Company Report

STK held the AGM today with highlights being the positive results in Q1 2021 and the approval of the Unitex factory and its financing plan. The new factory will benefit the company tremendously in the long-term, where STK can expand sales by 50% from the period 2023-2024 onwards. In the short-term, we keep our estimates for STK that in 2021, net sales and net profit will reach VND 2.39 tn (+35.2% YoY) and VND 250 bn (+74.5% YoY). For 2022, we expect net sales of VND 2.6 tn (+8.7% YoY) and net profit of VND 295 bn (+17.9% YoY). At the current price of VND 33,800/share, STK is trading at 2021 and 2022 P/E of 9.2x and 7.8x. We derive our 1Y TP for STK of VND 34,800/share (+3% upside), using an unchanged target P/E of 9x. We downgrade STK from Outperform to Market perform, as the stock price has increased by 15% since our last call.

Given the weak demand from gas-fired plants in 1Q21, we trim our full-year forecast for dry-gas volume from 9.4bcm to 9.1bcm in 2021E. In contrast, we raise our assumption for fuel-oil prices from USD300/ton to USD330/ton (presently at USD361/ton). Accordingly, we fine-tune down our 2021E net profit by 3%. Our forecasts reveal 18.4% y-y top-line growth and 20.9% y-y growth in NPAT for GAS in 2021E. We trim our 12-month target price for GAS to VND97,500/share (from VND98,000/share), based on an unchanged 2021E PER of 19x, EV/EBITDA of 11x and DCF approach. Our TP implies 12% upside potential from the current market price. We reiterate our Outperform rating on the shares of GAS.

TPB reported respectable 2020 earnings results, with TOI and PBT amounting to VND 10.4 tn (+22.4% YoY) and VND 4.5 tn (at +13.5% YoY), respectively. This was driven by strong credit growth (+30.4% YoY) and NIM improvement (+16 bps YoY). We forecast TPB to achieve a 2021 PBT of VND 5.5 tn, increasing +24.7% YoY due to robust growth in both net interest income and bancassurance. With strong business results recorded in 2020 and ROE improvement expected to continue beyond 2021, we raise our 1Y share price target to VND 32,000 (from VND 28,200) – representing 10% upside potential. We reiterate our OUTPERFORM rating on the shares of TPB. 

After taking a big hit to its bottom line in 2020 due to the acquisition of VCM, MSN’s outlook appears to be significantly improved. For 2021, the group targets between VND92-102tn in revenue (+19-32% YoY) and NPAT of VND2.5-4tn (+103-225 % YoY). We believe that MSN can end up scoring somewhere in the mid-point. We anticipate MCH and TCB to continue to post impressive growth; with VCM’s restructuring exhibiting positive initial results (2020 sales growth of 15%, despite more than 700 store closures). MML’s feed business is expected to rebound while achieving strong growth in meat + farm. MSR should also a benefit from strong rallies in metal prices. As such, we look for the group to post VND97bn in revenue (+25.8% YoY) and VND3.79tn (+207% YoY) in NPATMI, respectively. Of note, in order to finance its acquisition of VCM and TCX, MSN aggressively added leverage to the tune of VND54tn in net debt (+140% YoY) at end-2020. As such, deleveraging progress will be a key focus going forward. According to a corporate release, SK Group will invest USD410mn to acquire a 16.26% stake in VCM. The transaction thus values VCM at USD2.5bn. Prior to the transaction, MSN held an 80.1% economic interest in VCM and would sell a 10% stake in VCM to SK in this deal and receive USD225mn in cash proceeds (SK Group would purchase the remaining 6.3% from a 3rd party). We view this transaction as a positive move for the group as it would help to reduce some debt for the group. At VND93,000/share, MSN shares are trading at a respective 2021E P/E and EV/EBITDA of 28.9x and 12.1x. Our new 12-month target price of VND104,000/share is based on the SOTP method. As our new target price offers 12% upside from the current market price, we maintain our Market Perform rating on the shares of MSN.

ACV recorded 65 mn passengers in their 23 airports, -43% YoY in 2020, with international declining -85% YoY from border restrictions. Pretax profit bottomed out at VND 2.1 tn, -79% YoY. 2021F outlook rests on vaccination progress and vaccine passport application, which are under consideration by the Government at the moment. CAAV expects to resume regular international flights from 4Q2021, which is in line with our expectation. ACV is trading at a forward EV/EBITDA of 15.3x and 12.9x at 2021F and 2022F, respectively. Reiterate OUTPERFORM for the stock, with 2022F target price of VND 84,400/share (14% upside). Any short-term outbreak can present opportunity to accumulate the shares.

Vigorous income growth helped SHB whittle down its bad debt load in 2020. Improvement of both NIM and non-interest income helped TOI to soar 30% YoY to VND 12.2 tn, but PBT grew just 8% YoY to VND 3.3 tn – along the  Bank’s 2020 plan. Provision expenses increased sharply to VND 4.6 tn (+92.5% YoY), while the NPL ratio (including VAMC bonds and legacy debt) dropped from 4.02% (2019) to 3.35% (2020). 2021 earnings projected to surge +70% YoY, reaching VND 5.6 tn. Growth is expected to come from 15% credit growth, NIM expansion of +34 bps, CIR reduction to 34.7%, and a provision reduction of -14% YoY. We raise our 1-year target price to VND 20,100/ share (from VND 18,500/ share), tracking higher EPS (+68% YoY) in 2021 due to the flourishing of profit. With implied upside of 7%, we maintain our MARKET PERFORM rating on the shares of SHB.

We reiterate our OUTPERFORM rating on the shares of GMD, and increase our target price to VND 38,500/share (from VND 30,800/share) – implying 11% upside. Our positive stance on the shares is supported by an improving outlook on Company performance in 2021 and beyond led by Gemalink port trends, hence we revised up our 2021 earnings forecast for GMD by 22% from our last report. From a broader perspective, we observe that a strong recovery in Vietnamese trade is well underway, which support GMD’s seaport and logistic businesses. Being one of the few logistic providers in Vietnam that possesses a fully integrated logistics network nationwide, GMD should benefit from a rapidly growing Vietnamese economy that is increasingly integrating into global manufacturing and supply chain. 

VTP is trading at a 2021F and 2022F P/E of 20x and 16x, respectively, which are low compared to the regional average of 25x. We think Vietnam’s delivery market remains attractive over the long-term, as the 5-year growth rate is expected to reach between 20%-25% YoY according to a Google-Temasek report. As such, we maintain our target P/E of 20x for VTP and arrive at a 1Y target price of 94,500/share (3% upside) - down 25% from our previous TP of VND 126K/share. We cut our rating on the shares of VTP to MARKET PERFORM from OUTPERFORM, as we expect 1H 2021 growth to decelerate off of a high base (VTP reduced its pricing scheme from 2H 2020). The stock might underperform the market in the short-term (3-6 months). We see near-term volatility in the shares as an opportunity for accumulation, however, as the stock remains as our favorite long-term play in Vietnam e-commerce fast growing outlook, and we expect double-digit growth might come back from 2022 forward.

Dabaco held its analyst meeting recently to update about its impressive 2020 results, as well as providing details for the business plan in 2021. Overall, we had some positive takeaways from the meeting. Fruitful results in 2020 represented the Group’s long-term strategy to invest in its core business and expand the farming capacity and sow herd, even during difficult years in 2016-2018. DBC plans to expand aggressively in terms of sales volume in 2021 by raising the utilization rate of its current factory, as well as contract farming. A high and stable hog price is expected in 2021, which will still support its core business tremendously. In the period 2022-2023, new breeding and farming projects are in the pipeline, which will help expand the scale even further. With its currently strong financial position, the Group is at an advantage to exploit its HORECA and real estate segments to earn extraordinary profits in 2021, very likely to exceed management’s prudent net profit plan for the year. In 2021, we estimate net revenue and net profit to reach VND 11.9 tn (+18.9% YoY) and VND 980 bn (-30% YoY) respectively. At the current price of VND 60,900/share, DBC is being traded at 2021F P/E of 6.9x and EV/EBITDA of 5.1x, which is lower than peers’ average P/E of 10x and EV/EBITDA of 6x. We applied an unchanged target P/E of 8x to 2021F EPS of VND 8,797, to arrive at a 1Y-target price of VND 70,400/share (15.6% upside). As such, our rating for the stock is OUTPERFORM. 

We raise our PBT forecast to VND 3.5 tn (+39.2% YoY), driven by credit growth of 22.9% YoY, NIM improvement of +10 bps YoY to 3.47%, and 15.3% YoY growth in non-interest income. The bank has sold all of its 56 mn MBB shares, recording VND 400 bn of relevant gain in 1Q2021. We assume that the bank will book ~VND 600 bn of upfront fees in 2021, CIR to decrease further to 49.5%, and provisions to increase +5.5% at the bank while the NPL ratio declines to 1.7% and LLC increases to 93%. At VND 21,900 per share, MSB is trading at a 2021F P/E and P/B of 9.2x and 1.3x, respectively. Given that profitability and asset quality are both improving, we increase our targeted P/B ratio from 1.1x to 1.4x, which brings our 1Y target price to VND 23,500 per share (from VND 19,714 per share after dilution). With implied upside of just 7.3%, we lower our recommendation on the shares of MSB from Outperform to Market Perform. 

For 2021, we adjust our input cost assumptions with raw milk and sugar prices to advance 12% and 25% YoY, respectively (vs. +4% and +5% previously). Accordingly, we calculate that VNM’s NPAT will arrive at VND11.5tn (+2.5% YoY), which is lower than our previous forecast of VND12.1tn. Between 2020-24, we forecast net profit CAGR to also be lower, at 5% vs. our previous estimate of 6.9%. As such, our 12-month target price for VNM, based on P/E and DCF methods, is reduced by 7.6% to VND121,000/share (from VND131,000/share). We do, however, maintain our Outperform rating on the shares of VNM given the 18% potential upside. 

We reiterate Outperform rating on the shares of QNS with a new target price of VND 50,600/share (from VND 41,800/share) or 19% upside from the current market price.  We are of the opinion that QNS financial results will turn around in 2021, led by the sugar business. Taking a broader view, we see that the implementation of the anti-dumping tax on Thai sugar will help protect domestic sugar from cheap imported sugar, as well as smuggled sugar and boost domestic sugar industry in the long-term for the food security purpose. Should the anti-dumping tax be officially imposed (now it is just temporarily in place, for a 120 day period), this would be a gamechanger for the Vietnamese sugar industry, and QNS as the second largest one will be amongst the top beneficiaries. Strong sugar price recovery and volume growth should help spur sugar and biomass performance this year, from a loss (-35 bn) in 2020 to a PBT of c.300 bn VND in 2021. Overall, we look for 24% NPAT growth for the company in 2021. 

BID’s AGM was held on 12 March 2021, putting forward an optimistic PBT target for 2021 of VND13tn (+44% YoY). It also proposed a stock dividend equivalent to 12.2% for 2019 and 2020. We estimate BID’s 2021 PBT at VND13.5tn (+49.4% YoY), based on respective credit and deposit growth of 10% and 12% YoY, respectively, as well as a well-contained NPL ratio of 1.6%. Although earnings may surge in 2021, the possibility of growth beyond 2021 depends on the ability to raise capital and it will be the key upside catalyst for the stock. We reiterate our 12-month target price of VND46,430/share, which represents 7% upside. We maintain our Market Perform rating on BID.