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On Feb 10, 2023 Novaland held a meeting which gave the audience a walkthrough of the its restricting plan and cash flow. - The company did not hint a glimpse of relief about its due debt payment source but reassures us about its on progress restricting plan. To save money, NVL even procrastinates the interest subsidy program in those current projects and promises to pay back when signing the official contract.

SAB recorded a solid revenue of VND10.0tn revenue (+11.4% yoy, +16.1% yoy) due to high demand due to football events such as AFF, World Cup, and the early Lunar new year holiday, and NPAT-MI of VND1.0tn (-20.3% yoy, -22.3 qoq) owing to a sharp increase of selling expenses. For 2022, SAB revenue and NPAT-MI increased by 33% yoy and 42% yoy to VND35.2tn and VND5.2tn, respectively, fulfilling 101%/113% of guidance.

According to the General Department of Customs, Vietnam's textile and garment exports experienced a decrease in growth for the first time in 2022, with a -9.1% yoy decline, totaling USD8.5bn in 4Q22. The textile and garment industry is expected to face significant challenges in 1Q23F due to a decrease in demand for garments and high inventory levels at major foreign retailers such as Nike and Adidas.

VNM lost domestic market share in 2022 due to restructuring GM (General Trade vs 85% revenue) and MT (Modern Trade vs 15% revenue). Domestic sell-in dropped yoy owing to distribution channel duplication, while domestic sell-out has increased 3-5% yoy in 2022. Although management viewed a conservative outlook for consumer spending, they expect VNM to get positive sales growth in 2023F.

In 4Q22, Vinh Hoan posted VND2,484bn revenue (-7.8% yoy), which was mainly dragged down by -25.9% yoy and -61.1% yoy decrease of export revenue to US and China. Whilst, Vinh Hoan’s 4Q22 NPAT posted VND199.6bn (-56.7% yoy), plunged by lower gross margin due to the flattening at hefty raw material amid the strong tumble selling price.

The industry posted a VND12,048bn revenue (+7.1% yoy, +5,7% qoq) and a VND842bn NPAT (+6.0% yoy, +13.5% qoq) in 4Q22. The 4Q22 aggregated blended gross margin (GM) was 25% (+2.1%p yoy, +0.1%p qoq), while the net margin (NM) nearly stayed the same as 4Q21 with 7.2% (+0.2%p yoy, -0.2%p qoq).

The income of Vietnam workers was impacted by still sluggish export activities, thus we expect consumption of beer and dairy will continue to face the challenge in 1Q23F. However, we expect continuously the gross margins of listed dairy and beer companies to improve in 1Q23F due to enjoying cooling raw material prices. For sugar sector, we expect sales could grow up and improve gross margin due to higher selling prices.

We introduce a favorable 2023F-24F earnings forecast with net profit of VND774bn (+6.1% yoy) and VND838bn (+8.3% yoy), respectively due to (1) waning La Nina effect, (2) rising power consumption demand and (3) tight coal supply problems. Thus, we recommend BUY in response to sustainable earnings growth prospects and favorable dividend yield.

According to the GSO estimate, in Jan, the total agriculture export value was more than USD1.5bn (-10% mom, -8% yoy). Coffee brought the highest value of USD352mn (+12% mom, -5% yoy), and it accounted for 23% of total agriculture export turnover, followed by vegetables (19%) and rubber (17%).

The total revenue growth momentum of listed garment companies was maintained in 3Q22 when posting 27.0% compared to 25.8% in 2Q22. the earnings growth pace spiked from 22.6%% yoy in 2Q22 to 59.0% yoy in 3Q22 thanks to the low base effect as the Southern region was in a lockdown period in 3Q21. Whereas, listed yarn makers witnessed decent growth figures in 3Q22. Specifically, the revenue growth pace in 3Q22 was 16.7% yoy compared to only 5.5% yoy in 2Q22. Net profit growth of yarn companies also jumped to 12.7% yoy in 3Q22 from 1.2% yoy in 2Q22.