[BSC Vietnam] On Stranger Tides (KBC) 11.09.2017 (Delayed)

|Includes: VanEck Vectors Vietnam ETF (VNM)

Summary

  • Less-than-feared impact from Hurricane Irma and no new missile tests from North Korea, Vietnam stock market today while 8/10 sectors sank in the red.  VN-Index -0.47% Trading value 188.17 mil USD
  • KBC  (VND 15,200 /share, +1%, Market capital VND 7,093.4 billion).  After visit, our analyst forecast that revenue and PAT at VND 1,870 billion (-5% YoY) and VND 850 billion (+18%)
  • On stranger tides. We has been in the situation that stranger than ever. (1) The anti-corruption campaign climb higher last week with the Former deputy governor of State Bank prosecuted
  • VNindex still rise to 800 points (10 year top) thanks to blue chips in recent weeks.SAB, GAS, MSN and VIC counted for most of the gain
  • The stocks news and rumor: There is a rumor on MSN and MSR, update on FPT (FTG deal) and ETF trading forecast

Dear Value clients and partners,

·         Less-than-feared impact from Hurricane Irma and no new missile tests from North Korea have animal spirits disappear in the 11/09, when the insurers in the US have the biggest rallies for quite some time. Sadly it was not the case in Vietnam stock market today while 8/10 sectors sank in the red, led by Utilities (-1.83%), Real estate (-1.62%), Energy (-1.58%) and material (-1.45%). The only defenders again were Health care (+0.09%) and consumer discretionary (+0.15%)

 

Today’s Markets:

·         Indexes, VN-Index -0.47%, HNX-Index -0.99%,  Upcom -0.09%

·         Active: HOSE: FLC, HQC, DXG, FIT, ROS.   HNX: SHB, KLF, ACB, VC3, SHS

·         Foreigner, Buy: MSN, SBT, VJC, SSI, HBC.  Sell: VNM, BMP, VCB, NVL, DXG.

·         Notice stocks:  DXG, MSN, VJC, VNM, MWG, SEB, SHB, VC3, VCS

·         Trading volume: ~194.75 million shares

·         Trading value: VND 4220.28 ~ 188.17 USD mil

·         Foreigner transaction Net: 3.20 mil USD Sell 19.78 USD million and Buy 22.98  USD million

Corporate update:

 

·         KBC  (VND 15,200 /share, +1%, Market capital VND 7,093.4 billion).  After visit, our analyst forecast that 2017 will be a normal profit financial year for KBC due to sold out of the well-located land fund in the Industrial Park (IP), while the remaining lots will take longer working time to find the suitable investors and new projects are under construction (Nam Son – Hap Linh) or waiting for the Land conversion permit (Trang Due 3). In 2017, KBC will start to recognize revenue from Urban Area (UA) development business. Of which, Phuc Ninh UA deserves the most attention with the sales of 1.5 ha villa area and preparation for 1 ha hotel construction area.

Revenue for the first half of 2017 reached VND 484.34 billion since most of the planned projects sales are expected to be recognized in the second half of 2017. Since 2017, KBC will recognize development business with both IPs and UAs, thus gross profit margin is expected to decrease to below 50% compared with 55% in 2016. With current situation, revenue and profit after tax is estimated at VND 1,870 billion (-5% YoY) and VND 850 billion (+ 19.6% YoY) respectively, equivalent to EPS of VND 1,800 for 2017.

Comments:                                                         

·         On stranger tides. We has been in the situation that stranger than ever. (1) The anti-corruption campaign climb higher last week with the Former deputy governor of State Bank prosecuted. Anything near that type of news could easily hammer the market in the past. But (2) VNindex still rise to 800 points (10 year top) thanks to blue chips in recent weeks.SABGASMSN and VIC counted for most of the gain in Vnindex last week while midcaps suffered. Meanwhile (3) It is the first time I hear no plan to bottom fishing ETF exclude stocks (FTSE Vietnam inclusive PLX, Vaneck Vietnam ETF inclusiveHBC, exclusive FLC) link. Let see how the stranger tides take us to.

·         The stocks news and rumor: There is a rumor on MSN and MSR that the listing process of Techcombank and the divestment of NuiPhao are pushed. Furthermore, our analyst updated that price of vonfram has been rising for months. Later today, FPT announce their basic plan to divest FPT Trading in 2017 by (1) Selling 47% to a strategic shareholder (2Selling a maximum of 5% to FPT Trading’s employees and (3) they believed the valuation of FPT Trading is no less than USD 80 million.

Cheers

Long Tran

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