[BSC Vietnam] Will IPO Weaken The Money Flow For Listed Market (NTC) 27.07.2017 (DELAYED)

Jul. 27, 2017 10:51 PM ET

Summary

Stocks closed with small loss in July 27th which is the day to honor the men and women who scarified for the country. VN-Index -0.31% Trading value: USD184.93 mil

The IT sector (+0.83%) easily topped today’s leaderboard, sparked by FPT +0.8% (TP 54000) and CMG +2.9% (TP 18,900) surge (which our analyst are always bullish on).

NTC – 61,500 VND/share – Mkt Cap $43 mil – P/B 3x – PE 7.5x. has 430 hectares of Industrial land, phase 2 of 240 hectares. Leasing rent has increased40-50USDto70USD

Coming months (1) “listing OTC stocks” (Viettel Post, Viettel Global, Viettel Construction, KDF, VCI, HD Bank, LVPB, May Viet Thang, Phong Phu Garment .), (2)”Equitized state-owned enterprise” (Binh Son refinery, PVoil, PV power…) and (3) the successful Private placement

please be aware that coming IPO will weaken the money flow for listed market at least in short term.

  • Stocks closed with small loss in July 27th which is the day to honor the men and women who scarified for the country. In the US, the Fed left short-term interest rates unchanged as expected and indicated it likely would begin soon to start trimming its balance sheet. The IT sector (+0.83%) easily topped today’s leaderboard, sparked by FPT +0.8% (TP 54000) and CMG +2.9% (TP 18,900) surge (which our analyst are always bullish on). The healthcare sector (-0.97%), Utilities (-0.99%) and industry (-0.4%) weighed on the broader market. The energy sectors have a slight recovery, as U.S. crude oil climbed 1.8% to $48.73/bbl following the EIA’s latest crude inventory report, which showed a much larger than expected draw in U.S. stockpiles for the week.

Today’s Markets:

  • Indexes, VN-Index -0.31%, Hnx-Index +0.20%, Upcom +0.96%
  • Active: HOSE: FLC, DXG, FIT, HQC, and OGC.   HNX: KLF, KVC, SHB, PVX, SPI.
  • Foreigner, Buy: VCI, VNM, HPG, HCM, HBC.  Sell: PLX, SSI, CTG, MSN, and HSG.
  • Notice stocks: ROS, FLC, DXG, NVL, BID, PVS, VCS
  • Trading volume: ~ 270.3 million shares
  • Trading value: VND 4147.94 ~ 184.93 USD mil
  • Foreigner transaction Net: 2.37 mil USD Sell 11.17 USD million and Buy 13.54 USD million

 

Corporate update:

 

  • NTC – 61,500 VND/share – Mkt Cap $43 mil – P/B 3x – PE 7.5x. NTC currently has 430 hectares of leasing Industrial commercial land, which is 99% filled currently. The leasing rent has increased from $40 – 50 to $70/m2 in 2017, which reflects the high demand of IZ leasing in Binh Duong province. As of 30/6/2017, NTC has VND 1,962 bil of unearned revenue (increase by VND 300 Bil from the year beginning). The company currently holds 1,024 Bil of cash and VND 841 bil of net cash, equivalent to VND 52,000/share of net cash.

Prospect of NTC in the coming years come from the expansion phase 2 of Nam Tan Uyen – 240 hectares of commercial land, which is 56% increase in NTC current capacity. The capital investment is expected at VND 870 bil (not yet include the land tax). The project is expected to have official authorization in 4Q2017 and started to record revenue in 2018. We note that the new area is likely to yield less profit compared to the current field due to (1) increasing competition leads to limited ability to increase rental price and (2) higher land tax and higher land compensation leads to significantly higher cost.

Comments:                                                         

  • Investment topics related to (1) “listing OTC stocks” (Viettel Post, Viettel Global, Viettel Construction, KDF, VCI, HD Bank, LVPB, May Viet Thang, Phong Phu Garment …), (2)“Equitized state-owned enterprise”(Binh Son refinery, PVoil, PV power…) and (3) the successful Private placement of VPBank and few other companies will continue to be the story of market attention, and will become stronger as the equitizing and listing process accelerates in the end of Q3 and beginning of Q4 2017. These factors are good for the market in long-term. But, please be aware that coming IPO will weaken the money flow for listed market at least in short term.

Cheers

Long Tran

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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