Company Report

In 2018, TCM posted net sales of VND3.66tn (+14.1% YoY) and net profit of VND260bn (+35.2% YoY). Excluding one-off items relating to one closed-down spinning factory and the provision of doubtful debt for Sears, net core profit would have arrived at VND284bn (+78% YoY). Gross profit margin expanded from 15.7% in 2017 to 18.5% in 2018 thanks to: (i) change in the sales mix towards fabrics and garments, which had higher margins than yarns; (ii) the increase in woven fabrics’ gross margin and (iii) yarn margin turning positive in 2018, from negative in 2017. At the current price of VND29,600/share, TCM is trading at 2019 and 2020 PERs of 7.4x and 6.1x respectively. Our rating for the stock is Market Perform with a 12-month-target price of VND30,700 (+3.7% upside), based on the industry average PER of 7.5x.

Vinhomes JSC posted 2018 net revenue of VND 38.8 trillion, an increase of 154% YoY, which largely originated from the handover of units relating to Vinhomes Metropolis, Vinhomes Green Bay, Vinhomes Golden River and Vinhomes Central Park. As such, sales of inventories made up 92.2% of total revenue, staging an increase of 179% YoY. Meanwhile, other businesses including leasing, property management, and construction services also accelerated in 2018 due to corporate restructuring practices carried out during the year.

HPG’s revenue and net profit for 2018 came in at VND 55.8 tn (+21% YoY) and 8.6 tn (+7% YoY), respectively. On a standalone basis, revenue in the final quarter reached VND 14.4 tn, an increase of 13% YoY. Meanwhile, net profit dropped by 26% YoY to VND 1.76 tn, mainly attributed to the contraction in the gross margin. Gross margin shrank from an average of 22.8% in the previous 4 quarters to 17.8% in Q4, which was largely attributed to the 11% correction in the steel price during the last 2 months of the year, with a 17% decline in Chinese steel prices reported over the same period. At the current price, HPG is trading at 2019 and 2020 forward PERs of 7.5x and 5.6x respectively. We cut our 2019F revenue and net profit by 7-10% to reflect the 4Q18 results. As a result, we lower our 12-month TP to VND 39,300 (from VND 44,700) based on an unchanged target PER and EV/EBITDA of 9x and 7.5x respectively, but reiterate our BUY rating for the stock.

2018 consolidated revenue of VND28.561tn (+5.2% YoY) came in line with guidance, yet was 2.5% below consensus due to several project delays. CTD’s revenue growth of 5.2% YoY in 2018 was lower than the 31% YoY and 52% YoY achieved in 2017 and 2016, respectively, but still positive when compared to several listed peers amid the slow housing market.

In 2018, MPC achieved $750.7 mn USD in export turnover, up 7% YoY and fulfilling 94% of its target plan. Lower export turnover results than plan was due to a lackluster in demand from traditional markets such as (i) the US and Canada due to snowstorms and (ii) a high inventory level in Japan and South Korea. This coupled with increasing supply from major shrimp exporting countries such as India, Thailand and Ecuador made it difficult for Vietnamese seafood exporters in 2018. At the current price of VND 47,200 per share, MPC is trading at 2018 PER of 6.1x and 2019 PER of 3.5x, comparable with the industry peer average of 6.0-6.3x in 2018.

In 2018, VNM reported VND52.56tn in net sales (+3% YoY) and VND10.23tn in net profit (-0.7% YoY). At the current price of VND142,000/share, VNM shares are trading at a 2019E PER of 24.9x and an EV/EBITDA of 15.9x. After adjusting up our earnings, we lift our 12-month TP to VND131,500/sh (from VND129,000) based on an unchanged 2019E PER of 23x, slightly below its regional peers’ valuation of 24x. We reaffirm our Underperform call on VNM as we see no strong catalysts that would trigger us to turn more positive on the counter.

2018 revenue for Q4 arrived at VND 2.317 tn, a slight growth of 4% YoY on the back of a 5%YoY increase in sales volume. Compared to the market, HT1 market share in the domestic market continued to improve to 10.6% in Q4, stepping up from 10.3% in Q3 and a further rise from 8.6% in Q2. The market share in the southern market also improved to 31% in Q4, a steady rise from 29% in Q3 and 27% in Q2. At the current price, HT1 is trading at 2019 PER and EV/EBITDA of 8.7x and 5.0x respectively, which is quite fair in our view. We change our rating for the stock from BUY to Neutral with one-year target price of VND 16,700 based on consistent PE and EV/EBITDA target of 8x and 6x respectively.

2018 total loans were at VND 230.3 tn, +17.1% YoY, PBT at VND 9.199 tn, +13.1% YoY. In particular: Parent bank total loans and PBT are projected at VND 177 tn, at +16.6% YoY and VND 7.934 tn,  +41% YoY. FE Credit total loans and PBT are forecasted at VND 53.3 tn, +18.9% YoY and VND 4.14 tn, -1.4% YoY. Our current forecast for VPB in 2019 includes growth in total assets, deposits, and credit at 14.3%, 16.2% and 16.3% respectively. We expect 2019F PBT at VND 10.16 tn, a +10.5% YoY rise. EPS and BVPS are forecast at VND 3,308 and VND 17,563 respectively.

The bank has become the #1 private bank in terms of absolute PBT figure being VND 10.661 tn (+32.66% YoY), which is fairly in line with our expectation of VND 10.5 tn in our previous report. Net interest income (NII) being VND 11.1 tn (+24.6% YoY) was responsible for 66% of TOI while non-NII brought in 34% of TOI. At VND 26,650 per share, TCB is currently trading at 2018 and 2019 PBR of 1.8x and 1.5x respectively, which is higher than industry average of 1.3x-1.4x.