Company Report

At current price of VND 84,200/share, VHM is being traded at 2019 P/E metrics of 13.7x, which is low compared with industry peers. Regarding to valuation, after reviewing actual unit prices and sale progress (including both retail and bulk sales) at the three mega projects which are better than our previous assumptions, our target price is raised from VND 91,400/share to VND 99,000/share, implying an upside of 17.6% compared with the current market price. Hence, our rating is OUTPERFORM for the stock at present.

At the current price of VND 103,700, shares of MWG are trading at 2019E and 2020E PERs of 12.0x and 10.1x respectively. The stock price has increased by 14% in the past one month. We think the main reasons for the good performance of the stock include: (i) the impressive business results of the company in 5M19, especially Bachhoaxanh; and (ii) the impressive performance of its covered warrants. We maintain our SOTP-based 12-month TP for MWG of VND160,300/share for a 54.6% upside potential, and reiterate our BUY rating.

At the current price, HSG is trading at 2019 and 2020 PER forward metrics of 9.4x and 9x respectively. We maintain our Market Perform rating on the stock, with a target price of VND 8,100/share based on consistent PE, PB and EV/EBITDA targets of 7x, 0.6x and 6.5x respectively. We think that the recovery in profit margin and the stabilization in the galvanized steel market can be supportive factors for HSG in the coming time. However, we think that the stock can be more attractive in case the company shows improvement in sales volume and market share.

At the current price, PLX is trading at 2019 level of 20.6x, which is equivalent to regional peers. We apply the SoTP method to estimate fair value of the stock price, with the target PE of 21x for the parent company thanks to its strong market position and 9-10x multiple for PLX subsidiaries. Accordingly, our 1-year target price arrives at VND 73,100 share, implying an upside of 14% from the current share price. Our rating for the stock is Outperform.

At the current price, VGC is trading at a 2019 and 2020 PERs of 13.5x and 12.1x respectively. We maintain our Outperform rating for the stock, with a 1- year target price of VND 22,800/share, implying an upside of 13.2% from the current price. We think that encouraging earnings growth in 2019, as well as upcoming government divestment, would together be supportive catalysts for the stock over the next 12 months.

At the current price of VND 23,300 per share, LTG is being traded at a 2019 PER of 4.2x on total earnings and 5.7x on core earnings. We think that the main business (CPC – making up 53% of net sales and 77% of gross profit in 2018) will face more competition from cheaper generic products imported from China, while the improvement in rice and seed businesses may not be adequate to offset the decline in CPC earnings in the near term. In the longer term, LTG growth will depend on the potential of the rice business, which is quite uncertain at the moment. Nevertheless, LTG is traded at a cheaper valuation compared with industry peers, with a decent dividend yield (6.9%). For valuation, we use a target PER of 6x, lower than the peer average owing to high D/E ratio amid thin net profit margin. As such, we arrive at 1Y target price of VND 25,500, which is equivalent an upside of 9% from the current price and a MARKET PERFORMANCE rating.

Based on audited financial statements, 2018 BVPS and EPS of BVH were VND 22,065 and VND 1,612 respectively. At the current price of VND 81,300 per share, the stock is trading at 2018 PBR and PER of 3.7x and 50.4x respectively. Based on the company’s 2019 plan, 2019 BVPS and EPS of BVH on a respective basis are estimated at VND 22,748 and VND 1,676, with current PBR and PER at 3.57x and 48.5x. We estimate that if the capital issuance is implemented in 2H 2019, at the price equal to 3 times BVPS as of June 2019 at VND67,220 per share, BVH would have the proceeds of VND 2.785 tn. 2019F BVPS would pop up at +11% to VND 25,231. The PBR at current price would then be 3.22x.

At the current price of VND 50,700, shares of FRT are trading at 2019 and 2020 forward PER levels of 8.7x and 8.5x respectively. This is compared to our estimate of industry incumbent leader MWG at 10.6x 2019F PE, coupled with a projected 2019E PE of 14.1x for the VN-Index. We apply a target PER of 10x (down from 12x due to slower growth of ICT segment and low liquidity of the stock) for FRT to arrive at a price of VND 58,330/share, a 15% upside. Therefore, we reiterate a MARKET PERFORM rating for the stock in 2019.

At the current price of VND 23,250, PC1 is traded at PE 2019F of 8.0x and 2020F of 6.1x. For 2019 results, we think that the company is traded at a reasonable PE compared to its historical PE. However, given the expectation of a strong growth of NPAT in 2020 at 31.6% YoY, the stock is traded at an undervalued price. We apply a PE of 8x to average 2019 and 2020 EPS of VND 3,345 to arrive at a 1-year target price of VND 26,760, a 15% upside. Therefore, we issue an Outperform rating for PC1 in 2019.

At the current price of VND246,000/sh, SAB is trading at 2019E and 2020E PERs of 34x and 31.1x, respectively, and a 2019E and 2020E EV/EBITDA of 20.6x and 18.9x, respectively, on our forecasts. This is slightly above the industry average PER of 31.7x and EV/EBITDA of 12.5x. We note that SAB’s EBITDA margin improved from 16.9% in 2018 to 18.8% in 1Q19, and think that with the aforementioned cost-saving initiatives, the EBITDA margin will likely further improve going forward. Applying a target PER of 33x to our average 2019-20E EPS, we derive our 12-month TP of VND246,700/sh (from VND199,000). With 0.3% upside potential to our new TP, our rating bands call for a Market Perform rating on the stock. Upside risk: stronger-than-expected demand for Sabeco’s beer products; downside risks: higher-than-expected cost of imported malt and hops, and softer-than-expected sales volumes.

At the current price, HSG is trading at 2019 PE, PB and EV/EBITDA metrics of 10.2x, 0.6x and 6.3x respectively. We update our rating for the stock from Underperform to Market Perform, with a 1-year target price of VND 8,300/share based on target PE, PB and EV/EBITDA of 7x, 0.6x and 6.5x respectively. We are of the opinion that the company’s business results may recover in the long term given the company’s willingness to execute cost-cutting measures and others in order to improve the company’s financial health. In addition, we think that domestic competitive pressure can gradually be mitigated in 2020, especially when factoring in that less new capacity is coming online in the domestic market during the next year. However, we still remain concerned about the company’s loss of market share and high interest expenses. We will closely monitor the company’s sales volume and financial health, and provide an update in later reports.

HDBank (HDB: HOSE) posted VND 4 tn in consolidated PBT in 2018, translating into a robust 65.7% growth, having completed its yearly guidance. Upbeat earnings came from higher than industry average gross loans (17.8% YoY compared to roughly 13.9% YoY), higher pure LDR, and roughly flat provision expense growth. Parent bank PBT grew 59.3% YoY to VND 3.25 tn, while HD Saison PBT grew 73% YoY to VND 901 bn. Consolidated NIM slightly compressed due to a lower HD Saison NIM. At VND 31,000 per share, HDB is trading at 2019E PBR metrics of 1.8x, higher than the industry average of 1.5x.