Vietnam stock market investment opportunities: Nam Long Group (NLG)

Company Overview

NLG is a well-known property developer with 26 years of experience. After becoming a proven affordable housing developer in HCMC, NLG has expanded into the mid-range segment with over 11,000 units for sale in the next four years across its land bank in HCMC, Can Tho and Long An.

Key Summary 

- We reiterate our BUY rating on NLG and a target price of VND41,900. 

- We increase our valuation of NLG’s Waterpoint land bank, as we raise its premium to book value to 100% from 50% given we expect this to be partly monetized in Q4 2018 or Q1 2019. 

- However, this was offset by incorporating the following dilution events into our model: (1) an upcoming public offering plan of up to 40 million new shares (21% of issued shares) via auction to both local and foreign investors in June or July 2018 at an assumed issue price of VND30,000 per share; and (2) 24.6 million new shares upon Keppel CB conversion. See our AGM note. 

- Faster deliveries at pre-sold developments and the Akari City stake sale (aka Hoang Nam) will accelerate earnings, underpinning our 2018F NPAT-MI of VND709bn (USD31mn, +33% YoY). 

- On a post-public offering and conversion basis, NLG’s valuation remains compelling at a 2018F P/B of 1.3x, P/E of 9.0x and three-year PEG of 0.3x. 

- Upside catalyst: Confirmation of details relating to planned land acquisitions of 10-50 ha site area. 

- Downside risk: Intensifying competition in HCMC’s mid-range and landed property segments upon Vincity’s entrance into the market.

Faster deliveries and Akari City stake sale should speed up 2018 earnings. While Q1 2018 results trailed our forecasts due to timing delays related to revenue recognition, NLG’s top and bottom lines should accelerate in the coming quarters thanks to a faster pace of handovers at Kikiyo Residence and Fuji Residence (100% pre-sold), coupled with a stake sale at its Akari City development (aka Hoang Nam). We estimate an after-tax gain of around VND240bn (USD11mn) should be booked in Q2-Q3 2018, representing 33% of our 2018F NPAT-MI of VND709bn (USD31mn, +33% vs 2017).   

Solid progress at Waterpoint reinforces our confidence for NLG’s mid-term earnings outlook. Progress at the Waterpoint development looks on track, and management expects NLG to shortly strike a deal with potential Japanese partners in Q2 2018 to co-develop its 52-ha landbank (15% of the total site area). Similar to its Mizuki Park and Akari City co-developments, we expect NLG to set up a JV with its partners, and for the JV to purchase the aforementioned part of the Waterpoint land bank. We expect it to be valued at at least VND632bn (USD27mn), implying a value of VND4.2tn (USD184mn) for the entire Waterpoint land bank.

New launches at Akari City and Mizuki Park will accelerate 2018 contract sales value. In Q1 2018, NLG’s total contract sales value was VND942bn (USD41mn, -24% YoY). We do not consider this to be a sign of a slowdown in overall pre-sales for NLG because the take-up rate of already launched units was nearly 100%, and Q1 2017 was a high base due to the sales launch of Kikyo villas. Going forward, we anticipate a robust launch plan at Akari City and Mizuki Park (over 2,000 condo units at Binh Tan and Binh Chanh) in H2 2018 will be met by continued resilient demand for mid-range condos, evidenced by upbeat absorption rates at nearby developments.

(Source: VCSC)

To see the full analysis report. Please contact to my email: Hong.nguyen@vcsc.com

----------------------------------------------------------------------

Let me guide you how to invest in Viet Nam Stock market.

Step1: contact to me via email: Hong.nguyen@vcsc.com.vn (for more details)

Step 2: Visit Vietnam to take the feeling about Vietnam. If you see our potential investment, you do the next step.

Step 3: Open a bank account.

Step 4: Open a Securities Trading Code and Securities trading account.

--> Process will be complete. Don't forget take the Passport -notarized copy.

----------------

I hope to be your partner if you are interested in Vietnam stock market and would like to invest in Vietnam stock market.

If you have any questions feel free to contact me at my 

Email: Hong.nguyen@vcsc.com.vn

Tel: (+84)246-262-6999 Ext: 334

Vietnam stock market investment opportunities: Dat Xanh Group (DXG)

Company Overview

DXG is a well-known brokerage company with over 14 years of experience. Leveraging off its brokerage knowledge, the company has transformed itself into a prominent residential property developer with a focus on the mid-range segment. It currently has 15 residential projects under development in Ho Chi Minh City.

Key Summary 

- We raise our target price by 8% for DXG to VND33,700 mainly on an upward revaluation of DXG’s Gem Riverside and Saigon ResRiverside developments as we expect sales to accelerate, as well as higher average selling prices (ASP). However, the stock price has risen 30% since our last update report, prompting us to switch our rating from BUY to MARKET PERFORM. 

- We project 2018F NPAT-MI to grow 43% YoY to VND1.1tn (USD47mn), mainly driven by faster deliveries of pre-sold units and robust brokerage growth.

- We also project 2018 pre-sales contract value to grow by 309% to VND4.3tn (USD189mn), as we expect robust demand for the Gem Riverside development.

- Downside risk: Higher inventory risk as DXG’s wholesale brokerage business expands.

A healthy market coupled with DXG’s proven sales capabilities to drive brokerage growth. Brokerage contributed 76% of DXG’s 2017 GP. Per CBRE, Q1 primary condo transaction volumes grew 26% and 5% in HCMC and Hanoi, respectively. This upbeat liquidity indicates demand from homebuyers should remain strong in 2018. DXG’s brokerage arm, which has a market share of over 20%, reported solid performance in Q1 2018, with 3,600 units brokered via its channels, +37% YoY. As such, we still expect segment sales to advance at a double-digit rate of 15% in 2018, despite lower-than-expected top-line growth of 6% in Q1 2018 due to delays with the timing of revenue recognition.

Locked-in pre-sales ensure development growth momentum in 2018. After completing Opal Riverside handovers in Q1 2018, we expect Opal Garden, LuxGarden and Luxcity Officetel (1,000 units, 100% pre-sold) to be delivered over Q1 2018-Q1 2019. As of Q1 2018, the estimated backlog for these developments was VND1.9tn (USD83mn), equivalent to 125% of our 2018F residential development revenue projection. As such, we remain confident in our 55% YoY segment revenue growth assumption of VND1.5tn (USD66mn) for 2018. 

Strong initial interest in Gem Riverside’s launch signals brighter earnings outlook. The long-awaited Gem Riverside launch (DXG’s largest residential development yet) finally kicked off in April 2018 with over 1,600 units available to be reserved (50% of total units) at an ASP ranging from USD1,450 to USD1,600 per sqm (10%-20% higher than our previous assumption). Per management, over 90% of units have been reserved, two months out from the sales launch. This bodes well for our NPAT-MI assumption of at least VND2.5tn (USD110mn) for the project, which we expect to be recognized from 2020, and will therefore drive DXG’s EPS CAGR of 33% over 2017-2020F.

Resilient demand for mid-range condos reinforces our optimism for the ResRiverside project. Additionally, Thu Duc District, where the project is located, is benefiting from improving infrastructure, which has been reflected in strong demand for DXG’s nearby projects Opal Garden and Opal Riverside (100% pre-sold).

(Source: VCSC)

To see the full analysis report. Please contact to my email: Hong.nguyen@vcsc.com

----------------------------------------------------------------------

Let me guide you how to invest in Viet Nam Stock market.

Step1: contact to me via email: Hong.nguyen@vcsc.com.vn (for more details)

Step 2: Visit Vietnam to take the feeling about Vietnam. If you see our potential investment, you do the next step.

Step 3: Open a bank account.

Step 4: Open a Securities Trading Code and Securities trading account.

--> Process will be complete. Don't forget take the Passport -notarized copy.

----------------

I hope to be your partner if you are interested in Vietnam stock market and would like to invest in Vietnam stock market.

If you have any questions feel free to contact me at my 

Email: Hong.nguyen@vcsc.com.vn

Tel: (+84)246-262-6999 Ext: 334

Vietnam stock market investment opportunities: Refrigeration Electrical Engineering (REE) [BUY +52.3%]

Company Overview
REE is a holding company with businesses including Mechanical and Engineering (M&E), office leasing, real estate and power. Income from associated companies, mostly contributed by power generators, accounts for nearly a half of its total earnings.

Key Summary
- We reiterate a BUY rating for REE with 52.3% total return, including a dividend yield of 4.9%. 
- We raise our 2018F earnings growth from 15.6% YoY to 20.8% YoY thanks to a provision write-back from QTP and higher forecasts for some hydropower plants (TBC, TMP, VSH) given a strong Q1, which offsets slightly lower projections of M&E and office leasing segments.
- Long-term earnings growth could surpass our current forecast thanks to a guided 2018 new investment budget of USD130mn, triple that of last year, in power, water and real estate.
- REE is trading at an attractive 2018 P/E of 6.1x and P/B of 1.1x given ROE of 16.6%, enormous landbank and power plant assets. 

PPC is heading for a fruitful year and bright long-term outlook. We estimate that PPC’s consolidated NPAT will grow 19.1% YoY to VND1.02tn (USD44.7mn) due to stable core earnings, a provision write-back of VND65bn (USD2.9mn) for QTP and a retroactive realized forex loss of VND125bn (USD5.5mn). In addition, we expect PPC and its associated companies to have higher utilization in coming years as the electricity shortage worsens. Meanwhile, HND (26% owned by PPC) will finish its forex loss in CIP booking in this year, which could help boost reported 2019 NPAT by 153.7%.

CHP's further stake acquisition confirms a higher earnings contribution for 2018. REE registered to buy 2.5 million shares of Central Hydropower Corporation (CHP), which would bring its stake from a current 20.1% to 22.1%. After completely solving its technical issues, this hydropower plant returned to operation in April 2018 and is expected to generate share profit of VND38bn (USD1.7mn) in 2018 and VND75bn (USD3.3mn) in 2019, compared to no contribution in 2017. 

Strong backlog of USD260mn secures a positive outlook for Mechanical & Engineering (M&E) segment. We expect that earnings of the M&E segment will grow 4.8% and 7.0% over the next two years, but NPM is projected to decline by 100 bps due to an increasing copper price.

Two new projects will drive earnings growth of office leasing segment. We project 2017-2020 NPAT CAGR of 16.7% for this segment thanks to the start of operations of E-town Central (35,000 sqm) in 2018 and E-town East West (15,000 sqm) in 2019.

New acquisition of 35% stake in VCW brightens outlook for water segment. The new water associated company could double earnings of this segment in 2018. The company targets to solve a transmission problem late this year, implying 2019 NPAT growth of 25.8% for the water segment. 

To see the full analysis report. Please contact to my email: Hong.nguyen@vcsc.com

-----------------------------

Let me guide you how to invest in Viet Nam Stock market.

Step1: contact to me via email: Hong.nguyen@vcsc.com.vn (for more details)

Step 2: Visit Vietnam to take the feeling about Vietnam. If you see our potential investment, you do the next step.

Step 3: Open a bank account.

Step 4: Open a Securities Trading Code and Securities trading account.

--> Process will be complete. Don't forget take the Passport -notarized copy.

----------------

I hope to be your partner if you are interested in Vietnam stock market and would like to invest in Vietnam stock market.

If you have any questions feel free to contact me at my 

Email: Hong.nguyen@vcsc.com.vn

Tel: (+84)246-262-6999 Ext: 334

Vietnam stock market investment opportunities: Hoa Phat Steel Joint Stock Company (HPG)

Company Overview

HPG is Vietnam’s largest steel producer with 24% and 29% market shares in construction steel (current designed capacity of two million tons per year) and steel pipes, respectively. Other minor businesses include industrial manufacturing, real estate development and animal feed production.

Key Summary

- We reiterate our BUY rating on HPG and trim our target price by 4% to VND74,100/share as we maintain our key assumptions for HPG’s construction steel segment, but increase the WACC.

- Solid Q1 results with strong top-line YoY growth of 27% was supported by both healthy volume growth and selling price increases. Meanwhile, margins remained resilient despite the industry-wide downward margin trend, driving 14% NPAT-MI YoY growth.

- We lower our 2018 NPAT-MI forecast by 3% to VND9.1tn (USD402mn, +14% YoY), as we lower forecasts for the galvanized steel and agricultural segments due to a challenging industry outlook.

- We reiterate our confidence on the outlook for HPG’s construction steel core business. Robust demand from domestic construction activity and healthy global steel supply-demand dynamics will offer solid support to sales volume and prices over the medium term.

- Our 2018F P/E at 9.9x implies attractive upside given HPG’s solid fundamentals and outlook for growth coming from capacity expansion of its Dung Quat Steel Complex.

Domestic construction activity and capacity expansion will support steel sales volume. HPG’s construction steel and steel pipes sales volume rose 7% and 19% in Q1 2018 vs Q1 2017, respectively. As HPG already maxed out its capacity in 2017 with 2.2 million tons sold, we maintain our 10% volume growth forecast for construction steel, equivalent to 2.4 million tons. The additional capacity will come from the Dung Quat Steel Complex, whose first rolling mill of 600,000 tons will come online in July 2018 and the full operation of 2 million tons will come in Q3 2019.

Limited disruption expected from maintenance of one BOF in Q2 2018. HPG paused operation of its Basic Oxygen Furnace (BOF) No. 2 (one out of three HPG BOFs) and some other related works from the end of March 2018 to the end of May 2018. This is the first maintenance cycle for BOF No.2 since it started operating in 2013. As this is pre-scheduled maintenance, HPG boosted its reserves of billets in advance to ensure a full supply of billets for steel production during these months. 

2018 profit forecasts trimmed as competition heats up in local galvanized steel market. Amid fierce competition between local galvanized steel producers, we lower our sales volume assumption for HPG’s galvanized steel plant to 300,000 tons vs 400,000 tons (full capacity) and lower our gross margin forecast from 15% to 13%. We also expect the agriculture segment to post a slight loss due to weakness in the animal feed industry. This has led us to trim our full-year NPAT-MI forecast by 3%.

Balanced global supply-demand dynamics support steel selling prices. As global steel markets rebalance, finished steel selling prices continue to exhibit strong recovery momentum despite the volatility in underlying iron ore prices. HPG’s construction steel ASP has risen 31% to VND13.7mn (USD601) since the end of June 2017 and is up 7% YTD, while iron ore prices have fallen by 5% and 13% over the same periods, respectively. For HPG, we maintain our assumption for construction steel ASP of VND11.8mn per ton in 2018 (USD520, +3% vs 2017 average) as China rebar prices are also softening in addition to iron ore prices, creating downward pressure on domestic and HPG steel ASP.

To see the full analysis report. Please contact to my email: Hong.nguyen@vcsc.com

-----------------------------

Let me guide you how to invest in Viet Nam Stock market.

Step1: contact to me via email: Hong.nguyen@vcsc.com.vn (for more details)

Step 2: Visit Vietnam to take the feeling about Vietnam. If you see our potential investment, you do the next step.

Step 3: Open a bank account.

Step 4: Open a Securities Trading Code and Securities trading account.

--> Process will be complete. Don't forget take the Passport -notarized copy.

----------------

I hope to be your partner if you are interested in Vietnam stock market and would like to invest in Vietnam stock market.

If you have any questions feel free to contact me at my 

Email: Hong.nguyen@vcsc.com.vn

Tel: (+84)246-262-6999 Ext: 334

Vietnam stock market investment opportunities: Masan Group (MSN) Consumer growth starts to materialize

Company Overview

Masan Group operates in the branded food and beverage sector and in the animal protein value chain. Other businesses include mining and a significant holding in a bank

Consumer growth starts to materialize   

Key Summary

- We update MSN with a BUY rating with 50% upside. The 20% upward revision in our TP is driven by an improved F&B outlook, revaluation of associate companies and higher metal prices.

- 2018F PER seems high at 25.6x, but is supported by a strong earnings outlook. We forecast an EPS CAGR of 34% during 2019-2020 driven by robust core business growth and deleveraging.

- Proceeds from MSN's potential sale of treasury shares (up to 110 million shares) will accelerate the deleveraging process and, hence, bottom line growth.

- Masan Consumer Holding (MCH) spearheaded a strong bounce-back in MSN’s NPAT-MI in Q1 2018 (+244% YoY), followed by associate companies and Masan Resources (MSR). 

- We raise our 2018 NPAT-MI forecast for MSN by 4% to VND3.9tn (USD173mn, +81% vs normalized 2017 NPAT-MI) mainly due to the outperformance of MCH and MSR. 

- Upside catalysts: successful launches in new F&B growth pillars, such as beer and processed meat, and a further recovery in pig prices, which will support Masan Nutri-Science (MNS).

- Downside catalysts: MCH losing growth momentum and a retreat in metal prices.     

Strong sell-out growth shows MCH’s shift to a brand building model is working. MCH’s reported revenue soared 78% in Q1 2018 vs Q1 2017, when it was hurt by distributor de-stocking. More importantly, MCH’s sell-out, which represents end-consumer offtake, jumped 47% YoY in Q1 2018, fueled by intensified Masan marketing and product launchings, especially in the premium segment. Meanwhile, EBIT margin expanded dramatically owing to (1) a surge in high-margin seasoning sales and (2) a contraction in SG&A/revenue % on reduced trade promotion expenses. For 2018, we project MCH’s revenue and EBIT will jump by 26% and 71%, respectively, vs 2017.  

MSR thrives on selling price tailwinds. MSR’s revenue ratcheted up 26% while its EBIT stepped up 47% YoY in Q1 2018, primarily due to escalating selling prices. Recovering demand in the oil & gas and manufacturing sectors, the shutdown/suspension of high-cost mines and rising costs in China due to stricter environmental standards are bolstering tungsten prices.   

MNS still weighed on by the pig oversupply crisis, but recent pick-up in pig prices is a positive sign. MNS’s revenue and EBIT plummeted 40% and 69% YoY, respectively, in Q1 2018 as (1) pig feed plunged 50% YoY and 22% QoQ due to shrinking farming activity amid low pig prices and (2) poultry feed nosedived 38% YoY as Masan stayed away from price wars. Since early April 2018, livestock pig prices have bounced from USD1.3-USD1.4/kg to USD1.6-USD1.8/kg, well above the average industry production cost of around USD1.5/kg. Supply has been gradually scaled down, and if pig prices could at least sustain this level, it would bode well for pig feed demand in late 2018 and 2019. For 2018, we project MNS’s revenue will slide 9% while EBIT will drop 39% YoY. Margins are poised to dwindle due to input cost hikes and a larger sales contribution from the value segment.   

To see the full analysis report. Please contact to my email: Hong.nguyen@vcsc.com

-----------------------------

Let me guide you how to invest in Viet Nam Stock market.

Step1: contact to me via email: Hong.nguyen@vcsc.com.vn (for more details)

Step 2: Visit Vietnam to take the feeling about Vietnam. If you see our potential investment, you do the next step.

Step 3: Open a bank account.

Step 4: Open a Securities Trading Code and Securities trading account.

--> Process will be complete. Don't forget take the Passport -notarized copy.

----------------

I hope to be your partner if you are interested in Vietnam stock market and would like to invest in Vietnam stock market.

If you have any questions feel free to contact me at my 

Email: Hong.nguyen@vcsc.com.vn

Tel: (+84)246-262-6999 Ext: 334

Vietnam stock market investment opportunities: Saigon Cargo Service SCS

Company Overview

Saigon Cargo Service (SCS) is an air cargo terminal operator located in Tan Son Nhat (TSN) airport. As of the end of 2017, the company held a 33% market share of cargo throughput at TSN airport. SCS also leases apron, offices and soccer fields, all located on the same plot of land.

Key Summary

- We reiterate our BUY rating on SCS with a target price of VND185,100 per share, implying a total stock return of 23.8%.

- We maintain our 15% international volume growth assumption for 2018 as we expect volumes to accelerate from Q2 after a slow Q1.

- We forecast 2018 revenue to grow 16.7% YoY to VND687bn (USD30.3mn) and NPAT to grow 24.7% YoY to VND429bn (USD18.9mn).

- SCS’s HOSE listing will likely take place before its AGM at the end of June. 

- We continue to be bullish on SCS because of (1) vibrant air cargo transport demand in Vietnam (around 15% per annum, according to the Civil Aviation Authority of Vietnam), (2) SCS’s duopoly market position with high barriers to entry at Tan Son Nhat (SGN) airport and (3) low capex needs, low financial leverage and cash conversion of 90%.

- The key risks to our SCS investment thesis remain (1) SGN airport capacity constraints (2) cyclical trade flows and (3) possible M&A activity.

International cargo volumes should be back on a growth trajectory from Q2. We maintain our full-year 15% international volume growth assumption for SCS, despite a slower than expected Q1, as we anticipate volumes will accelerate from Q2. Q1 2018 international volume only grew 3%-4% as a major client reduced its flight frequency to/from SGN from Q2 2017, but this loss has since been offset by other clients ramping up volumes. Looking forward, we expect continued volume growth from existing clients and additional volume from a new major client, Japan Airlines, who was onboarded in May 2018. 

Margin expansion continues as expected. SCS’s flexible workforce and stable depreciation costs boosted SCS’s GPM to 79.2% in Q1 2018 from 77.5% in Q1 2017. We currently assume SCS’s GPM and NPM will expand further and reach 87.5% and 72.0%, respectively, by 2022, thanks to SCS’s low capex needs and high operating leverage. 

Impact of SGN runway maintenance on SCS’s valuation should be minimal. ACV recently said it intends to complete maintenance of SGN airport runways, pending approval from the MoT, over four consecutive off-peak months in 2019, shutting down one of the two current runways at a time. As the impact of the maintenance is isolated to this period, our five-year DCF valuation would remain broadly in line at ~VND184,396 (19.7% upside, excluding dividend yield). This assumes SCS’s 2019 NPAT growth would fall 7% YoY. 

Lack of M&A opportunities should translate into high cash dividend. SCS’s intention to expand into other businesses and/or segments remains on ice because of a lack of attractive opportunities. We therefore expect SCS to pay a high cash dividend of around VND5,500 per share in 2018 rather than issue a stock dividend. 

(Source: VCSC - Viet Capital Securities)

To see the full analysis report. Please contact to my email: Hong.nguyen@vcsc.com

Let me guide you how to invest in Viet Nam Stock market.

Step1: contact to me via email: Hong.nguyen@vcsc.com.vn (for more details)

Step 2: Visit Vietnam to take the feeling about Vietnam. If you see our potential investment, you do the next step.

Step 3: Open a bank account.

Step 4: Open a Securities Trading Code and Securities trading account.

--> Process will be complete. Don't forget take the Passport -notarized copy.

----------------

I hope to be your partner if you are interested in Vietnam stock market and would like to invest in Vietnam stock market.

If you have any questions feel free to contact me at my 

Email: Hong.nguyen@vcsc.com.vn

Tel: (+84)246-262-6999 Ext: 334

How to invest in Vietnam Stock Market?

[How to invest in Vietnam Stock Market?]

Hi everyone, to those who are looking for a way to invest in Vietnam Stock Market.

I'm Hong, from Vietnam. I work as a investment broker at Viet Capital Securities - the top investment company in Vietnam. It's my pleasure to guide you how to invest in Vietnam Stock market.

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About Vietname.

First of all, let me share some lines about my country Vietnam. My country is a developing country. Emerging from an under-developed country, Vietnam is recovering and developing after the damage of wars. Since 1989, the economy has opened and done the Economic Reform. Up to now, we have gained a number of accomplishments with the high growth rate. In addition to, Vietnam has welcomed an incresing number of foreigners working and investing in Vietnam at all industries. Therefore, we have learned English to overcome language barrier and be well-adapted to the global working environment. To be honest, we have learned many things from all of you. Thank you so much.

Vietnam is beautiful country, if you have once visited, I think you will love it. As the young generation, we want to build our country to be a great place for all people in the world coming to visit, work or even settle down here for long time.

--------------------------

Let me guide you how to invest in Viet Nam Stock market.

Step1: contact to me via email: Hong.nguyen@vcsc.com.vn (for more details)

Step 2: Visit Vietnam to take the feeling about Vietnam. If you see our potential investment, you do the next step.

Step 3: Open a bank account.

Step 4: Open a Securities Trading Code and Securities trading account.

--> Process will be complete. Don't forget take the Passport -notarized copy.

----------------

I hope to be your partner if you are interested in Vietnam stock market and would like to invest in Vietnam stock market.

If you have any questions feel free to contact me at my 

Email: Hong.nguyen@vcsc.com.vn

Tel: (+84)246-262-6999 Ext: 334