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This quarterly earnings report on Vietnam banking is intended to track the earning growth based on financial statements. The 1Q23 recorded some anomalies when aggregated NPAT of the listed 27 banks was almost unchanged at -4.4%yoy in 1Q23 vs +17.9%yoy in 4Q22 and +31%yoy in 1Q22. Most of the banks saw 1Q23 credit growth slowness and corporate bond balance slump. There are no clear signals for strong credit demand recovery amid the economic downtrend. However, 2Q23 NIM will slightly improve qoq thanks to a decrease in funding cost in 2Q23.

In the agriculture sector, revenue edged up by 7% yoy to VND18.7tn, mainly contributed by the surging revenue of crop producers by 21% yoy, covering 20% yoy revenue slump of feeding companies. We expect that falling feed supply prices amid demand increase thanks to the long holiday (30/4-1/5) will help retrieve the pork and poultry price in 2Q23. However, the expenses of utilities and interest expenses could remain at a high level in 2Q23.

This monthly report on Vietnam steel production is intended to track the developments in the steel market. During Apr 23, we observed a qoq improvement pause in total sales volume.

Breweries dragged down F&B’s revenue growth in 1Q23. The beer revenue went down yoy and qoq due to tighten alcohol testing in traffic and weak purchasing power amid an economic slowdown. We expect the consumption of beer and dairy will continue to face the challenge in the 2Q23F However, we expect the gross margins of listed dairy and beer companies to improve continuously qoq in 2Q23F due to enjoying cooling raw material prices.

According to Customs, in Apr, total fertilizer export volume was 131,913 tonnes (-11.5% yoy, +4.2% mom), equivalent to USD48mn (-52.9% yoy, -12.7% mom). Total urea/NPK production in Apr was 153,200/385,500 tonnes (-22.7%/+47.5% yoy, -27.3%/+22.7% mom), respectively. Overall, Apr fertilizer production was 654,200 tonnes (+7.2% mom). +13.1% yoy). The Apr urea domestic market price was trading at around VND9,500/kg (-1.0% mom, -45.7% yoy and -22% YTD).

According to Customs, in Apr, total fertilizer export volume was 131,913 tonnes (-11.5% yoy, +4.2% mom), equivalent to USD48mn (-52.9% yoy, -12.7% mom). Total urea/NPK production in Apr was 153,200/385,500 tonnes (-22.7%/+47.5% yoy, -27.3%/+22.7% mom), respectively. Overall, Apr fertilizer production was 654,200 tonnes (+7.2% mom). +13.1% yoy). The Apr urea domestic market price was trading at around VND9,500/kg (-1.0% mom, -45.7% yoy and -22% YTD).

This quarterly earnings report on Vietnam steel production is intended to track the earning growth trend in the steel market. We witnessed a turn-around of earnings in 1Q23. Although the turn-around was mainly attributed by the reversal of inventories provision, high-cost inventories pressure was believed to be fully relieved. We expect to continue to see the weak demand in 2Q23F but slight improvement compared to 1Q23. We forecast the total sales volume in 2Q23F will be 6.1mn tonnes -6% yoy, +10% qoq.

This quarterly earnings report is a wrapped-up note of listed Vietnamese textile producers based on their financial statements. In line with 4Q22, the 1Q23 revenue growth of listed garment companies continuously declined 22.8% yoy and earnings growth dropped further by -71.4% yoy 1Q23. Inventory levels at major foreign retailers like Nike and Adidas have increased since 2H22, which together with slow consumption led to a decrease in orders. That high inventories will unlikely to solve in 2Q23F and the recovery in the orders is hard to happen.

According to the GSO estimate, in Apr, the total agriculture export value was more than USD2.1bn (-2.9% mom, +23.8% yoy). Rice surpassed coffee to be the highest value exported product with USD574mn (+20% mom, +110% yoy), and it accounted for 27% of total agriculture export turnover (+5%p mom). Vegetables exporting benefits from China’s reopening policy, showed in the value increase of 30% yoy in 1Q23. China is preferring official quota to non-official quota border trade, thus putting pressure on improving vegetable quality.

We initiate an Overweight rating on Oil & Gas industry as we see multiple tailwinds in the middle-term and long-term outlook due to expectations of reactive upstream and midstream projects. We also have BUY ratings on PV Drilling (PVD VN) and PV GAS (GAS VN). PVD is expected to turn around and could enjoy high growth of earnings in the next 3 years due to higher jack-up rates, meanwhile, GAS is the largest listed company in the sector with strong finance ratios and many planning midstream projects to supply natural gas pipelines and import LNG to fill high power demand of Vietnam economy.