[BSC Vietnam] The State Divestment Theme Updated (HSG) 09.01.2018 (Delayed)

|Includes: VanEck Vectors Vietnam ETF (VNM)

Summary

  • As the market busy with anticorruption trial in bank and oil&Gas, it is hilarious that these sector keep outperformed lately. VN-Index +1.04%. Trading value: VND 9225.66 bil ~ 411.56 USD.
  • HSG (Mkt Cap VND 8,574 bil– PE FW 2018 4.95x – PB FW 1.13– FO 25.31%). Our analyst target the stock at VND 33,200 as the second largest steel industry.
  • Decree 01/2018 the guideline about the economy policy of 2018 was announced last week. Some high light points: GDP 6,7%; CPI <4%; Gov’s budget deficit 3,7% GDP, public debt 63,9%;
  • The GOV said that they will continuous to promote the equitization process associated with listing on the stock market and divesting.
  • Table of the day 09 Jan 2018: List of SOEs to be under the management of “State capital management committee”.

Dear Value Clients and partners;

·         As the market busy with anticorruption trial in bank and oil&Gas, it is hilarious that these sector keep outperformed lately. I guess the market have its own magical reasons. It is hard to find a true leader of the market today as most sectors jump. Material (+4.9%), Energy (+4.77%), IT (+1.91%) and Finance (+1.8%). Steel makers again closed limited up with HPG and HSG.

Today’s Markets:

·         Indexes, VN-Index +1.04%, HNX-Index +0.88%,  Upcom -0.12%

·         Active: HOSE: STB, FLC, HSG, SBT, MBB.   HNX:  SHB, PVS, PVX, KLF, ACB.

·         Foreigner, Buy:VIC, HPG, DXG, VCB, BID.  Sell:VNM, SSI, DHG, VRE, SCR

·         Notice stocks:  STB, HPG, HSG, VIC, FPT, MBB, SBT, VPB, SHB, HUT, PVX

·         Trading volume: ~ 413.45 million shares

·         Trading value: VND 9225.66 bil ~ 411.56 USD mil

·         Foreigner transaction Net: 7.02  mil USD Sell 45.62 USD million and Buy 52.65 USD million

·         Derivative market Trading value: VND 1,936 billion ~ USD 86.36 million;  VN30F1712 @ 1042; VN30F1801 @1050; VN30F1803 @ 1055.9; VN30F1806 @ 1071.9

Corporate update:

 

·         HSG (Mkt Cap VND 8,574 bil– PE FW 2018 4.95x – PB FW 1.13– FO 25.31%). Our analyst target the stock at VND 33,200.

The second largest steel industry and the leading galvanised industry. HSG’s galvanized steel sheet consumption now stands at 1.2 million tonnes, leading the industry, outperforming rivals and will continue to increase strongly in the near future (Capacity is expected to double by 2020). The market share of HSG in 2017 is 33.5%, leading the market with more than 340 retail branches (opened more than 100 branches this year).

Plastic pipe sector will contribute to HSG’s earnings in the coming time. Although HSG has started to produce plastic pipes, HSG has been able to compete with big players in the industry such as BMP and NTP. The current market share of HSG is about 8% and after dominating the market, the company will reduce the discount policy to increase profit from the plastic pipe segment.

Similar to other galvanizing companies such as NKG, HSG also benefited from low domestic HRC supply from Formosa and Dung Quat steel project in Hoa Phat.

US anti-dumping tax on steel: According to statistics of the Viet Nam Steel Association, the export of steel sheet export of Vietnam to the US market is about 200,000 tons per year. Most of them are Hoa Sen, Ton Dong A and VSC, all of whom have a localization rate of over 40% so Effects on business result only in the short term.

Comments:      

 

·      Decree 01/2018 the guideline about the economy policy of 2018 was announced last week. Some high light points: GDP 6,7%; CPI <4%; Gov’s budget deficit 3,7% GDP, public debt 63,9%; Gov’s debt 52,5% and foreign debt 47,6% GDP; Import and export + 8-10% ; net import<3%; Gov’s spending: Investment 26%; normal spending 64,1%. (link)

·         The State divestment theme updated. The GOV said that they will continuous to promote the equitization process associated with listing on the stock market and divesting state capital in SOE which the State does not need to hold in accordance with market principles, publicity, transparency, the highest benefit of the State. The Gov will initiate “State capital management committee”- the super committee to manage all almost all of the biggest SOEs (top 30) this year whose asset is close to VND 220 billion. (The list is below and I am sorry that it is in Vietnamese only).

Table of the day 09 Jan 2018: List of SOEs to be under the management of “State capital management committee”

sieubo

https://seekingalpha.com/instablog/13489352-long-tran-thang/5099943-bsc-vietnam-state-divestment-theme-updated-hsg-09_01-2018-delayed

Cheers

 

Long Tran

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