Company Report

At the current price of VND 87,000, shares of MWG are trading at 2019E and 2020E forward PERs of 10.7x and 8.8x respectively, compared to our 2019E PER estimate of 14.1x for the VN-Index. Taking into account dilution from ESOP, MWG is trading at 2019E and 2020E forward PERs of 10.9x and 9.3x. We derive a 12-month SOTP-derived TP for MWG of VND 148,500/share, offering a 70.7% upside potential to the current price of VND 87,000. We reiterate our BUY rating for MWG.

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.

We maintain our BUY recommendation for PTB, with an upside of 28%. Our unchanged 1Y-target price is VND 83,300 / share using sum of the parts methodology. At a current price of VND64,800 / share, PTB is being traded at 2019F-2020F of 7.1x and 6.2x, which is considered low in our view. In addition, given the 2019 cash dividend worth VND 3,200/share, the current dividend yield is 4.9%, which is high for a growth stock. Our target price using sum of the parts is equivalent to a 2019F PER of 9.6x.

DXG 2018 consolidated revenue totaled VND 4.65 trillion (+61.3% YoY), and net income attributable to parent shareholders reached VND 1.2 trillion (+56.9% YoY), accomplishing 93% and 110.3% of the year’s targets respectively. Our 1Y target price is VND 25,300/share, based on a target PE of 11.0x and PB of 2.0x, considered average metrics in relation to its peers. With a 13.5% upside to the current share price, our rating at present is MARKET PERFORM for the stock.

At the current price of VND 52,800/share, MSH is trading at 2019 and 2020 PER levels of 6.7x and 6.4x respectively. Our 1Y-target price for the stock is VND 59,500/share (+13% upside), based on the unchanged target PER level of 7.5x. Our rating for the stock is OUTPERFORM, as the stock price has increased significantly since our last call (+31% upside from our last call). MSH is still our top pick in the garment sector with solid results, a high dividend yield, and a positive outlook of expanding capacity in 2020.

In 2018, PV Power (POW) generated a total of 21 bn kWh, +2% YoY, on par with SSI Research’s estimate. That leads to revenue increasing by 9.9% YoY, reaching VND 32.6 trillion. Overall, firm-wide ASP increased by 7.7% YoY to VND 1,555/kWh, which is accountable to lower rainfall leading to higher electricity market spot price. We maintain our EV/EBITDA target of 6x for POW. Our 1Y target price is revised up to VND 18,200/share (+11% upside) as we lower forex loss estimate. As upside is now lower, we change our recommendation to OUTPERFORM for POW. In 2019, we see strong earnings growth as the main catalyst for the stock price.

In 2018, PVS posted a slight drop of VND 14.67 tn in revenue (-12.8% YoY), while net profit had a more pronounced decline of VND 549 bn (-29.75% YoY). However, net earnings to parent shareholders reached VND 1.023tn (+27.8% YoY). This was because minority interest incurred a loss of VND 474 bn since its 51% subsidiary PTSC-CGGV incurred a net loss of VND 1.14 tn during 2018. Our 1-year TP for PVS arrives at VND 24,000/share (from VND 20,800/share), anchored on a target P/E of 13x (from 12.5x), equivalent to regional peers and P/B of 1x (17% discount compared to regional peers). Our target price represents a 13% upside from the current market price, triggering an OUTPERFORM recommendation. It should be noted that it is expected that PVS maintains its 10%-12% cash dividend on par in 2018-2019, translating into a dividend yield of 5-6%.

In 2018, TCM posted net sales of VND3.66tn (+14.1% YoY) and net profit of VND260bn (+35.2% YoY). Excluding one-off items relating to one closed-down spinning factory and the provision of doubtful debt for Sears, net core profit would have arrived at VND284bn (+78% YoY). Gross profit margin expanded from 15.7% in 2017 to 18.5% in 2018 thanks to: (i) change in the sales mix towards fabrics and garments, which had higher margins than yarns; (ii) the increase in woven fabrics’ gross margin and (iii) yarn margin turning positive in 2018, from negative in 2017. At the current price of VND29,600/share, TCM is trading at 2019 and 2020 PERs of 7.4x and 6.1x respectively. Our rating for the stock is Market Perform with a 12-month-target price of VND30,700 (+3.7% upside), based on the industry average PER of 7.5x.