Company Report

We raise our 12-month target price to VND81,300, based on an unchanged PBR target of 3.0x applied to our 2020E BVPS (previously VND68,600 using 2019E BVPS), for a potential upside of 8.4% from the current price of VND75,000. Please note that this does not consider the cash dividend of 8% at par in 2019 and 2020 that we had previously assumed. Given the reduced potential upside, we downgrade our rating from Buy to Market Perform.

We revised upwards our forecast for ACB 2019 PBT to VND 7.58 tn, at +18.7% YoY and +2.9%, elevated compared to our previous forecast of VND 7.37 tn. This raised outlook comes from higher forecasts of credit growth from the previous 13% YoY to 16.5% YoY. For 2020, we expect ACB to earn VND 8.79 tn of PBT at +16% YoY, given credit and deposit growing by 16% YoY and 15% YoY respectively. Using average BVPS of 2019F & 2020F and the target PBR of 1.8x, we arrive at a 1Y target price of VND 44,000 per share, which is equivalent to a dynamic upside of 46.2% from the current price. Therefore, we reiterate our BUY recommendation on the stock.

At the moment, GMD is trading at 2019F and 2020F forward PER metrics of 14.7x and 13.2x respectively, which is slightly lower than GMD’s historical PE range of 14-15x. 2019F and 2020F P/B ratio are estimated at 1.35x and 1.32x respectively. We are waiting for the mid-year report to be released, of which will spur an update from us, and might spark a revision of our forecast accordingly.

At the current price of VND 23,300 per share, LTG is being traded at a 2019 PER of 4.2x on total earnings and 5.7x on core earnings. We think that the main business (CPC – making up 53% of net sales and 77% of gross profit in 2018) will face more competition from cheaper generic products imported from China, while the improvement in rice and seed businesses may not be adequate to offset the decline in CPC earnings in the near term. In the longer term, LTG growth will depend on the potential of the rice business, which is quite uncertain at the moment. Nevertheless, LTG is traded at a cheaper valuation compared with industry peers, with a decent dividend yield (6.9%). For valuation, we use a target PER of 6x, lower than the peer average owing to high D/E ratio amid thin net profit margin. As such, we arrive at 1Y target price of VND 25,500, which is equivalent an upside of 9% from the current price and a MARKET PERFORMANCE rating.

In 2018, Vicem delivered a net sales of VND 27.9 tn, an increase by 11.3% fueled by the increase of 9% in sales volume. Although the gross margin declined slightly by 0.8 ppts to 17.6% due to the increase in the coal price by 15%, PBT in 2018 attained strong growth of 20.6% thanks to significant savings in financial expenses. More specifically, financial expenses dropped to VND 986 bn from VND 1.496 tn in 2017, mainly thanks to a net exchange rate gain of VND 29 bn, compared to an exchange rate loss of VND 563 bn in 2017. In addition, the company’s debt repayment of VND 3.3 tn in 2018 also helped to cut interest rate expenses by VND 146 bn in 2018 compared to 2017.

We maintain our 20x PE target for 2020, and revise upwards our target price for VTP to VND 170,900/share (an upside of 26%) as we roll forward our valuation using our 2020 earnings estimate, and reiterate our OUTPERFORM rating for the stock. In a nutshell, we believe the market reaction is overblown regarding the news of the new businesses, and if continues, we feel this creates a buying opportunity for long-term investors.

At the current price, AST is trading at 2019F and 2020F forward PE levels of 16.6x and 13.3x respectively. Recently, the stock has reached our target price as of our last report. With the recent development in AST (withdrawal from A la Carte Ha Long project, and acquisition of the duty-free business), the company now looks more complete, and less risky than before. We also highly appreciate the management’s transparency, and acting in benefit of the shareholders.

Based on audited financial statements, 2018 BVPS and EPS of BVH were VND 22,065 and VND 1,612 respectively. At the current price of VND 81,300 per share, the stock is trading at 2018 PBR and PER of 3.7x and 50.4x respectively. Based on the company’s 2019 plan, 2019 BVPS and EPS of BVH on a respective basis are estimated at VND 22,748 and VND 1,676, with current PBR and PER at 3.57x and 48.5x. We estimate that if the capital issuance is implemented in 2H 2019, at the price equal to 3 times BVPS as of June 2019 at VND67,220 per share, BVH would have the proceeds of VND 2.785 tn. 2019F BVPS would pop up at +11% to VND 25,231. The PBR at current price would then be 3.22x.

At the current price, VGC is trading at 2019 PER of 13.6x. Our rating for the stock is Outperform, with a 1 year target price of VND 23,600/share, imlying an upside of 16% from the current price. We think that encouraging earnings growth in 2019, as well as the government divestment, would together be supportive catalysts for the stock in the next 12 months. Used to be mainly regarded as a construction material manufacturer, VGC should be rather viewed as a property developer in the next 12 months given the tremendous growth of the industrial park segment and the expected contribution of around 60% of consolidated PBT in 2019.

YTD (January 1st – May 19th 2019), tapped volume and purchased volume reached 3,055 tons (-7% YoY) and 4,030 tons (+22% YoY) respectively. The TOCOM rubber price surged from JPY 175/kg to JPY 239/kg despite weak demand from China on the back of the US-China trade war. The uptrend was particularly intense in May (from JPY 189/kg to JPY 239/kg) due to a temporary shortage of natural rubber.

Given the decline in the book-to-bill ratio to just 1.2x, we lower our expectations for 2020F regarding revenue and NPAT by -4%. At the current price of VND 15,450/share, HBC is trading at 2019F PER levels of 5.9x, which is considered fair in our view. HBC is trading at a lower PER than its average ASEAN peers’ PER level of 8.0x, yet possesses characteristics of (1) a higher D/E (1.48x as of 31 Dec 2018), (2) a higher DOR and (3) a 2019-2020F core NPAT CAGR of only 1.5%.

For 5M19, revenue rose by 15.4% YoY (vs. 43% YoY for 5M18) to reach VND42.784tn, achieving 39.4% of the company’s annual plan. This was mainly due to growth in the Dienmayxanh and Bachhoaxanh chains. Net margins reached their highest level since the start of 2017, at 4.2% in 5M19, above the 3.5% level achieved in the same period last year, and the 3.3% for 2018. As such, 5M19 net income attributable to shareholders jumped by 39.0% YoY to c.VND1.792tn (vs. +43.9% YoY for 5M18), reaching 50.2% of the annual plan. At the current price of VND91,400, shares of MWG are trading at 2019E and 2020E PERs of 10.3x and 8.4x, respectively, which compares to SSI’s year-end target 2019E PER of 14.5x for the VN-Index. Following the upward revision to our earnings, we lift our SOTP-based 12-month TP for MWG to VND160,300/share (previously VND148,500). As our new TP offers some 75% upside potential, we reiterate our BUY rating on MWG. The key downside risk to our call would be fiercer-than-expected competition in the grocery business.

We maintain our 1Y-TP for ACV at VND 95,200/share (10% upside), based on a target EV/EBITDA of 16x (15% premium compared with the global average). Given the limited potential upside to current market price, our rating is Neutral. We will give further updates in our upcoming 2Q19 earnings report.