End of The AGM season (PAC) 28.06.2017

·         Today’s action marked another retreat for the Consumer Discretionary sector (-0.43%), which has rallied this year, followed by ·real estate (-0.12%). U.S. crude oil popped 2% to $44.25/bbl as today open, helped by a weaker dollar which pushed the energy higher (+1.56%). The green team include IT (+1.24%), industry (+0.65%) and Consumer staple (+0.91%)

Today’s Markets:

·         Indexes, VN-Index +0.20%, Hnx-Index +0.34%, Upcom +0.36%

·         Active, HOSE: OGC, ITA, HQC, HAI, FLC.   HNX: SHB, KLF, VCG, PIV, SHS.

·         Foreigner, Buy:  SSI, KDC, GAS, HPG, VCB. Sell: VNM, STB, AAA, DHG, NVL.

·         Notice stocks: OGC, ITA, HQC, HAI, FIT, FCN, DHM, AAA, TSC, PIV, VC3, VAT

·         Trading volume: ~278.5 million shares

·         Trading value: VND  4208.5 ~ 184.3 USD mil

·         Foreigner transaction Net: 4.53 mil USD. Sell 7.73 USD million and Buy 12.26 USD million

Corporate update:

 ·         PAC Pinaco (VND 53,500, -2.7%, Market cap USD 105.5 mil). Recently the top battery producer PAC stock price movements were affected by the 2016 retrospective financial results, which reduced the cost of salaries by VND43.9 billion and the loss job reserve of VND33.9 billion. As a result, the EBT 2016 increased from VND160 billion to VND238 billion (+ VND78 billion). Besides, there was a rumor about the divestment of Vinachem ownership in PAC for Thaco.

 Recorded good result in 1Q 2017 with sales came in at VND692 billion (+ 27.51% yoy, including about 80 billion transferred from 2016 to 1Q 2017). According to the FS, 1Q 2017 revenue reduction was 11.28% (1Q 2016 was 8.69%) while 1Q 2017 gross margin was 10.8% (1Q 2016 was 13.82%). Gross margin is lower due to the fact that Lead and Zinc inventory prices imported in 4Q2016 at high level because of the world traders’ speculation. To improve results in the next quarters, PAC intends to decrease bonus rate for agents. EBT of 1Q2017 reached VND36.85 billion (+ 21.92% yoy).681pd

Sales in 6M2017 is expected to be at VND 1,500bn (+13.45% yoy), production output up 12%, PBT 6M2017 at VND 100bn (of which VND24bn will come from relocation assistance of project 445 – 449 Gia Phu), if excluding this item, EBT 6M2017 increased about 15.15% yoy. In the year 2017, PAC targets sales at VND 2,750 billion (+ 8.4% yoy), pretax profit of VND 165 billion (+ 3% yoy), dividend yield of at least 15%. On 28/06/2017, PAC is traded at VND 53,500, PE trailing = 14x Which our analyst find attractive for an industry leader.

Comment

·         The NAV buy period ?. There is a common belief among retail that the buy sides tend to buy during quarter end and year end (in order to archive higher NAV performance). That belief seems unlikely as Vnindex climb 15.8% and HNX (stay at 98 point which is close to 100 point of 2005) rocket 22.5% ytd.

·         End of The AGM season. By the end of this week, most listed company will finish their AGM. Among the last AGM of the year, ACV, VGT and HAG (HNG) are noticeable stocks. ACV has their PBT target at VND 3,669 billion (+7%) which is quite conservative. The company expects sales of 2017 to grow 25% to VND 13,293 billion while foreign traveller target at 27 million foreigners and 64 million local travellers.

 

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