[BSC Vietnam] Happy Thanksgiving! And Enjoy The Midcap Flow (DIG) 24.11.2017 (DELAYED)

|Includes: VanEck Vectors Vietnam ETF (VNM)

Summary

  • The leader again is energy (+2.68%) while crude prices are little changed.  Trading value:  324.03 USD mil.    Derivative market Trading value: USD 58.40  million.
  • DIG (VND 17,600, +2%, market cap USD 190 million). DIG has the largest clean land bank among listed real estate firms in Vung Tau, and in our “Divestment” theme this year.
  • Thanksgiving and enjoy midcap flow.  Bluechips and large cap push VNindex rise over 140 point (~16%) in the last 2 months and enlist Vietnam in the top 5 performing market YTD.
  • Our TA notice me that he believe midcap and small cap (in term of size) and construction and real estate (in term of sector) will likely to enter “yearend rally”.

Dear valued Clients and partners

·         The leader again is energy (+2.68%) while crude prices are little changed in ahead of next week’s meeting between OPEC and Russia in Vienna. Although Vnindex had a pullback, most sectors end in the green (8/10) thanks to Material (+1.55%), Utilities (+1.48%) and industries (+1.45%). The only loser is real estate as the biggest stock – VIC correct (but other stocks start spackling). Trading value reached 324.03 USD mil thanks to VNM put through of USD 49.46 mil

Today’s Markets:

·         Indexes, VN-Index +0.20%, HNX-Index +0.59%,  Upcom -0.29%

·         Active: HOSE: FLC, DXG, HQC, DIG, HPG.   HNX:  PVS, SHB, CEO, KLF, HUT.

·         Foreigner, Buy: HPG, DXG, VJC, CTD, SSI.  Sell: DIG, MSN, GAS, SLG, BMP.

·         Notice stocks: HPG, ROS, REE, FLC, CTG, DXG, PVS, VGC, PIV

·         Trading volume: ~ 289.1  million shares

·         Trading value: VND 7268.12 bil ~ 324.03 USD mil

·         Foreigner transaction Net: -5.21 mil USD Sell 79.30 USD million and Buy 74.09  USD million

·         Derivative market: Total contracts: 13,862 contracts   Trading value: VND 1,310 billion ~ USD 58.40  million

Corporate update:

 

·         DIG (VND 17,600, +2%, market cap USD 190 million). DIG has the largest clean land bank among listed real estate firms in Vung Tau, and in our “Divestment” theme this year. Ministry of Construction has registered to sell all 118.26 million shares, equivalent to ownership of 49.65% stake in DIG.The transaction was conducted from 17/11/2017 to 16/12/2017 by agreement / order matching method. Divestment price of Ministry of Construction:Minimum price 15,000 VND. A successful divestment will be a driving force which help DIG improving its business results in the coming years.

Currently, DIG is focusing on 8 major projects with the total area of nearly 1,000 hectares. In addition DIG has a number of other land funds, which estimated to be about 1,042 ha, are in the process of applying for an investment license. The total compensation area is estimated at 440 hectares

Our analyst estimates that FY2017 sales will reach VND 1,595 billion (+38% yoy), driven mainly by real estate sales growth of 106% compare to VND 919.6 billion in FY2016. EAT is expected to reach VND 146.4 billion (excluding extraordinary profit from transfer of Dai Phuoc project we estimate thatDIG will be able to book another VND 75 billion profit from Dai Phuoc Lotus project), exceeding 22% of the target, equivalent to EPS of 2017 = VND 616/share, book value is estimated at VND 12,158/share.

The positive outlook for 2018 is thank to accounting for a number of key real estate projects such as DIC Phoenix, Vung Tau Gateway, The Landmark (block B), and the rest of Hiep Phuoc and Nam Vinh Yen residential areas. Our analyst forecasts that sales will increase sharply by VND 4,179 billion (+162% yoy), mainly driven by a sharp improvement in real estate sales to VND 3,418 billion. EAT is expected to gain VND 276 billion, equivalent to EPS of 2018 = VND 1,030 /share.

Comments:                                             

 

·         Thanksgiving and enjoy midcap flow.  Bluechips and large cap push VNindex rise over 140 point (~16%) in the last 2 months and enlist Vietnam in the top 5 performing market YTD. At the same time most investors complain about the underperformed mid and small cap. As it is already thanksgiving and Bluechip’s valuation stand at high level, the cash flow seems start flow to smaller stocks. Our TA notice me that he believe midcap and small cap (in term of size) and construction and real estate (in term of sector) will likely to enter “yearend rally”.

The Rectangle Map of VNindex’s stock movement (24th Nov 2017)

Source: Cafef.vn (bluechips on the left, small cap on the right)

 

Happy Thanksgiving! And enjoy the Midcap flow

Cheers

Long Tran

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