Company Report

PNJ shares are now trading at VND 64,000 per share, equivalent to a 2020F P/E of 14.7x, lower than the median 2020E P/E of regional peers of 17.2x. With the target P/E remaining at 13x and projected EPS rolled over to the TTM ending at the June 2021 period, our target price for the share stands at VND 69,500 per share (+8.6% upside). Hence, we downgrade our recommendation for PNJ from BUY to Market Perform. 

We revise down our forecast for CTG earnings to VND 9.22 tn, at -21.7% YoY to reflect more comprehensively the impact of Covid-19. For 2021, we expect CTG to achieve VND 13.42 tn of PBT, at +45.5% YoY. 2020E and 2021E ROAE is projected at 9.4% and 12.8% respectively.  At the current price of VND 23,050 per share, the stock is trading at a 2020E and 2021E P/B ratios of 1.06x and 0.98x respectively. Our 1Y target price of CTG is VND 27,200 per share. As the potential upside is +18.0%, we maintain our OUTPERFORM rating on this stock. 

We revise down our forecast for 2020 PBT to VND 13.4 tn (+4.5% YoY), a decline of -5.8% compared to the previous forecast of VND 14.23 tn. For 2021, we forecast the bank will post VND 15.22 tn of PBT, at +13.5% YoY. 2020E and 2021E ROAE is projected at 15.7% and 15.3% respectively. At the current price, TCB is trading at 2020E and 2021E P/B ratios of 1.07x and 0.91x respectively. Our 1Y target price is VND 24,600 per share, which is equivalent to an upside of +11.8% from the current price. Therefore, we revise down our rating on TCB from Outperform to MARKET PERFORM.

For 2020, we expect net sales of VND 8.357 tn (+6.2% YoY) and net profit of VND 922.6 bn (-21.8% YoY). Our assumptions are more prudent than the Company’s plans, as we remain concerned about price recovery prospects in the US as well as demand for collagen & gelatin given a weaker appetite for consumption of non-necessity products. For 2021, we expect net sales of VND 8.887 tn (+6.3% YoY) and net profit of VND 946.5 bn (+2.6% YoY). We maintain our Market Perform rating for VHC share with a new target price of VND 36,100 per share (+5.9% upside), using a target P/E ratio of 7.5x and an average EPS 2020-2021 of VND 4,812.

In 2020, we expect company revenue to reduce by -7.1% YoY, reaching VND 695 bn, and NPAT to reach VND 438 bn, - 12.8% YoY. In 2021, we expect SCS revenue to increase by 14% YoY to VND 792 bn, and NPAT to grow by 20.6% YoY to VND 528 bn. At the current market price, SCS is trading at 2020F and 2021F P/E ratio of 13.7x and 11.3x respectively, which is in the lower range of its historical band (10-18x). In the short-term, 2Q2020 might be the lowest quarter as explained above. In the long-term, we think SCS is a safe investment case, complete with a net cash position, operation in a growing duopoly market, and paying a dividend yield of 7% at the current market price. We initate an OUTPERFORM rating for SCS, with a 1Y target price of VND 129,500/share (upside of 15%) based on a DCF model with a WACC of 14.89%, and a terminal growth rate of 3% (including 2% of long-term inflation and 1% of real growth rate).

We forecast net revenue to reach VND 35.1 tn (+25.6% YoY) on the back of a +23% YoY growth in beer sales volumes and a +2% rise in ASP. We forecast net income to reach VND 5.01 tn (+17.9% YoY). At the current price of VND 172,200/share, SAB is trading at a 2020E P/E of 28.8x and 2021E P/E of 24.5x, which is at a discount to its relatively high average historical P/E levels of over 30x. We raise our 1Y target price for the stock to VND 191,000 (+11% upside) based on a target P/E of 30x, which is -7% lower than the average industry PE of 32x. Given the above upside, we recommend a Market Perform rating for SAB (from Outperform). Upside surprise potential: Stronger-than-expected demand for Sabeco beer products; Downside risks: Softer-than-expected sales volumes; lower-than-expected consumer confidence.

On a consolidated basis, our revised 1-year target price for the VPB stock is VND 25,020. As our target price offers +9.7% upside potential from current levels, we therefore reiterate our Market Perform rating. The key upside surprise to our call outside our immediate expectations would be an earlier-than-expected containment of Covid-19 (before the end of Q2 both within Vietnam and at least regionally), and a better recovery rate in relation to restructured loans. The key downside risk to our call would be a prolonged pandemic situation, which would trend down our estimates potentially lower than the aforementioned forecasts.

We estimate VNM to post VND61.55tn in revenue (+9.3% YoY) and net profit of VND11.36tn (+7.6% YoY). Factoring in the forecast revisions, we raise our 1-yr target price for VNM to VND 116,000/share (from VND 108,000/share), based on a bended 2020F target P/E of 21x (25% discount to regional peers) and DCF methodology (with an increased WACC on higher equity risk premium for Vietnam). As our target price represents 14% upside potential from current market price, we upgrade VNM from Market Perform to Outperform. Downside risks to our call: higher-than-expected raw material prices and lower-than-expected sales growth.

For 2020, we expect that ACB would report VND 7.921 tn in pretax profit, up by +5.4% YoY, with the main changes in assumptions being slower credit growth (10%), a NIM contraction by 18 bps, stagnant fee growth, modest write-back income, and soaring provision expenses (+231% YoY). This estimate has not taken into account the possible bancassurance upfront fee, which might be realized in 2H2020. For 2021 under our base case, we expect a strong bounce back in the bottom line for ACB to 19.5% YoY. Our target price for ACB is VND 25,300. Given an upside potential of 19% from the current market price, our rating for the stock is OUTPERFORM. ACB is currently our top call in the banking sector given the bank’s prudent lending practice, featuring a strong customer base of high quality. These features would help ACB performance to be more resilient during an economic downturn than that of other banks.

We remain positive in our view toward NLG, with a revised target price of VND 33,400/ share by RNAV method (+49% upside), and with a FY2020 P/E of 6.0x.  This target price is 13% lower than the target price in our previous report dated 25 Feb 2020, as we have updated our estimates, and apply a discount rate to reflect uncertainty of cashflow in the future.

On our higher earnings base and target P/E (from 14.5x to 16x) and an EV/EBITDA multiple of 9x (equivalent to regional peers) using 2020E as our valuation basis, we boost our 12-month target price of GAS to VND71,000/share (from VND64,500/share). As our target price offers 3.5% upside potential from current levels, we therefore we reiterate our Market Perform rating. The key upside risks to our call would be higher fuel-oil prices and unpredictable one-off profit events that would serve to boost GAS’s earnings. The key downside risk to our call would be lower dry gas volume, lower fuel-oil prices and unpredictable one-off expenses.

At the current market price of VND 15,500/share, PLC is traded at 2020/2021 P/E of 10.3x and 6.2x based on our estimate. We arrive at 1-yr target price for PLC at VND 18,600/share using H2 2020 - H1 2021 EPS and applying an 8x P/E multiple (equivalent to PLC average P/E in 2014-2019) and the DCF approach. It should be noted that as PLC has almost completed its investment in future production output capacity for both lubricants and the asphalt businesses, we expect no high capex in the coming years. Traditionally, the pay- out ratio is high (above 80%). 2019 dividend yield is at 8.8% based on the current market price (ex-right date is normally in June). As our target price represents 20% upside from current market price, we recommend to Overweight the stock at current market price.

As a result of this agreement, we revise our respective 2020E net sales and pretax profit to VND7,922bn (+3.1% YoY; from VND9,643bn) and VND870bn (+86% YoY, from VND578bn). Since September 2019, DPM’s share price has rallied by 11% despite weak market sentiment. At the current price of VND14,850/share, DPM trades at a 2020E PER of 10x, compared with its 2018-19 PER range of 15.1-16.2x. Despite unfavorable weather conditions this year, DPM will likely post a strong bottom line growth thanks to (1) a higher utilization rate of all plants compared to the low base last year, (2) less intense competition and (3) shallow gas input costs. In addition, DPM’s high cash position (net cash per share of VND7,081 as of 4Q19) and a decent dividend yield (10% on par value; effectively a 7% dividend yield) may attract investors during the weak market sentiment caused by COVID-19. Nevertheless, due to the adverse impact from the drought in the Mekong Delta, we lower our target PER, PBR, and EV/EBITDA multiples to 8x, 0.7x and 3.5x (from 9x, 0.8x, and 4.5x), respectively. With an equal weighting assigned to each valuation method and using our revised earnings for 2020E (from average 2019-20E), we derive our new 12-month TP of VND16,900/share (from VND15,500), which implies 14% upside potential. We thus maintain our OUTPERFORM rating. 

The 2020 AGM has approved the target of sales and pretax earnings of VND 8.3 tn (-2.6% YoY) and VND 765 bn (-50% YoY). 1Q20 reported sales amounted to VND 2.2 tn (30.7% YoY). And the reported NPAT recorded VND 135 bn (-44.3% YoY). If excluding the claim of FX loss in 1Q19, NPAT only descended by -11.8% YoY. With the closing price as of 17-Apr-2020, PPC is trading at a FY20 EV/EBITDA of 5.3x. Given the current price, PPC offers a FY20 dividend yield of 8.4% (based on a FY20 dividend of 20% par) vs. the regional average of 5.9%. At the end of FY20, net cash per share is estimated at VND 3,700/share, still quite affordable for the FY20 dividend payment thanks to being debt-free and possessing a stable cashflow. In the long term, the dividend payment might be lower because of saving up cash for capex in Pha Lai 3. We call for a MARKET PERFORM recommendation for PPC, with a 1Y target price of VND27,600/share, implying an upside of 16% vs. the closing price as of 17-Apr-2020.   

The company held its online AGM on 08-Apr-2020 via Cisco’s Webex platform. The 2020 approved guidance for sales and PBT were VND 32.45 tn (+17.1% YoY) & VND 5.51 tn (+18.1% YoY) respectively. However, the FY20 guidance targets had been set before the black swan outbreak of Covid-19 and it is necessary to have them re-adjusted by the BOD. Within our base case, we estimate VND 29.9 tn for total net sales (+8% YoY) and VND 5.1 tn (+8.7% YoY) for pretax earnings, implying a FY20 EPS growth of 8.2% YoY. Growth from outsourcing, for sales and PBT, is forecasted to ease back to a 14.3% YoY expansion rate in comparison with the previous projection of 25%-28% YoY. The escalated tension due to the pandemic in FPT’s overseas markets casts a shadow upon our expectation over the global IT spending budget in the short term - especially in Japan. In the long term though, we still believe that corporations overall would still spend on IT services and digitalization to improve their operating efficiency. For our base case, FY20 EPS growth is estimated to be 8.2%. According to the closing price as of April 8th, FPT traded at a FY20 P/E of 9.4x in comparison to a regional average of 20x. We reiterate our BUY recommendation, with a new target price of VND 64,000, offering a 37% upside potential. Our new target price was revised downwards by 10% vs. the previous target of VND 71,300 to factor in the impact of Covid-19.