[BSC Vietnam] On Even Stranger Tides (NT2) 16.11.2017 (DELAYED)

Nov. 21, 2017 2:03 AM ET|Includes: VanEck Vectors Vietnam ETF (VNM)

Summary

  • We have never been any closer to 2007 top for the last 10 years (only 280 points to break). Trading value: 272.25 USD mil. Derivative market: ~ USD 59.96 million.
  • NT2 (VND 30,800 per share; -1%; Market cap USD 400 million). Accumulative 9M2017, NT2 sales reached VND 4,687 billion (+5% yoy).NT2 has announced its business plan in 2018.
  • On Even Stranger Tides. The movie is good but the market is better.  Only 2 month since our similar email on 11th Sept 2017 (link), VNindex climb almost a hundred points, and.
  • Where can we go from here on those even Stranger tides? Let take a look at the futures (link). VN30 futures stand at 903 (12/17), 909 (01/18), 935 (03/18) and 958 (06/18). transaction fee : BSC will offer free services until year end.

Dear Valued Clients and Partners, 

·         U.S. crude oil slipped another 0.4% to settle at $55.11/bbl, extending this week’s loss to 3%; the energy sectors in VN also drop 1,4% today. The drop spread to 9/10 sectors from – 0.31% to -1.4% while real estate is the only greener (+1.29%). Although, the Vnindex end this week with slight fall, market sentiment are quite positive. We have never been any closer to 2007 top for the last 10 years (only 280 points to break). The bull is a gift for my Birthday (in case you wonder)

 

Today’s Markets:

·         Indexes, VN-Index -0.24%, HNX-Index +0.02%, Upcom -0.17%

·         Active: HOSE: VRE, FLC, HQC, MBB, OGC.  HNX: SHB, PVS, VCG, CEO, KLF.

·         Foreigner, Buy: VNM, VCB, PC1, VJC, HPG. Sell: VRE, VIC, SBT, MSN, BVH .

·         Notice stocks: VRE, FPT, ROS, PNJ, SHB, VCG, PVS, ACB

·         Trading volume: ~ 247.44 million shares

·         Trading value: VND 6,111.07 bil ~ 272.25 USD mil

·         Foreigner transaction Net: -9.26 mil USD Sell 72.65 USD million and Buy 63.39 USD million

·         Derivative market: Total contracts: 14,920 contracts, Trading value: VND 1,346 billion ~ USD 59.96 million

Corporate update:

 

·         NT2 (VND 30,800 per share; -1%; Market cap USD 400 million). Our analyst updated:

 

Business results 9M2017 – The fluctuation of the EUR exchange rate and low volume of electricity remained its influences. Accumulative 9M2017, NT2 sales reached VND 4,687 billion (+5% yoy). Electricity output of 9M2017 reached 3.037 million kWh (-25% yoy), mainly due to the sharp increase in the volume of hydroelectricity in the region during the first nine months of the year leading the decrease in the amount of mobilized electricity from gas thermal power. Average gasoline price in September was USD 6.05/mil. BTU (USD 4.25/mil. BTU in September), which helped the revenue growth, but gross profit margin decreasing from 24.8% to 20.3% led gross profit only reached VND 951 billion (-14% yoy). In addition, financial expenses surged to VND 411 billion (compared with VND 203 billion of the same period of 2016) mainly because EUR/VND rate increased sharply by 11% compared to the beginning of the year. In 30/9/2017, NT2 has outstanding loans of more than USD 89 million and EUR 81 million.

Completing overhaul 6 days faster. NT2 updated the completion of the first overhaul of about 6 days faster, the capacity increased by 24MW. BSC noted that the total overhaul cost was about VND 173 billion (equivalent to less than 60% of the expectation), saving VND 143 billion, which is expected to be accounted directly to profit by allocating in several years.

Business results in October 2017 reached the highest record thanks to (1) Completion of overhaul on 02/10/2017 and (2) Operating out of the competition of electricity market. Specifically, the electricity output in October reached 482.7 million KWh, accumulated in October reached 3.519 million KWh. Revenue before VAT in October reached VND 700 billion, EBT is expected at VND 120 billion

Expected business results in 2017. NT2 said that production output in the fourth quarter is expected to reach 1.282 million KWh, 4.319 million KWh for the whole year. Revenue and profit after tax in Q4 reached VND 2,002 billion (-43.2% yoy) and VND 248 billion (+10.1% yoy) respectively. It is estimated that FY2017 sales and net profit came to VND 6,689 billion (-16.2% yoy) and VND 738 billion (-32% yoy), equivalent to EPS of VND 2,563.

Update 2018 business plan. NT2 has announced its business plan in 2018 with the expected output of 4,500 million kWh, total revenue of VND 6,812.6 billion (+1.83% of the estimated number in 2017), profit from producing segments will reach VND 762.1 billion, the profit before tax is VND 767 billion, based on the assumption that the price was USD 6.0659/mil. BTU with the oil price of USD 50/barrel.

Comments:                                             

 

·         On Even Stranger Tides. The movie is good but the market is better.  Only 2 month since our similar email on 11th Sept 2017 (link), VNindex climb almost a hundred points, and be close to 900 already. And similar to last quarter, investor don’t really care for ETF review times like before. SBV keep buying more USD (ytd at USD 7 billion) and the Gov start the divestment process will keep pushing the uptrend.

 

·         Where can we go from here on those even Stranger tides? Let take a look at the futures (link). VN30 futures stand at 903 (12/17), 909 (01/18), 935 (03/18) and 958 (06/18). Quite impressive right. Total contract traded of futures climb again to ~14,900 contracts after significant drop early November (from top 22,000 contracts to around 8,000 contracts). The drop due to the fact that most broker started to collect transaction fee while BSC will offer free services until year end.

·         Tomorrow is BSC’s 18th birthday, thank you for all the supports J.

 

Cheers

 

Long Tran

 

https://seekingalpha.com/instablog/13489352-long-tran-thang/5074447-bsc-vietnam-even-stranger-tides-nt2-16_11-2017-delayed

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