dividend payout for 2021 – 2022, possible prolonged pandemic impact up to 2022, and a further delay on the HNX listing plan, we decided to rerate VEA from MARKET PERFORM to UNDERPERFORM. We keep our earnings estimate for VEA similar to previous report at VND 6.02 tn (+9% YoY) in FY21 and 6.52 tn (+9% YoY) in FY22, thus result in 1-yr target price for the stock of VND 42,000/share using both P/E and DCF valuation method (equal to total return of -3% from capital loss of -13% & expected dividend yield of 10%).