Company Report

DPM’s revenue increased notably to VND 9.395 tn (+16% YoY), surpassing its 3.8% revised guidance provided in December 2018. Net income arrived at VND 712 bn (-20% YoY, based on the post-audit financials of 2017), accounting for 115% of the 2018 revised target. At the current price of VND 17,550 per share, DPM is trading at 2019E PER of 18.5x on our revised 2019 earnings. These revisions were influenced by (1) the decline in sales volume of urea, NH3 and NPK and (2) increase in transportation tariffs. With equal weight assigned to PER, PBR and EV/EBITDA multiples of 9.5x, 1x and 5x (unchanged), respectively on our revised 2019 forecasts, we arrive at a new TP of VND 17,600 per share (from VND 21,700), and downgrade our rating to UNDERPERFORM (from Neutral).

Net sales increased by 16.4% YoY to VND 15.298 tn in 2018 (a bit lower compared to the growth of 21.1% YoY in 2017), accomplishing most of the 2018 plan at 95.5%. At the end of 2018, FRT had acquired a 19.2% market share of mobile phones (vs. 18.2% in 2017, 10.7% in 2014), and a 25% market share of laptops (vs. 18.5% in 2017, 13.3% in 2014) in terms of sales value. Since 2015, FRT has maintained its position as the second biggest retailer in mobile phones (only trailing MWG, whose market share is 45% in 2018), and has reaffirmed its position as the biggest laptop retailer. Taking into account only phones, GFK estimated that the general market in 2018 had grown by merely 1% YoY, much lower than previous double-digit growth from recent years.

For 2019, AAA set revenue and net profit targets at VND 10 trillion and VND 510 bn, equivalent to a stellar growth outlook of 25% and 140% YoY. At the current price, AAA is trading at a 2019 PER forward of 7x. This multiple is reached given the assumption that AAA would accomplish its 2019 profit guidance. Excluding the profit from industrial park lease, 2019 PER then would be 11x.

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.

At the current price of VND 41,000/share, HVN is trading at TTM core lease-adjusted EV/EBITDAR metrics of 6.7x (vs. VJC: 7.9x) and current P/B ratio of 2.6x (vs. VJC: 4.3x and Asian full service airline peers: 1.5x)

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.

At the current price of VND 18,650/share, HBC is trading at 2019F PER levels of 6.1x, which is considered fair in our view. HBC is trading at lower PER than the average ASEAN peers’ PER level of 8.0x, yet at (1) a higher D/E, (2) a higher DRO and (3) a 2019-2020F core NPAT CAGR of only 3.5%.