Company Report

Underlining the big change in the CTR business model with the new Telecom infrastructure segment, we see long term earnings growth of over 20% per annum through 2025. Following with capex to fuel new business expansion, the Company should be able to maintain its average interest coverage ratio at 5.3x between 2021-2025. As a result, we initiate coverage on the shares of CTR with a OUTPERFORM rating and a base case 1Y TP of VND 81,400 – implying +13% upside vs. the 04-Jan-2021 closing price.   

For 2020, we forecast the growth of total assets, customer deposits, and credit to reach 18.8%, 12.2%, and 26.8% YoY, respectively. NIM is forecast to improve to 3.29% from 2.47% last year, while NPL is expected to be decline to 1.95% from 2.04% in 2019. PBT is projected at VND 2.4 tn in 2020 (+86.3% YoY), translating to a ROAA and ROAE of 1.12% and 11.75%, respectively. In 2021, we forecast PBT to expand 30.5% YoY to VND 3.13 tn. EPS is expected to surge from VND 971 in 2019 to VND 1,634 in 2020 (+68.3% YoY) and to VND 2,123 in 2021 (+30% YoY). BVPS is VND 16,588 (+20% YoY) in 2020 and VND 18,598 (+12.1% YoY) in 2021. We estimate the fair value of MSB at VND 20,500 per share, equivalent to the targeted 2021F P/B metrics of 1.1x. This is equivalent to our OUTPERFORM recommendation, with an upside potential of 18.5%.

We arrive at target price on the shares of MCM of VND 77,500/share, based on 2021 EPS and a target P/E of 15x. We apply a discounted P/E for MCM compared to dairy peer, due to: (1) much more limited scale; and (2) the anticipated limited trading liquidity in the shares. This implies an impressive return on investment of 168% (including dividend yield of 8.3% for 2020). We initiate coverage on the shares of MCM with a BUY recommendation.  

BCM’s Q3 revenue grew 11.6% YoY mainly driven by the bulk residential land sales to sub-developer.  Although revenue from industrial parks declined -27% YoY due to the absence of new investors, the segment’s GPM improved to 54.3% due to an increase in leasing prices. In 9M2020, Industrial park revenue reached VND 1.216 tn (-27% YoY) while residential revenue reached VND 2.7 tn (+165% YoY). In 2021, we expect that BCM’s business performance is set to improve, as demand for industrial park (IP) land post-Covid is set to increase. In particular, we estimate that BCM will let 136 ha (+ 35% YoY) of IP land due to Expanded Bau Bang IP and Cay Truong IP. Further, we also anticipate that interest expense will decline -29% YoY after the paydown of VND 3.1 tn in debt from the proceeds rights issue in 2021. Net income attributable to shareholders in 2021 is expected to grow 44.7% YoY to VND 2.3 tn. As BCM stock price declined 10.5% from our last report dated September 9, we are upgrading the rating on the shares of BCM from SELL to Market Perform, and reiterating our target price of VND 40,700 on the shares (-3.2% downside).  

We reiterate our OUTPERFORM rating on the shares of QNS, as our TP is slightly recalibrated at 41,800 VND/share (-3% from previous TP, +19.8% upside). We have lowered our 2021F EPS target, as we trimmed numbers for the soymilk segment. The soymilk segment was more negatively impacted by local lockdowns while the sugar segment improved. The soymilk segment continues to be impacted by the storms and flooding in Q4 (late October-early November), resulting in soymilk sales declining between 7%-8% YoY in October. For 2021, we expect that the sugar and biomass segments to drive +27% YoY bottom-line growth at QNS. 

We are upgrading SAB from Market Perform to Outperform, as we raise our 12-month target price to VND227,000 (from VND191,000) on the roll over to our 2021 forecast. Our new price target represents a return on investment of 22% (including a 1.8% dividend yield). The upgrade is predicated on our improved outlook for earnings, as we increase our forecasts for 2020 and 2021 by +6.1% and +7.5%, respectively, to VND 4.5 tn (-16.1% YoY) and 5.4 tn (+19.4% YoY). SAB appears to be turning a corner with its Q3 results, as beer revenue dropped by only 13.4% YoY (vs.  -45% YoY in Q1 and -21% YoY in Q2). Meanwhile, NPAT during 3Q20 has already bounced back to pre-Covid levels (Q2, Q3 2019). 

We maintain our estimates for 2020/2021, with net sales of VND 112.4 tn (+10% YoY) in 2020 and VND 140.8 tn (+25% YoY) in 2021, whereas net income for 2020 and 2021 should reach VND 3.9 tn (+1% YoY) and VND 5.3 tn (+36% YoY), respectively. At VND 110,600 per share, MWG trades at a 2021F P/E of 9.7x, which we believe is very attractive. We maintain our BUY rating with an unchanged SOTP-based target price of VND 147,000, offering 33% potential upside. Risks: longer-than-expected impact of COVID-19 and possible lockdown at the national level.

As PLX’s share price has retraced to a more attractive level, we are now upgrading our rating on the shares of from Market Perform to Outperform with a 1-year target price of VND 55,700/share – implying  upside of 15%. PLX earnings through 9M20 amounted to just VND 193 bn, cratering -96% YoY and  meeting just 12% of its annual guidance due primarily to large losses in 1Q20. We believe that PLX’s core business will continue their path to recovery as noted by 3Q20 PBT on a standalone basis which amounted to VND 1.1 tn – up 41% linke quarter. As 3Q20 PBT was in line with our forecast, we are maintaining our 2020 PBT forecast of VND 1.6 tn. Given the recovery in petroleum demand during the month, we expect that 2021 PBT will nearly triple YoY (on 2020 low base) to VND 4.8 tn. As PBT has returned to positive, PLX can also be cleared from the HOSE margin lending ineligibility list after audited financial reports are released.

HDG posted its Q3 financial results, with total consolidated net revenue through 9M 2020 of VND 3.8 tn (+23% YoY) and NPAT of VND 962 (+21% YoY), which fulfilled 71% and 82% of their respective targets for 2020. These positive results were mainly driven from the delivery of the Centrosa project, as well as from improved performance of the energy segment with new projects such as Hong Phong and Infra Solar. For 2020, due to the accelerated handover schedule of the Centrosa project, we raise our 2020 NPAT-MI estimate by 16% since our last forecast to VND 1.1 tn (+ 17% YoY). Next year, we expect that the company’s NPAT-MI will be flat, with recognition of the first batch of the Charm Villa project, while the profitable renewable segment will grow further from 15% of weight in 2020 to  30% of 2021 total revenue. We consider the Company’s strategy to shift its business toward renewable energy a solid move forward. However, the likelihood of extended power generation for HDG depends heavily on the support mechanism of the government, as well as the ability to find a suitable project for M&A purposes in the near future. Based on current portfolio projects, we reiterate our Market Perform rating for HDG, with an unchanged 1-Y target price of VND 25,000/ share. 

One-off earnings (negative goodwill of VND880bn) and a strong Techcombank (TCB) result in 3Q20 push us to raise our 2020E NPATMI from VND914bn to VND1.9tn (-65.7% YoY). For 2021E, we forecast NPATMI at VND2.8tn (+48.8% YoY), as we expect results from consumer retail platform (VCM), Masan Meatlife (MML) and the mining business (MHT) each improved, while MSN should benefit from lower interest costs from debt repayment. On the positive front, we see: (1) continued strong momentum in the consumer business (MCH), with sales advancing by 29% YoY in 9M20 combining with stable margins; (2) improving performance of MML following a recovery in the pig feed business in 3Q20, improving profit in the meat business in terms of EBITDA margins; and (3) VCM narrowed its EBITDA margin loss during 3Q20 of to -2.8%, vs. -5.6% in 1H20. On the other hand: (1) MHT continues to struggle with weak commodity prices; and (2) a high overall leverage ratio with net debt/EBITDA increasing to 4.5x at end-3Q20.

At VND84,900 per share, the shares of VCB trade at 2020E and 2021E P/B ratios of 3.28x and 2.61x, respectively, which is more than double the sector average of 1.45x and 1.31x. 

Our new 12-month target price of VND97,400 (previously VND89,200) is derived from our unchanged target P/B ratio of 3.0x applied to our 2021E BVPS (previously average 2020-21E BVPS) and implies upside potential of 14.7%. Our analysis does not take into account the cash dividend yield of 1.9% for 2019 and 2020 to be paid out in 2020-21. As a result, on valuation grounds we are upgrading our rating on the shares of VCB from Market Perform to Outperform. Key downside risk: higher-than-expected NPLs.

TPB reported its 3Q2020 earnings results, with TOI attaining VND 2.2 tn (+13.1% YoY) and a PBT of VND 989 bn (+26.1% YoY), rendering PBT through 9M2020 of VND 3.0 tn - fulfilling 74.3% of annual guidance. At VND 24,000 per share, TPB is trading at 2020F and 2021F P/B ratios of 1.26x and 1.02x, respectively, which is lower than sector average of 1.44x and 1.30x. Our 1Y share price target is VND 28,200, and we maintain our OUTPERFORM rating on the shares.