Company Report

We maintain our Market Perform rating on the shares of MSB on the back of our 1Y target price increase of 25.1% to VND 29,400/share, which implies 7.7% upside. Provided MSB can dispose of at least 50% of FCCOM for VND 1 tn or more, which doesn’t appear to be a stretch, our 1Y target price could increase further. Post-strong 1Q21 earnings results, we raise our PBT forecast +10.3% for MSB 2021F to VND 3.86 tn (+53% YoY). During the quarter, PBT amounted to VND 1.2 tn (+296% YoY), fulfilling 35% of 2021F full-year guidance (VND 3.3 tn). Excluding one-off income of VND 200 bn from an equity divestment, MSB’s core business rocketed +227% YoY driven by solid net interest income (NII) growth (+58.8% YoY), non-interest income growth (+20.4% YoY) and the sharp fall in CIR. Further, MSB now sits atop the Top 3 for credit growth over the past three years, and we see no change in its growth trajectory. MSB has also cleared its VAMC bonds last year, enabling long-term credit costs to be in a downtrend. 

We fine-tune our estimate for HT1 2021 sales volume at from 7.0 mn to 7.1 mn tons, an increase of 6.5% YoY. However, we slightly lower our ASP forecast 0.6% to VND 1.1 mn/ton (-2% YoY). Accordingly, we revenue and PBT is fine-tuned for 2021 at VND 8.3 tn (+4.1% YoY) and VND 750 bn (-2.3% YoY), respectively. For 2022, we expect PBT to recover 9.3% YoY to VND 819 bn on the back of organic sales volume growth of 4%, as well as a slight rebound in cement pricing and lower interest expense. At VND 15,800 per share, HT1 trades at 2021 and 2022 PE of 11.6x and 10.5x, respectively. We maintain a Market Perform rating on the shares with 1-year target price of VND 16,400/share based on a target P/E and EV/EBITDA of 10x and 5x, respectively. 

Our 2021 DXG estimates are VND 7.5 trillion (+158% YoY) for revenue and VND 1.3 trillion for NPATMI (vs. the loss of -VND 496 bn in FY2020) with major revenue streams from Gem Skyworld and Opal Boulevard; and brokerage and secondary investments. For 2022, we expect that Gem Skyworld, Opal Boulevard and St Moritz will be key performance drivers given the full unit handovers, while the brokerage segment maintains its stable growth. Our 2022 estimates are VND 8 trillion (+6.6% YoY) for revenue and VND 1.6 trillion (+18.7% YoY) for NPATMI. At VND 27,800/share, DXG trades at a 2021 P/E and P/B of 11.1x and 1.9x respectively, and a 2022 P/E and P/B of 9.4x and 1.6x – pre-share issuances. Our target price is VND 32,300/share, which represents 16% upside affirming our OUTPERFORM rating on the shares of DXG. The key upside surprise to our call  is faster-than-expected legal approvals for projects in HCMC, and better-than-expected performance of DXS shares upon listing, which may potentially trigger upside catalyst for DXG stocks. On the other hand, a key downside risk would be longer-than-expected legal approvals for upcoming projects, which may cause launch delays. 

We reiterate our Outperform rating for Nam Long Group (NLG) and raise our target price 23% to VND 47,000/share using RNAV valuation method (+17% potential upside), given the strength in forecasted earnings coming from higher average sales prices of the Mizuki Park project, as well as due to the changes made in effective ownership and valuation (Waterfront- Izumi City) from 35% to 65%. Our valuation also reflects the favorable real estate market conditions which should benefit NLG’s large land bank with cleared land plots, and project pipeline. In addition, we also believe that a 60 mn share private placement plan (equivalent to 20% of total outstanding shares) should act as a catalyst for the shares, as this will provide the additional financial resources for NLG’s expansion. 

Meanwhile, revenue in Q1/ 2021 dropped to VND 236 bn (- 43.3% YoY), but the profit after tax increase to VND 365 billion (+ 231% YoY) thank to other income booking.  In which, the real estate business was negligible, with revenue of just VND 43.9 bn (- 69.4% year on year) as 22 low rise units were handed over from completed projects in Ho Chi Minh City. Revenue from other segments (including consulting services, construction, office leasing, and project transfer) amounted to VND 192 bn (-39% YoY). Also, NLG recorded a profit of VND 429 bn (compared to only VND 11.4 bn in Q1 / 2020), arising from the non-cash valuation of the Waterfront project in Dong Nai. For 2021, we expect NLG revenue/ NPATMI to remain unchanged due to the handover backlog of the Akari and Waterpoint projects. This represents VND 4.19 tn of revenue (+ 89% YoY) and VND 1.1 tn of NPAT-MI (+ 28% YoY). NLG trades at a 2021F P/E of 10.6x and P/B of 1.6x. 

SHB announced strong 1Q21 earnings, with TOI and PBT respectively delivering VND 2.6 tn (+38% YoY) and VND 1.7 tn (at +113.5% YoY). PBT fulfilled 28.6% of 2021 full-year guidance (VND 5.83 tn). SHB fulfilled 28.6% of 2021 full-year PBT guidance – driven by strong NII growth (+32% YoY), non-interest income growth (+98% YoY), and a sharp decline in CIR to just 34.9% from 58% in 1Q20.We forecast SHB to achieve VND 6.06 tn in pretax profit (+85.5% YoY, completing 104% of the AGM plan) for 2021. For 2022, PBT is expected to reach 7.4 tn (+22.6% YoY). The burden of bad debt is gradually lightening and the strong growth of equity helps SHB able to accelerate in terms of operating scale and profit, the ROE has been improved to 15-16% (from 10-13% of previous years). We adjust our target P/B ratio to 1.6x from 1.4x and using the average BVPS of 2021F and 2022F, our 1Y target price is VND 25,050/share, implying a -19% downside from the current market price, so we downgrade our recommendation from MARKET PERFORM to UNDERPERFORM for SHB.

We remain positive on Gemadept outlook in the coming time. The port business should continue to benefit from rapidly growing Vietnamese trade. Cai Mep is filling up very quickly and the current oversupply is expected to be soon depleted, paving the way for increased floor service price and improved port profit margins. The logistics segment also looks brighter for GMD, as segment demand is rising fast. We maintain our 2021 growth forecasts of 13.6% YoY for revenue and 33.5% YoY for net income, as stated in our previous report (link). We roll forward our valuation through June 2022 for a new target price of VND 41,400/share (from VND 38,500/share), implying a 12.3% upside. We reiterate our OUTPERFORM rating on the shares of GMD. Our rating does not take into account the possible impact of a new potential floor price, or the impact of the divestment of real estate/ rubber/ port projects which are positive catalysts for the shares. Downside risks include: (i) Gemalink’s delayed full utilization of capacity; (ii) lower pricing resultant of intense competitive pressures; and (iii) container shortages which weigh on port volume.