Company Report

We raise our 12-month target price to VND81,300, based on an unchanged PBR target of 3.0x applied to our 2020E BVPS (previously VND68,600 using 2019E BVPS), for a potential upside of 8.4% from the current price of VND75,000. Please note that this does not consider the cash dividend of 8% at par in 2019 and 2020 that we had previously assumed. Given the reduced potential upside, we downgrade our rating from Buy to Market Perform.

We revised upwards our forecast for ACB 2019 PBT to VND 7.58 tn, at +18.7% YoY and +2.9%, elevated compared to our previous forecast of VND 7.37 tn. This raised outlook comes from higher forecasts of credit growth from the previous 13% YoY to 16.5% YoY. For 2020, we expect ACB to earn VND 8.79 tn of PBT at +16% YoY, given credit and deposit growing by 16% YoY and 15% YoY respectively. Using average BVPS of 2019F & 2020F and the target PBR of 1.8x, we arrive at a 1Y target price of VND 44,000 per share, which is equivalent to a dynamic upside of 46.2% from the current price. Therefore, we reiterate our BUY recommendation on the stock.

At the moment, GMD is trading at 2019F and 2020F forward PER metrics of 14.7x and 13.2x respectively, which is slightly lower than GMD’s historical PE range of 14-15x. 2019F and 2020F P/B ratio are estimated at 1.35x and 1.32x respectively. We are waiting for the mid-year report to be released, of which will spur an update from us, and might spark a revision of our forecast accordingly.

Based on audited financial statements, 2018 BVPS and EPS of BVH were VND 22,065 and VND 1,612 respectively. At the current price of VND 81,300 per share, the stock is trading at 2018 PBR and PER of 3.7x and 50.4x respectively. Based on the company’s 2019 plan, 2019 BVPS and EPS of BVH on a respective basis are estimated at VND 22,748 and VND 1,676, with current PBR and PER at 3.57x and 48.5x. We estimate that if the capital issuance is implemented in 2H 2019, at the price equal to 3 times BVPS as of June 2019 at VND67,220 per share, BVH would have the proceeds of VND 2.785 tn. 2019F BVPS would pop up at +11% to VND 25,231. The PBR at current price would then be 3.22x.

At the current price, VGC is trading at 2019 PER of 13.6x. Our rating for the stock is Outperform, with a 1 year target price of VND 23,600/share, imlying an upside of 16% from the current price. We think that encouraging earnings growth in 2019, as well as the government divestment, would together be supportive catalysts for the stock in the next 12 months. Used to be mainly regarded as a construction material manufacturer, VGC should be rather viewed as a property developer in the next 12 months given the tremendous growth of the industrial park segment and the expected contribution of around 60% of consolidated PBT in 2019.

YTD (January 1st – May 19th 2019), tapped volume and purchased volume reached 3,055 tons (-7% YoY) and 4,030 tons (+22% YoY) respectively. The TOCOM rubber price surged from JPY 175/kg to JPY 239/kg despite weak demand from China on the back of the US-China trade war. The uptrend was particularly intense in May (from JPY 189/kg to JPY 239/kg) due to a temporary shortage of natural rubber.

For 5M19, revenue rose by 15.4% YoY (vs. 43% YoY for 5M18) to reach VND42.784tn, achieving 39.4% of the company’s annual plan. This was mainly due to growth in the Dienmayxanh and Bachhoaxanh chains. Net margins reached their highest level since the start of 2017, at 4.2% in 5M19, above the 3.5% level achieved in the same period last year, and the 3.3% for 2018. As such, 5M19 net income attributable to shareholders jumped by 39.0% YoY to c.VND1.792tn (vs. +43.9% YoY for 5M18), reaching 50.2% of the annual plan. At the current price of VND91,400, shares of MWG are trading at 2019E and 2020E PERs of 10.3x and 8.4x, respectively, which compares to SSI’s year-end target 2019E PER of 14.5x for the VN-Index. Following the upward revision to our earnings, we lift our SOTP-based 12-month TP for MWG to VND160,300/share (previously VND148,500). As our new TP offers some 75% upside potential, we reiterate our BUY rating on MWG. The key downside risk to our call would be fiercer-than-expected competition in the grocery business.

We maintain our 1Y-TP for ACV at VND 95,200/share (10% upside), based on a target EV/EBITDA of 16x (15% premium compared with the global average). Given the limited potential upside to current market price, our rating is Neutral. We will give further updates in our upcoming 2Q19 earnings report.

For 1Q19, VNM reported VND13.19tn in revenue (+8.8% YoY) and VND2.797tn in net profit (+4.3% YoY). The rise in revenue was triggered by 10.3% YoY growth in domestic sales, while export sales grew by only 7.9% YoY. At the current price of VND125,500/share, VNM shares are trading at a 2019E PER of 22.7x, an EV/EBITDA of 14.1x, a 2020E PER of 21.1x, and an EV/EBITDA of 13.1x, respectively, which are not expensive yet not attractive enough (given our low-single-digit growth outlook), in our view. On the heels of our earnings revisions, we lower our 12-month target price for VNM to VND127,000 (previously VND 131,500) based on an unchanged target P/E of 23x applied to our 2019E EPS. We see no strong catalysts that would trigger an upgrade of our call in the short-term. As our new TP offers only 1% upside potential, and is lower than SSI’s overall market expected return from now until end-2019 of 6.8%, we reiterate our Underperform rating.

We have updated our earnings forecast for 2019F/2020F after adjusting margin assumptions for the M&C segment and earnings from associated JVs. Accordingly, we forecast PVS to post VND 16.37 tn in net revenue (+11.6% YoY) and VND 1.176 tn in net profit (+114.2% YoY) in 2019, which does not significantly vary from our previous estimates. For 2020, we forecast a net sales and net profit growth of 14.6% YoY and 19.2% YoY respectively. 2019-2023 net earnings CAGR is estimated at 12.3%, thanks to a potential backlog amounting to approx. $2.5 bn USD amounted during the period. At the current market price of VND 23,200/share, PVS is traded at 2019P/E and 2020P/E of 10.9x and 9.3x respectively, which are lower than regional peer P/E equivalents of 13x. We maintain our 1-year target price of VND 27,000/share based on an unchanged target P/E of 13x and P/B of 1x, and reiterate an Outperform rating on the ticker for the time being.

At its current price, AAA is trading at a 2019 PE forward level of 7.8x. We estimate the fair price of AAA based on the Sum-of-the-parts method. Accordingly, the separate fair value for the An Phat Hi-tech IP is at VND 1.2 tn, equivalent to VND 7,200/share based on the Rnav method with a cap rate of 10%. Total net profit from this project from 2019-2021 is estimated at VND 443 bn. On the other hand, the fair value of other segments are estimated at VND 12,900/share, based on a target PE of 9x. Accordingly, our 1-year target price for AAA is VND 20,100/share, equivalent to an upside potential of 12.6% from the current price. Our rating for the stock is Outperform.

We maintain our previous forecast, and view PTB as one of the few listed companies which benefits from the expansion of the US-China trade war. PTB’s furniture segment profits directly from the current tension, which is reflected in increasing orders from existing US clients such as Walmart, as well as new clients such as Masterbrand. PTB exports to the US accounted for only 25% of total furniture revenue in 2017, raised to 40% in 2018, and is expected to bring in over 50% of revenue in 2019. We feel justified in maintaining our BUY recommendation for PTB, with an upside of 27%. Our unchanged 1Y-target price is VND 80,100 / share (adj. for cash dividend: VND 3,200 / share). Our TP is based on the SOTP-Method, and is equivalent to either a 2019F PER of 9.6x or a 2019F EV/EBITDA 4.9x, both of which is considered low in our view.

FPT released its 4M19 results, which were mostly within our general expectations. Net sales and pretax profit recorded YoY growth of 19.4% and 22.8%, respectively. For performance in further detail, software outsourcing revenue and PBT were ahead of our forecasts, whereas telecom services were in line with our expectations, while distribution and retail fell short of our estimates. At the current price of VND44,850/share, FPT shares are trading at a 2019E PER of 10.8x. We reiterate our BUY rating on FPT, with a new SOTP-based 12-month target price of VND55,800 (+24% upside potential) (previous VND63,000). The change in our TP takes into account FPT’s recent stock dividend payout of 10%. FPT remains one of the more attractive growth stocks in our universe, and features a compelling valuation, in our view. However, we note that as FPT’s foreign ownership allocation is full, foreign institutions will likely have to pay a premium to purchase the stock.