[Long’s View] May in a minute (PVD) 05.06.2018 (delayed)

Dear Value Clients and partners;

·         It is great to be back to the office while the stocks are recovering. Top defensive sectors climb the most as Consumer staple, Discretionary both rise over 4.4% and health care jump 3.5%. On the other hand, real estate is the only lagger of -0.52%. The rest of the sector mostly end with 0.5% to over 1.5% growth.
Today’s Markets
·         Indexes : VN-Index 0.88%, HNX-Index -0.11%, Upcom -0.05%
·         Active : HOSE: HPG, VPB, CTG, VCB, SSI   HNX: ACB, PVS, SHB, CEO, VGC
·         Index movers : Leader: GAS, SAB, PLX, VNM, VIC Laggard: TCB, VCB, HPG, VRE, BID
·         Foreigner, Buy: VNM, VHC, CTD, HDB, BVH.  Sell: VHM, MSC, DHG, HSG, GAS
·         Notice stocks : HPG, CTG, MSN, DXG, TCB, GAS, STB, HSG, CTD, PVS
·         Trading volume : ~ 292.6 million shares
·         Trading value : VND 9112.3 bil ~ 399.7 USD mil
·         Foreigner transaction Net: -2.7 mil USD Sell 44.8 USD million and Buy 42.1 USD million
·         Derivative market Total contracts: 80298 contracts, Trading value ~ USD 347.3 million,
·         VN30F1806@ 990; VN30F1807@ 1005; VN30F1809@ 1005.1; VN30F1812@ 1029.8
Corporate update:
PVD – Tracking Market cap USD 235 mil – Current price VND 14,650/share + 7% – PB FW 0.42x – FO 25%. Although our analyst is bullish with energy, we are still very caution about PVD. Investment highlights
·         The business situation is forecasted to continue going down in 2018, 4 jack-up rigs (PVD1, 2, 3 and 6) are in operation with the rental fee of USD 55,000 per day (below breakeven points). TAD Rig (PVD 5) is waiting for the Red Emperor project, the break-even price of this rig is about USD 80 – 90,000 per day.
·         Outstanding loan with PVEP of around VND 1,000 billion is currently difficult to recover. The provisions for the year 2016 was VND 180 billion, 2017 was 170 billion, thus the reversal may be about 350 billion if PVD can collect the loan. If not, the provision for the year 2018 will be more than VND 600 billion
·         Catalyst: PVD V (TAD Rig) having job from 2019 (Ca Rong Do Project), collecting loan from PVEP and reversal of provisions
·         Risk: lose in 2018, extra provision for bad debts of PVEP, oil fluctuate
·         May in a minute.  Macro Flash: good: PMI at 53.9 points, retail sales up 10.4% yoy, FDI up 9.8% to USD 6.75 billion yoy, interest stable Bad: CPI up 0.55% mom (3.86% yoy due to rise in petroleum and food), , net import USD 0.5 billion and exchange rate slightly up. Market Flash: Vnindex down 79 point ~ -7.5% mom and max drag down vs ATH is at ~-20%. Market cap slightly rise to USD 139 billion (thanks to VHM) and liquidity fall to USD 310 million daily. Among groups of stock, Midcap and small cap only fell around 3.6% and 2% last month.
·         What to expect in June? If you expect this month to be a quite one, I’m afraid that it might be not. Investors should keep their eye on:
o   12/06 US-North Korea summit
o   12-13/06 FOMC meeting
o   14/06 closing of National Assembly in Vietnam
o   22/06 OPEC meeting
o   11-22/06 review ETF (FTSE Vietnam and Vaneck Vietnam ETF)
Graph of the day: Emerging & Frontier Markets suffered more than Vietnam ytd


Source: Bloomberg, BSC




Tran Thang Long (Mr.)


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