Company Report

The revenue target for 2019 has been approved at the AGM at VND 16.7 tn, an increase by 22% YoY. However, the PBT target is set to drop by -10% YoY to VND 1.38 tn, which is also -14% lower than our current estimates for 2019 PBT of VND 1.602 tn (+4% YoY). At the current price, GEX is trading at 2019 PE forward of 11x. We maintain our Market Perform rating of GEX with 1-year target price of VND 24,200/share.

At the current price, PAC is trading at 2019 PE forward of 11.7x. Our rating for the stock is market perform with 1-year target price of VND 40,200/shared based on consistent PE of 12.5x. We think that the short term outlook of PAC is positive thanks to the low level of lead price and the company’s effort to address the capacity limitation of CMF battery line. However, amid the rising competition pressure and the change in market demand toward more modern product lines such as CMF or battery for electric vehicle, the long term prospect of the company would depend on the success of the company’s technology innovation to catch up the overall trend.

We maintain our BUY recommendation for PTB, with an upside of 28%. Our unchanged 1Y-target price is VND 83,300 / share using sum of the parts methodology. At a current price of VND64,800 / share, PTB is being traded at 2019F-2020F of 7.1x and 6.2x, which is considered low in our view. In addition, given the 2019 cash dividend worth VND 3,200/share, the current dividend yield is 4.9%, which is high for a growth stock. Our target price using sum of the parts is equivalent to a 2019F PER of 9.6x.

We raise our 12-month TP to VND 128,000 (from VDN 106,000) on our upward earnings revision anchored on unchanged target P/E of 17x and EV/EBITDA of 10.5x, which is 21% higher than current market price. Thus, we upgrade our rating from Market Perform to BUY. In addition, we expect GAS to pay high cash dividend for 2019 should it post strong earnings for the year. Recall that for 2018 its cash dividend was 53% on par, and it plans for only 30% on par for 2019.

DPM’s revenue increased notably to VND 9.395 tn (+16% YoY), surpassing its 3.8% revised guidance provided in December 2018. Net income arrived at VND 712 bn (-20% YoY, based on the post-audit financials of 2017), accounting for 115% of the 2018 revised target. At the current price of VND 17,550 per share, DPM is trading at 2019E PER of 18.5x on our revised 2019 earnings. These revisions were influenced by (1) the decline in sales volume of urea, NH3 and NPK and (2) increase in transportation tariffs. With equal weight assigned to PER, PBR and EV/EBITDA multiples of 9.5x, 1x and 5x (unchanged), respectively on our revised 2019 forecasts, we arrive at a new TP of VND 17,600 per share (from VND 21,700), and downgrade our rating to UNDERPERFORM (from Neutral).

Net sales increased by 16.4% YoY to VND 15.298 tn in 2018 (a bit lower compared to the growth of 21.1% YoY in 2017), accomplishing most of the 2018 plan at 95.5%. At the end of 2018, FRT had acquired a 19.2% market share of mobile phones (vs. 18.2% in 2017, 10.7% in 2014), and a 25% market share of laptops (vs. 18.5% in 2017, 13.3% in 2014) in terms of sales value. Since 2015, FRT has maintained its position as the second biggest retailer in mobile phones (only trailing MWG, whose market share is 45% in 2018), and has reaffirmed its position as the biggest laptop retailer. Taking into account only phones, GFK estimated that the general market in 2018 had grown by merely 1% YoY, much lower than previous double-digit growth from recent years.

For 2019, AAA set revenue and net profit targets at VND 10 trillion and VND 510 bn, equivalent to a stellar growth outlook of 25% and 140% YoY. At the current price, AAA is trading at a 2019 PER forward of 7x. This multiple is reached given the assumption that AAA would accomplish its 2019 profit guidance. Excluding the profit from industrial park lease, 2019 PER then would be 11x.

In 2018, the total gross premium of the Vietnamese non-life insurance market was estimated at VND 45.7 tn, at +10% YoY. The growth was slightly lower than 2017 results, at +10.61% YoY. Compensation ratio of the sector was 42.6%, higher than the 40.4% level attained in 2017. At the current trading price of VND 38,900 per share, PVI is trading at 2019F PER and PBR of 16.5x and 1.26x respectively, based on the company’s plan. The price is equivalent to 2018 PBR and PER at 1.28x and 16.2x respectively, compared to peers’ averages (excluding BVH) at 1.06x and 21.9x.

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)