Company Report

In Q1.2018, evenue of the company reached to 12.121 billion(+1% YoY). If excluded revenue from cow farms and sugar, the result may decreased 2% compared to a high Q1- 2017 base due to a weak consumption of dairy product in the North as a result of a long cold season. Also, we believe that this low pace in domestic dairy revenue growth was affected by the fact that high base in Q1.2017 was partly driven by sales in Q4.2016 to be transfered. Net profit declined to VND 2,683 bn, by 8% YoY, of which downward trend was partly owe to a reduction in export sales mainly to Iraq (which make up over 70% export market of VNM), whose internal situation still remains instable. The first quarter of 2018 witnessed a downtrend in the GPM, 45.3% compared to that of 48.2% in same period in 2017. This resulted from the contribution from the highmargin market dwindled (like Iraq) and the hit from sugar business while domestic’s GPM remain stable. Accordingly, in Q1 2018, Vietsugar incurred

In the first 6 months, PNJ achieved net sales of VND7,357 billion, up 34% y/y. Net profit after tax was VND 517 billion, an increase of 37% over the same period last year. Particularly, PNJ announced Q2.2018 consolidated financial statements with net sales of VND 3,217 billion, an increase of 37% over the same period last year. According to PNJ, the revenue growth factor is still mainly focused on gold jewelry retailing channel. PNJ's gross profit in the second quarter was nearly 583 billion dong, equivalent to gross profit margin of 18.1%, significantly higher than 17.1% in the second quarter of last year. This is also the second consecutive quarter PNJ reached gross profit margin of 18%. NPAT accordingly rise 40% to reach VND 180bn. As of the end Q2.2108, PNJ has a total of 298 stores with 17 newly-opened stores this quarter, meaning the company almost completes its FY2018 target of 300 outlets early. As shared by management boards, there is still room for stores expansi

In Q2.2018 Pinaco's net sales reached VND798 bn, up 14.8% y / y and gross profit was VND 114.28 bn, up 20.2% over the same period, resulting from an increase in gross profit margin of 2.5 ppt. The key factor driving up GPM was the increase of 15% in battery price y/y. However, due to an irregular income of VN 25bn from the relocation of Gia Phu factory in Q2.2017 taking up almost a half of pretax profit, NPAT suffered a fall of more than 50% to VND 27.7bn this quarter, which if excluded would ease the decrease in pretax-profit to only 11.8%. Remarkably, SG&A expense/net sales ratio rose from 6% to 10% over the same period, which also hit net profit. As shared by PAC, due to intense competition, the company had to change its sales policy, boosting marketing activities, leading to higher selling expense and rising sales discount. Financial income - coming from interest income - decreased VND2.7 bn to VND12.5 bn. Meanwhile, financial expense - mainly borrowings and exchange l

In the first 6 months of 2018, Gemadept completed transfer of 51% stake in Hoa Sen - Gemadept Port (Profit of VND115 billion) which will be accounted for in Q3.2018 profit. Divesting 50.9% stake of Gemadept Logistics Holdings (Gained 1.356 billion) and 49% of Gemadept Shipping (Gained VND100 billion) to CJ Logistics in the first quarter of 2018 brought financial income to VND1,500 billion. However, the sale of logistics to CJ also reduced its Logistics Revenue to VND248 billion (-76.2%). Ports revenue increased due to new port launching Nam Dinh Vu Port in Hai Phong started operation in February 2018. With three other ports operating in Hai Phong namely Nam Hai Dinh Vu, Nam Hai and Nam Hai ICD, GMD solidifies its integrated logistics operations. Hai Phong is also one of the key industrial centers of Vietnam, especially import-export activities are bustlingly happening here. Profitability is improved by focusing on core business After transferring logistics activities to

The major business activities and functions of PVGas are the collection, storage, transportation and distribution of gas through its subsidiaries. In Vietnam, PVGas is the only unit assigned by Vietnam National Oil and Gas Group (PetroVietnam) to carry out the above activities. The main products of PVGas are dry gas, LPG, condensate, auxiliary activities for gas businesses such as gas & condensate transportation, gasoline and oil, office leasing, pipe production. steel and pipe coating. Crude gas after being collected from the gas fields will be transported to Gas Processing Plants to extract condensate and water and then treated with acid to separate sulfur and hydrocarbons such as Ethane, LPGs (Propane and Butane). After being processed, dry gas is mainly Methane. Dry gas can be liquefied (LNG) for transportation or compression (CNG) and delivered to the point of sale through high pressure piping. LPG is mainly used in civil use (12kg gas cylinders for civil use and 45kg

Net revenue of CVT reached VND1,448 bn, up by 22.8% yoy, which completed 85% of the business plan. Gross profit margin (GPM) hit 20.1%, sliding 3.7% YoY as the output price declined and the input cost rose with the depreciated cost from the new factory. EBT of the company was VND 209 bn, down by 3.7%yoy, which completed 80.5% of the plan. NPAT in 2018 was VND168.1 bn, deceasing by 3.3% yoy. CVT has a prudent business plan with 2019 revenue expected to reach VND1,700 bn, up by 10.6% yoy. EBT is expected to reach VND220 bn, gaining 5.26% yoy. The new product line, which is tiles absorbing soluble salt – micro crystal, has difficulties in penetrating the market. Amid fierce competition in the construction market, declining gross profit margin, and construction businesses heading towards affordable products to reduce cost, high quality products consumption will meet many obstacles. According to general statistics, the price of tiles sold tends to decrease by 2-3% compared to

In 1H2018, CTD recorded a revenue of VND 12,613bn (+19.6% yoy) and a net proft of VND 718bn (+0.7% yoy). Despite a signifcant soar in revenue, net proft saw a decline as gross proft margin dropped from 8.4% in 1H2017 to 6.7% in 1H2018. This resulted from a reducton in contributon of design and constructon contracts, a hike in input material price and pressure from domestc competton. In additon, G&A expense increased sharply to VND 260bn (+41.3% yoy) since labor cost rose as a result of adjustments of basic salary and insurance fee startng 1 Jan 2018. Total number of newly signed contracts in 1H2018 reached VND 13,900bn (including: Vinfast, Hoa Phat Dung Quat Steel Complex, Casino Hoi An), down by VND 14,000bn compared to that of 1H2017. transferred contracts untl Q2/2018 valued at VND 24,000bn (compared to VND 23,000bn at the end of 2017). CTD has signed a contract to be the main contractor for upcoming projects of Vingroup (Vincity Gia Lam, Vincity Tay Mo Dai Mo, Vincit

In 1Q2018, HPG revenue and net profit reached VND 13,161 billion (+26.1% yoy) and VND 2,222 billion (+14.8% yoy) respectively, fulfilling 23.8% and 27.6% company’s revenue and net profit target for 2018. Strong revenue growth in 1Q2018 was attributed to a gain of VND 515 billion from sales of the Mandarin Garden 2 projects (compared to VND 16 billion in 2016) and sales volume of construction steel and steel pipes reached 542,000 tons (+10% yoy) and 148,200 tons (+17% yoy) respectively, and steel price increased. Gross profit margin was 22.8% compared to 23.9% in the same period in 2017, gross profit margin slightly lower than the same period last year due to the profit from the iron ore hedging contract of about VND 700 billion in 1Q2017. Other expenses have not changed compared to 2017.

Most of non-recurring items recorded during 2018 would lead to less room for abnormal recording in 2019 and afterward. From now on, therefore, it would be more difficult for ACB to achieve the infrequently high growth as the last 2 years. Non-interest income is forecast to slowdown because the sources of growth in the last 2 years, which mostly comprise of losses recovery, would be less abundant since 2019. Retail lending, which focuses on mortgage car loans, is expected to withhold its position as the leading activities like in the last 2 years’ figures and follow the general trend within banking industry. Beside, digital banking progress in “Future bank” strategy will be kept highly invested and expanded. Cost of funding pressure would be more prominent in 2019 due to many reasons: 1) Global interest rate hike and trade conflicts; 2) Domestic bond yield is forecast to stay in growing trend; 3) Drastic competition in customers deposit with rising compression from SOE-ban

In 1H2018, HBC earned a revenue of VND 8,079bn (+19.6% yoy, completng 41.1% of annual plan) and net proft of VND 294.6bn (-22.0% yoy, completng 30% of annual plan). Gross proft margin went down from 10.9% in 1H2017 to 9.6% in 1H2018 due to factors including an increase in social insurance because of new Government’s policy, a rise in price of input materials, a drop in selling price due to compettve pressures and temporary discontnuaton of some constructon projects as a result of developers’ issues. Revenue and net proft of HBC in 2H2018 is expected to reach VND 11,500bn ((+23.9% yoy) and VND 692 bn (+42.9% yoy, including earnings from project transferring), proft from core business is projected to be VND 418bn (-13.6% yoy). Therefore, we recommend a HOLD to HBC with a target price of VND21,900/share, equivalent to estmated PE of 6.0x. This price is considered reasonable based on HBC’s business conditons, 1H2018 performance as well as 2H2018 outlook of constructon sector.