Company Report

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 During the meeting, the vote proposal regarding the merger with Ricons was abruptly withdrawn by the BoD, spurred by Kusto Group’s (Kusto) statement that it intends to vote against the merger.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.

Though KDH is trading at higher PE and PB ratios compared to peers’ average PE of 9.9x and PB of 1.6x, SSI believes its market value reflects the company’s short-term growth potentials but has not yet factors in its long-term growth. In our view, the key driver for KDH in the near term is its sustainable sales driven by Khang Dien brand and reputation in the market place.

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%.

2018 consolidated revenue reached VND 2.858 tn, up 23% YoY and NPAT reached VND 252bn, up 41% YoY, yet reached only 82% and 93% of the business guidance, respectively. The result was in line with our expectations, since in the last 5 years, FCN reached in average only 86% of the revenue guidance and 93% of the NPAT guidance. EPS of VND 3,009 was essentially flat due to the increase of 33mn outstanding shares resulting from the right issuance at ratio 10:6 in March 2018. Given current price of VND 14,700 /share and 2019-2020F diluted core EPS, FCN is trading at 2019-2020F PER of 8.2x and 6.2x, which is in line with the Vietnamese construction company average. On the other hand, FCN is trading at current P/B ratio of 0.8x given 2018 ROE of 15.3%, which is low comparing to peers.

GEX business results in 4Q18 maintained positive growth, with revenue and PBT increasing by 10.1% and 23.2% YoY. Key growth drivers come from the growth in CAV fueled by a lower input price, the recovery in transformers thanks to an extraordinary event, and the consolidation of VCW starting from Apr 2018. At the current price, GEX is trading at PER 2019 levels of 9.4x. Our rating for the stock is Market Perform (from Outperform), with a 1-year target price of VND 24,900 deriving from the Sum-of-the-parts method. Our target PER for electrical equipment, logistics, and utility are unchanged at 11x, 9x, and 8x respectively. In our view, GEX is an interesting stock to watch given its exposure to the stable growth electricity industry and the company‘s potential asset base.

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.