[Long’s View] The Three Musketeers (BSR) 23.02.2018 (DELAYED)

Mar. 8, 2018 1:45 AM ET|Includes: VanEck Vectors Vietnam ETF (VNM)

Summary

  • It is great to back to the market with our dear clients after a long holiday. Market closed the first week after the lunar new year, in a high note.
  • BSR Binh Son Refinery (Market cap USD 3,05 bil – listing price VND 24,400/share). We are proud to be advisor of the IPO of BSR – the biggest refinery.
  • The Three Musketeers. It is a historical novel by Alexandre Dumas, but for me it is more than that.The Gov decided to IPO 3 of the biggest subsidiaries,BSR,PVPower, PVoil.
  • Will they join GAS in the elite stocks, and lead the energy & utilities squad (PVD, PVS, PVI, PVT, NT2…) in the listing market and fight again for the market? “One for all and all for one”.

Dear Value Clients and partners;

· It is great to back to the market with our dear clients after a long holiday. Market closed the first week after the lunar new year, in a high note of +2.49% for the day. Trading volume was back to over $300 million again, but foreigner net sold $-13.7 Million. In term of sectors, all 10/10 end in the green, led by Energy (+5.45%), Finance (+3.972%), Material (+3.52%) and IT (+ 3.44%)… Industry, Consumer staple and healthcare slightly gained less than a percent.

Today’s Markets:

· Indexes, VN-Index +2.49%, HNX-Index +1.24%, Upcom +0.43%

· Active: HOSE: CTG, STB, HPG, MBB, SCR. HNX: SHB, PVS, ACB, VCG, PVX.

· Foreigner, Buy: VIC, DXG, BVH, VJC, LDG. Sell: HPG, VRE, BID, HDB, IDI.

· Notice stocks: HPG, CTG, VCB, MBB, NVL, PLX, ACB, BID, DXG

· Trading volume: ~ 237.03 million shares

· Trading value: VND 6868.86 bil ~ 306.06 USD mil

· Foreigner transaction Net: -13.74 mil USD Sell 44.70 USD million and Buy 30.96 USD million

· Derivative market Trading value: USD 141.20 million , VN30F1803 @ 1106; VN30F1804 @1115; VN30F1806 @ 1120; VN30F1809 @ 1157

Corporate update:

· BSR Binh Son Refinery (Market cap USD 3,05 bil – listing price VND 24,400/share). We are proud to be advisor of the IPO of BSR – the biggest refinery (and the only one up to now) in Vietnam. BSR’s input capacity is 6.5 million ton of crude oil (mostly from Vietnam’s oil field) and provide ~ 30% of gasoline, DO, (via PLX Petrolimex, OIL PVoil which together control 70% of Vietnam’s retail gasoline) and LPG, 9% of Jet A1; 15% of PP for domestic market. The stocks will be listed on Upcom on March 01st2018, with the starting price of USD 22,400 per share (~ trailing P/E 8.0). Reports are here (English|Vietnamese). Investment highlights:

Vietnam continues to be a net importer of oil products in the upcoming 5 years. According to McKenzie in 2015, from 2019-2021, Vietnam still has to import a 30-33% of refining products and 33-42% of its demand in 2022-2025.

o Corporate income tax (CIT) incentives extend to 2040. The CIT rate is 10% for 30 years, tax exemption for the first 4 years and a 50% reduction in the next 9 years starting from the first year of taxable income.

Improve efficiency. Utilization 110%, can run up to 120%. In Dec, 2014, 1.092 tons of crude oil à 1 tons of products. In August, 2017, 1.081 tons of crude oil à 1 tons of products.

Upgrade and expansion project. BSR plans to invest approximately $ 1.8 billion in the upgrade and expansion project, 30% capacity increase to 8.5 million tons of crude oil per year, scheduled to operate at the end of 2021. After the upgrade, the plant can process a wider range of crude oil input and products will be able to meet Euro 5 emission requirements

Investment risk: Exchange rate risk; deposit at Oceanbank; BSR-BF

Comments:

· The Three Musketeers. It is a historical novel by Alexandre Dumas, but for me it is more than that. I was inspired by the story and I remember holding plastic swords (now I know it made from crude oil too :D) and fighting with neighbors boys.

· It recounts the adventures of a young man named d’Artagnan (based on Charles de Batz-Castelmore d’Artagnan) after he leaves home to travel to Paris, to join the Musketeers of the Guard. Although d’Artagnan is not able to join this elite corps immediately, he befriends the three most formidable musketeers of the age—Athos, Porthos and Aramis.

· The Gov decided to IPO 3 of the biggest subsidiaries of PetroVietnam (PVN) on 8th Dec 2017 (quite sensitive date) which are PVPower, PVoil and BSR. Together, the 3 Musketeers will make 3 of the biggest state own companies IPO in Vietnam which are around USD 700 million of IPO and around USD 3,5 billion reserved for strategic partners. They will be listed in Upcom index very soon this March (the rumor of listing date and price are BSR on Mar 01st @ VND20,400; OIL Mar 09th @ VND20,500 and POW Mar 16th @ VND14,900) Will they join GAS in the elite stocks, and lead the energy & utilities squad (PVD, PVS, PVI, PVT, NT2…) in the listing market and fight again for the market? “One for all and all for one”.

Picture of the day 23th March 2018: BSR’s Binh Son refinery Dung Quat, Vietnam

Source: BSR.com.vn

Nice weekend 

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