Company Report

VEA recorded VND 2.391 tn in net sales (+0.1% YoY and +81.5 % QoQ) in Q4. This sales figure is higher than our expectation, due to VEA having accomplished the bulk sale of more than 1.7k trucks at the end of December 2018. The stock price has increased by 29% since our last call on 7^th Jan, thanks to its impressive earnings for Q4 2018. At the current price of VND 49,000, VEA is trading at 2019 PER of 8.1x and its dividend yield is expected at 7.14%.

In 2018, MPC achieved $750.7 mn USD in export turnover, up 7% YoY and fulfilling 94% of its target plan. Lower export turnover results than plan was due to a lackluster in demand from traditional markets such as (i) the US and Canada due to snowstorms and (ii) a high inventory level in Japan and South Korea. This coupled with increasing supply from major shrimp exporting countries such as India, Thailand and Ecuador made it difficult for Vietnamese seafood exporters in 2018. At the current price of VND 47,200 per share, MPC is trading at 2018 PER of 6.1x and 2019 PER of 3.5x, comparable with the industry peer average of 6.0-6.3x in 2018.

2018 revenue for Q4 arrived at VND 2.317 tn, a slight growth of 4% YoY on the back of a 5%YoY increase in sales volume. Compared to the market, HT1 market share in the domestic market continued to improve to 10.6% in Q4, stepping up from 10.3% in Q3 and a further rise from 8.6% in Q2. The market share in the southern market also improved to 31% in Q4, a steady rise from 29% in Q3 and 27% in Q2. At the current price, HT1 is trading at 2019 PER and EV/EBITDA of 8.7x and 5.0x respectively, which is quite fair in our view. We change our rating for the stock from BUY to Neutral with one-year target price of VND 16,700 based on consistent PE and EV/EBITDA target of 8x and 6x respectively.

The company recorded VND 1.318 tn in net sales (-11.3% YoY), but ramped up to VND 1.848 tn in terms of net income (+26.8% YoY) in Q3. Such a strong result was contributed by great earnings for the company’s joint ventures. For Q3, JV-sourced income for the company amounted to VND 1.799 tn (+28.5% YoY), in which contribution from HVN might total as high as VND 1.559 tn (~ 86.7% of total JV-related income). Meanwhile, TMV and FVL might only make up 10.8% and 2.56% of total income from JVs. Given our forecasts on its 3 JVs, we apply SOTP methodology to value the company, and the average regional PER at current is lower than that of the previous report. Hence, we applied a lower PER targets in this report. As a result, our SOTP-based 12-month target price is VND 43,700, equivalent to a 2019 PER of 8.0x. Given a 17.2% upside, we provide our rating of OUTPERFORM for the stock. VEA expects that the divestment by the Government will be implemented in 2019 to lower state ownership to 51% from 88.47%, while the HOSE listing will be slower than investor expectations, as VEA needs to wait for its audited 2018 financial statement.