Company Report

Company Report
POW VN_Company Update_Strong earnings growth in the field of view_20190313

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.

13/03/2019

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VJC VN_Company Update_Strong international expansions drives core business up_20190312

VJC recently held their FY2018 analyst meeting, and the following are the key takeaways. We use parent company results for comparison, which purely reflects performance of the core aviation business. At the current price of VND 120,500/share, VJC is trading at 2019F-2020F core lease-adjusted EV/EBITDAR metrics of 7.9x and 6.7x respectively. We also want to mention that a flat consolidated 2019 NPAT growth of 2.9% YoY might negatively affect retail investor sentiment.

12/03/2019

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VEA VN_Company Update_Upbeat results thanks to much better than expected performance of HVN_20190312

VEA recorded VND 2.391 tn in net sales (+0.1% YoY and +81.5 % QoQ) in Q4. This sales figure is higher than our expectation, due to VEA having accomplished the bulk sale of more than 1.7k trucks at the end of December 2018. The stock price has increased by 29% since our last call on 7th Jan, thanks to its impressive earnings for Q4 2018. At the current price of VND 49,000, VEA is trading at 2019 PER of 8.1x and its dividend yield is expected at 7.14%.

12/03/2019

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VGC VN_Company Update_Potential recovery in 2019 earnings from 2018 low base_20190312

2018 PBT declined by 7.7% YoY due to the deterioration in construction materials, whereas the property segment attained strong growth with PBT increasing by 37% YoY. In 2019, VGC’s 2019 revenue and profit are expected to reach VND 9.953 tn (+10.8% YoY) and VND 928 bn (+9.3% YoY) in 2019, which is driven by the the growth momentum of industry park segment and the rebound in construction materials. At the current price, VGC is trading at 2019 PE metrics of 13.2x, which in our view is not very compelling for financial investors. However, the full state divestment in particular may still support the stock price in the coming year ahead. Our rating for the stock is Market Perform, with a 1-year target of VND 23,400/share based on SoTP method.

12/03/2019

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PVS VN_Company Update_Bright long-term outlook on huge offshore backlogs_20190311

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%.

11/03/2019

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ACV VN_Company Update_Waiting for decision on runway ownership_20190306

ACV’s 2018 consolidated revenue (ex-landing charges) reached VND 16.136 tn, up 16.3% YoY driven by (1) a 7% YoY increase in passenger traffic as well as (2) a 28% YoY rise in average domestic passenger charges. Further, NPAT reached VND 6.215 tn, up 51% YoY thanks to (1) GPM expansion and (2) high net financial income. At the current price of VND 88,600/share, ACV is trading at a 2019-2020F EV/EBITDA (ex-landing charges) of 14x and 12.7x, respectively, which is in-line with the average for global airports.

06/03/2019

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VIB VN_Company Update_Steady growth ahead_20190305
VIB’s pretax profit in 4Q 2018 reached VND 1 tn (+130.6% YoY), lower than its PBT growth rate of 170.9% YoY in 9M 2018 due to strong performance in 4Q 2017. In all 2018, VIB reported its pretax profit to grow 95.2% YoY in 2018 to VND 2.74 tn. At the current trading price of VND 18,500, the stock is trading at 2019F PBR of 1.1x, which is below the industry peer average of 1.4 – 1.5x.

05/03/2019

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VSC VN_Company Update_Fair valuation, with rough year ahead_20190305
In 2018, VSC recorded impressive results compared to last year, with top line growth of 30% YoY and bottom line growth of 34% YoY. This is better than our SSI Research bottom line growth estimate of 28% YoY. At the current market price, VSC is trading at PE 2019 of 9x, which is also our target PE for VSC for the time being. The lack of growth prospects in the coming time is the reason for such a low PE. Since our last call, the VSC share price has increased and reached our target price as of present. Thus, we recommend a Market Perform rating for VSC for the moment, with a 1Y target price of VND 45,200/share (from VND 45,900/share).

05/03/2019

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BID VN_Company Update_Still awaiting tier-1 capital issuance in 2019_20190304

BIDV (BID: HOSE) posted VND9.473tn in PBT, translating into 9.3% YoY growth in 2018. This level of PBT growth is quite weak compared to the industry average of 31.6%, but this was not a surprise as the bank was still making progress in resolving its legacy bad debt, while desperately lacking capital to fuel credit growth. At the market price of VND32,850 per share, BIDV is trading at a 2019E PBR of 2x and a post-money 2019E PBR of 1.7x.

04/03/2019

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BMP VN_Company Update_No major catalyst for 2019_20190228

Net sales in 2018 went flat at VND 3,920 bn (+2.5% YoY) with total sales volume virtually unchanged at 94,582 tons (+0.2% YoY) and falling short of 5.4% of the volume targets. Although the sales of the PPR products more than double compared to last year, its contribution to the overall sale growth is minimal as it just accounts for 1% of total volume. Meanwhile, PVC products stills accounts for the majority of 85-86% of total sale volumes, whereas PE makes up a smaller share of 7%. At the current price, BMP shares are trading at 2019 PER of 9.6x, which is below the historical 3-year average of 12x due to the slowdown in BMP’s business results in the recent years.

28/02/2019

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GAS VN_Company Update_2019E earnings lift on higher dry-gas volume and profitability of LPG segment_20190228

In its unaudited financial statements for 2018, PetroVietnam Gas (GAS) reported VND 75.6 tn in net revenue (+17.2% YoY) on a consolidated basis, and VND 12.36 tn in consolidated net profit (+24.3% YoY). We revise upwards our 12-month target price for GAS to VND 106,000 from VND 95,500 after taking into account our upward earnings revisions, based on an unchanged target P/E of 17x and EV/EBITDA of 10.5x.

28/02/2019

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MBB VN_Company Update_Treasury share buyback reduces free-float_20190228

Military JSCB (MBB: HOSE) posted robust PBT growth, with a consolidated pretax profit (PBT) of VND 7.767 tn (+68.3% YoY). Again, this growth level is something we expected (i.e. 2018 PBT of VND 7.626 tn) as stated in previous report, but it’s worth reiterating that this kind of growth trounces 2017 PBT growth levels of 26.4% YoY. Parent bank PBT also grew 31.3% YoY to VND 7.03 tn. Similar to 2017, earning growth is driven by customer loan growth, especially individual loans, and NIM expansion. Non-NII also showed an outstanding growth at 87% YoY, resulting in 25% of Total operating income (TOI). CIR was higher as expected (i.e. 44.7%). Provision expenses were slightly higher than forecasted. At VND 22,050 per share, MBB is currently trading at 2019 PBR of 1.3x. We recommend a BUY rating with a 1-year target price of VND 30,800, equivalent to PBR 1.8x.

28/02/2019

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MWG VN_Company Update_Changing ICT store layout model and opening new stores are the main growth drivers for 2019-2020_20190227
MWG’s 2018 results surpassed the annual plan set by the company, and it was also in line with our estimates. Notably, this is the fifth consecutive year in which MWG achieved its annual target. At the current price of VND88,500, MWG shares are trading at 2019 and 2020 forward PERs of 11.2x and 9.5x respectively, compared to the 2019E PER of 14.7x for the local market.  In line with our earnings revision, we derive a new SOTP-based 12-month TP for MWG of VND 148,500/share (from VND 129,200), offering a 67.8% upside potential to the current price of VND 88,500. We reiterate our BUY rating on MWG.

27/02/2019

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TCM VN_Company Update_A brighter 2019 outlook thanks to the positive development at Sears_20190226

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.

26/02/2019

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FPT VN_Company Update_Reiterating Buy rating based on compelling valuation_20190226
On an apples-to-apples comparison basis, Q4 2018 net sales and pretax profit increased by 16% YoY and 24% YoY respectively. These growth rates are a little bit lower than the net sales and pretax profit growth rates through to 9M 2018, which amounted to 21% YoY and 33% YoY. The lower result in Q4 was due to fewer domestic IT services sales (-4% YoY), as these are project-based engagements. The lower Q4 performance also stemmed from slower software outsourcing PBT growth in Q4 YoY, which in turn was due to booking goodwill and M&A-related expenses in Q4. At the current market price of VND45,500/share, FPT shares are trading at a 2019E PER of 9.7x, which we see as compelling. We reiterate our BUY rating on FPT and 12-month target price of VND 63,000/share (down from our previous target price of VND 65,000/share based on a lower net cash and lower target PE for its retail business), which offers +38% upside potential.

26/02/2019

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