Company Report

In 2018, the total gross premium of the Vietnamese non-life insurance market was estimated at VND 45.7 tn, at +10% YoY. The growth was slightly lower than 2017 results, at +10.61% YoY. Compensation ratio of the sector was 42.6%, higher than the 40.4% level attained in 2017. At the current trading price of VND 38,900 per share, PVI is trading at 2019F PER and PBR of 16.5x and 1.26x respectively, based on the company’s plan. The price is equivalent to 2018 PBR and PER at 1.28x and 16.2x respectively, compared to peers’ averages (excluding BVH) at 1.06x and 21.9x.

CTD recently held its AGM. During the meeting, the vote proposal regarding the merger with Ricons was abruptly withdrawn by the BoD, spurred by Kusto Group’s (Kusto) statement that it intends to vote against the merger. Kusto’s decision was a shocker, and consequently negatively surprised the market. CTD also provided its 2019 guidance during the meeting, with revenue of VND 27tn, (-5.5% YoY) and an NPAT target of VND 1.3 tn, (down -14% YoY). The lower guidance was due to the current state of suspension and delays of several projects.

VGC PBT in 1Q19 arrived at VND 215 bn, posting positive growth of 46 % YoY fueled by the industrial park segment with higher-than-expected growth in new leased area in the first quarter. On the other hand, the profit from construction materials continued to decline by -17% YoY due to intensive competitive pressure in the domestic market that could last for a couple of years. We maintain our revenue and PBT forecast for 2019 at VND 9.953 tn (+10.8% YoY) and VND 929 bn (+10.2% YoY). At the current price, VGC is trading at PE 2019 and 2020 at 14.6x and 13.2x respectively. Our rating for the stock is Outperform, with an unchanged 1-year target of VND 23,400/share.

BCM 2018 consolidated revenue totaled VND 6.508 tn. The gross profit margin reached 48.6%, quite high compared to the average 5 year margin of 27.9%, mainly attributed to a higher IP rental price. The USD rental price offered by BCM fluctuated from $60/sqm to $90/sqm (for 40-50 years), increasing by an approx. 20% clip compared to the average rental price in 2017. The BVPS and EPS of BCM based on 2018 financial statements are estimated at VND 11,395 and VND 2,036. Therefore, at the current price of VND 25,000, the stock is being traded at 2018 P/B and P/E of 2.2x and 12.3x, relatively high compared to peer averages of 1.4x for P/B and 9.5x for P/E.

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.

Management illuminated AGM attendees regarding their Q1 2019 business results, of which TOI is likely to achieve an encouraging growth of 60% YoY. Finally, with the weight of VAMC provisioning off the shoulders of the bank, we think VIB is free to achieve results that leap ahead even of this plan. For the time being, we maintain our estimate for 2019 PBT at VND 3.2 tn (+18.2% YoY). This translates into a 2019 EPS and BVPS of VND 3,288 (+17.4% YoY) and VND 16,982 (+19.6% YoY) respectively. Based on this estimate (at the current price of VND 19,000), VIB currently trades at 1.1x 2019 PBR, lower than the industry peer average of 1.5x, and providing an additional justification towards attraction for this ticker.

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.

Viettel Post (VTP) successfully achieved its ambitious 2018 business plan, growing its top line by 22% YoY and its bottom line by 65% YoY - in line with SSI Research estimates. Breaking up the revenue mix, we find service revenue (delivery service – the main revenue & profit engine) increased by 55% YoY. This is mostly thanks to fast expansion of the e-commerce market, and newfound captured market share.

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.

On Mar 3^rd 2019, Yeah1 Group announced that Youtube had initiated a termination of its respective Content Hosting Agreements (CHSA) after 31^st March 2019. The withdrawal of the license is related to Yeah1 Group’s digital Youtube AdSense related investees/ subsidiaries, including SpringMe (a Youtube MCN based in Thailand), Yeah1 Network Pte. Ltd., and ScaleLab, LLC (a Youtube MCN based in the US).

VNM on 12 March 2019 announced its decision to purchase 46.7% stake in GTN Foods (GTN: HOSE), equivalent to 117 mn shares at a price of VND 13,000/share via tender offer (total value: VND 1.521 tn or $65.4 mn USD). At this offer price, GTN is valued at 2018 P/E of 812.5x and 2018 P/B of 1.22x. We currently have an Underperform recommendation on the stock, with a 1-yr target price of VND 131,500/share, based on a target P/E of 23x.