[BSC Vietnam] Merry Xmas And Happy Trading (DRC) 21.12.2017 (DELAYED)

Summary

  • Market index drops at the very last trading section of the day, VN-Index -0.78%. Trading value : VND 7720.94 bil ~ 340.13 USD mil.
  • DRC (VND 24.200 /share,+ 0.6%, market cap of USD 129 million). The stock of tire  traded at P/E FW ad P/B of 20.7x and 1.88x, respectively. Vinachem plans to divest DRC.
  • A Santa Claus rally is a surge in the price of stocks that often occurs in the last week of December through the first two trading days in January.
  • More anti corruption news has been released recently. But the market is collectively less attentive to news (due to holiday spirit) and as a result, information is incorporated into prices slowly. Hence, we believe that only few direct related stocks could fluctuate more than normal.

Dear Valued clients and partners

·         Market index drops at the very last trading section of the day, due to energy (-2.33%), Consumer discretionary (-1.2%) and industries (-0.98%). people blame the anti corruption news for that sell off. There was only 1/10 sectors increased which was material (+0.1%). And HPG, one of our favorite stocks was the savior again.

Today’s Markets:

·         Indexes : VN-Index -0.78%, HNX-Index -0.33%,  Upcom -0.21%

·         Active : HOSE: ROS, SAB, VRE, DXG, DCM.   HNX: ACB, PVS, PVC, PVB.

·         Foreigner, Buy : HPG, NLG, VRE, MSN, SSI.  Sell: SAB, VIC, VJC, HSG, BVH.

·         Notice stocks : SAB, VRE, DXG, DCM, REE, CII, HAG, MWG, ACB, SHB, HVN, VGC

·         Trading volume : ~ 307.46 million shares

·         Trading value : VND 7720.94 bil ~ 340.13 USD mil

·         Foreigner transaction Net: 10.16 mil USD Sell 18.07 USD million and Buy 28.23 USD million

·         Derivative market Trading value: -14.8% ~ USD 71.17 million; VN30F1712 @   937.8; VN30F1801 @  955; VN30F1803 @  976; VN30F1806 @ 989.9

Corporate update:

 

·         DRC (VND 24.200 /share, + 0.6%, market cap of USD 129 million). The stock was traded at P/E FW ad P/B of 20.7x and 1.88x, respectively. By 9M2017, DRC recorded EBT of VND 31.7 billion, down 70% yoy. We forecast that EBT of DRC in 2017 would be VND 213 billion (-50.1% yoy), equivalent to the EPS2017 of VND 1.170/share.

(1) Total domestic consumption is reduced in both Bias and Radial. Total bias output down by 7% yoy. Radial consumption was 245.877 tires in 9M2017 (68% export). However, the domestic price is 50% higher than export price, therefore, DRC continue loss in Radial (gross margin was -3% in 9M2017).

(2) The rubber input price went up. The average price of Natural Rubber (NR) In 9M2017 is VND 45.300/kg, up 44% compared to the same period of 2016 (VND 31.400/kg). Similarly, the average price of Synthetic Rubber (SR) in 9M2017 is VND 56.300/kg, up 67% compared to the same period of 2016 (VND 33.700/kg). Because of this situation, the gross profit of DRC went down from 19% in 9M2016 to 11% in 9M2017.

(3) Vinachem plans to divest DRC, which pay attention from many investors, some of them is Truong Hai auto.

Comments:  

 

·         A Santa Claus rally is a surge in the price of stocks that often occurs in the last week of December through the first two trading days in January. There are numerous explanations for the Santa Claus Rally phenomenon (which was first recorded by Yale Hirsch in his Stock Trader’s Almanac in 1972), including happiness and people investing their bonuses.

·         More anti corruption news has been released recently. But the market is collectively less attentive to news (due to holiday spirit) and as a result, information is incorporated into prices slowly. Hence, we believe that only few direct related stocks could fluctuate more than normal.

P/S: My email has some technical problem. In the meantime, please contact me via my personal email until it is fixed. Thank you

Picture of the day 21st Dec 2017MERRY XMAS AND HAPPY TRADING



Source: BSC

 Cheers

 

Long Tran

Best regards

Tran Thang Long (Mr.)

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