[BSC Vietnam] What Happened During National Assembly? (CTD) 24.10.2017 (DELAYED)

|Includes: VanEck Vectors Vietnam ETF (VNM)

Summary

  • Indexes, VN-Index +0.63%, Trading value: VND 6719.13 bil ~ 299.04 USD mil-> thanks to VNM put through of close to USD 120 mil. 8/10 sectors advanced
  • CTD (VND 210,000 VND, +1%, Mkt cap USD 0.66 bil). Maintain BUY recommendations with the target of VND 254,500/share.
  • Vietnam opened the National Assembly meeting for 1 month. From 2011, 8/15 times the stock market drop, most of the time the Vnindex fluctuate average +-3% are you ready?
  • The Q3/2017 business result of 248 companies on the HSX and HNX, total EAT of 10,034 billion, up 25% over the same period of 2016.  Profit rise came mainly from banking and real Estate stocks

Dear Valued clients and partners,

  • VNindex have a quick recovery in late afternoon trading section and the foreign creased selling. Interm of sectors, Industry (+2.09%) stayed at the top of the board while health care sector closed at the bottom of -2.16%. 8/10 sectors advanced with the rise of Utilities (+1.88%) and Consumer Discretionary (+1.16%)

Today’s Markets:

·         Indexes, VN-Index +0.63%, HNX-Index +0.42%,  Upcom -0.92%

·         Active: HOSE: FLC, HQC, DXG, KBC, HAI.   HNX: KLF, SHB, PVS, ACB, VCG

·         Foreigner, Buy: GAS, LDG, LCG, BMP, NLG .  Sell: KBC, MSN, SAB, DXG, HPG.

·         Notice stocks:  ROS,  FLC, VNM, DXG, REE, ACB, PVS, PVI

·         Trading volume: ~223.17  million shares

·         Trading value: VND 6719.13 bil ~ 299.04 USD mil-> thanks to VNM put through of close to USD 120 mil

·         Foreigner transaction Net: 0.13 mil USD Sell 140.56 USD million and Buy 140.69USD million

·         Futures: VN30F1711 813, VN30F1712 817.1, VN30F1803 822.8, VN30F1806 827.3; Trading value: VND 1262.3billion ~ USD 56.18  million

Corporate update:

 

·         CTD (VND 210,000 VND, +1%, Mkt cap USD 0.66 bil). Maintain BUY recommendations with the target of VND 254,500/share within 12 months.

Business result update 9M2017. Net revenue and net profit after tax was VND 18.185 billion (+35.1% yoy) and VND 1,190 billion (+23.8% yoy) respectively fulfilling 67.4% and 68% of CTD’s target. Revenue’s structure of 9M17 didn’t change much, with the apartment segment still contributing 73% compared to 71% in the same period. Gross profit of 9M17 reached VND 1.447 billion (+21.5% yoy), gross profit margin of 9M17 decreased to 8.0% compared to 8.8% in the same period due to the increase in input materials prices (iron, steel, sand, stone, etc) in recent times and some other causes. BSC think that although raw material prices have increased sharply compared to the beginning of the year, CTD still maintains a good gross profit margin. We expect CTD will continue to maintain this level of gross profit margin for 2018.  Thanks to abundant cash and financial investments, CTD’s net financial income in 9M2017 increased sharply to VND 237 billion (+114% yoy).

(1)   Construction: By the end of September 2017, the total contract value reached VND 21,295 billion excluding the Vinfast project (just started on 20/10/2017 – The total investment capital of the Vinfast project was about USD 3.5 billion, Dung Quat Iron and Steel Complex project of HPG and Vincity SG project – expected to start in 2017 end). The total value of backlog in 9M/2017 reached VND 25.567 billion (+25% yoy).

(2)   BOT infrastructure: Currently, this field is still in the research stage and finding projects which are suitable for the construction capacity of CTD’s implementation due to new BOT projects in the recent period is facing many difficulties.

(3)   Real estate for lease: Previously, on 24/08/2017, CTD has decided to increase capital of Convestcons from VND 26 billion to VND 1,872 billion to invest in some potential real estate projects for lease. According to the latest update from CTD, the company is currently implementing 5 projects with profit will be recorded in the end of 2017 and Q1/2018.

BSC forecasts revenue and EAT of CTD are about VND 27,501 billion (+32% yoy) and VND 1,730 billion (+24.5% yoy) respectively. EPS FW 2017 is expected to reach VND 20,773 (assuming that the bonus and welfare fund equivalent to 2017 is 7.5% of EAT). Total value of backlog which transfer to 2018-2019 is estimated at VND 25,408 billion.

Comments:                                             

 

·         What happened in the market during National Assembly? On 23rd Oct, Vietnam opened the National Assembly meeting for 1 month. Our team gave me an interesting statistic of Vietnam’s stock market performance during National Assembly (which happened twice a year). From 2011, 8/15 times the stock market drop but most of the time the Vnindex fluctuate much more than normal months. There is only one time in 2016, the main index drop less than 0.5%. So are you ready for this wild ride?

·         The Q3/2017 business result updated. There were 248 companies on the HSX and HNX announce the third quarter’s result to 248 with a total EAT of 10,034 billion, up 25% over the same period of 2016. Profit rise came mainly from banking and real Estate stocks when VPB and VCB increased by VND 527 billion and VND 507 billion while DXG and VPH increased by VND 252 and 174 billion respectively. Conversely, aquaculture companies including HVG and ANV decreased 191 and 91 billion, tire companies DRC and CSM decreased 83 and 56 billion.

% change during National Assembly
Number Open Close VN-Index HNX-Index
1 21/07/2011 05/8/2011 -4.6% -4.5%
2 21/10/2011 26/11/2011 -5.4% -9.7%
3 21/05/2012 21/06/2012 -1.7% 0.2%
4 22/10/2012 23/11/2012 -4.0% -6.4%
5 20/05/2013 21/06/2013 2.3% 6.2%
6 21/10/2013 29/11/2013 1.2% 6.0%
7 20/05/2014 24/06/2014 7.3% 5.5%
8 20/10/2014 28/11/2014 -3.7% -0.3%
9 20/05/2015 26/06/2015 5.7% 7.8%
10 20/10/2015 27/11/2015 -1.2% 0.6%
11 21/03/2016 12/04/2016 1.3% 0.2%
12 20/07/2016 29/07/2016 -1.2% -2.1%
13 20/10/2016 23/11/2016 -0.4% -4.3%
14 22/05/2017 21/06/2017 3.1% 6.4%
15 23/10/2017 24/11/2017 ? ?
Average     -0.1% 0.4%

Cheers

 

Long Tran

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