Company Report

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.

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.