Company Report

At the current price of VND 58,100, PHR is being traded at 2019-2020 PER levels of 10x and 10.6x (including one-off income), but displays a 2019-2020 PER of 17.6x on core activities, which we believe to be expensive. However, due to uncertainty on value and timing, our valuation does not take into account the valuation of Tan Binh Phase II (1,055 ha), nor the benefit of gradually transferring itself from a pure commodities oriented firm to one which sells land to industrial park developers to capture the booming trend of industrial park development. Nevertheless, we maintain our recommendation to TAKE PROFIT for the time being.

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.

At the current price of VND 50,700, shares of FRT are trading at 2019 and 2020 forward PER levels of 8.7x and 8.5x respectively. This is compared to our estimate of industry incumbent leader MWG at 10.6x 2019F PE, coupled with a projected 2019E PE of 14.1x for the VN-Index. We apply a target PER of 10x (down from 12x due to slower growth of ICT segment and low liquidity of the stock) for FRT to arrive at a price of VND 58,330/share, a 15% upside. Therefore, we reiterate a MARKET PERFORM rating for the stock in 2019.

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.

1Q19 net sales reached VND 1.574 tn (-24.5% YoY), accomplishing 18.5% of the 2019 target. The gross profit margin shrunk notably from 22.3% in 1Q18 to 17.1% in 1Q19 this year, due to 14% YoY rise in gas input cost, and from the low utilization of urea, NPK, and NH3 plants. The data marks the lowest GPM the company has experienced since 2015. At the current price of VND 18,550 per share, DPM is trading at 2019E PER of 19.5x on 2019E earnings, which would be hit by (1) the decline in sales volume of urea, NH3 and NPK and (2) the increase in transportation tariffs. With equal weight assigned to PER, PBR, and EV/EBITDA multiples of 9.5x, 1x and 5x (unchanged) on our 2019 forecasts, our TP remains unchanged at VND 17,600 per share. We maintain our UNDERPERFORM rating.

At the current price of VND 23,900/share, TPB is trading at 2019F& 2020F PBRs of 1.55x and 1.24x respectively. The bank’s 2019F PBR is equal to the sector average of 1.5x. Using the average of 2019F & 2020F BVPS, the 1Y target price would then be VND 27,800 per share, which is equivalent to a dynamic upside of 16.3% from the current price. Therefore, we hold an OUTPERFORM recommendation on the stock.

PVS has released its financial results for Q1, and in short, it’s a stunner. While net sales totaled a respectable VND 4.09 tn (+22.8% YoY), net profit exploded, posting a remarkable VND 385 bn (+103.7% YoY). Net earnings to parent shareholders was also quite welcome news, reaching VND 369 bn (+45.8% YoY). Although we have expected strong profit growth for Q1, results exceeded even our own estimates. Our 1-year target price for PVS arrives at VND 27,000/share (from VND 24,000/share) based on an unchanged target P/E of 13x and P/B of 1x. With an 7% upside from the current market price, we reiterate our Outperform rating for the stock.

At the current price of VND 23,250, PC1 is traded at PE 2019F of 8.0x and 2020F of 6.1x. For 2019 results, we think that the company is traded at a reasonable PE compared to its historical PE. However, given the expectation of a strong growth of NPAT in 2020 at 31.6% YoY, the stock is traded at an undervalued price. We apply a PE of 8x to average 2019 and 2020 EPS of VND 3,345 to arrive at a 1-year target price of VND 26,760, a 15% upside. Therefore, we issue an Outperform rating for PC1 in 2019.

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.