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VCG’s revenue doubled by +108% yoy, 132.4% qoq (VND4.5tn), and NPAT skyrocketed to VND130.3bn (+592% qoq) compared to 2Q22 loss of VND60.3bn. The real estate accounting for 25% of revenue in 1H23 posted a GM of 29% (+9%p yoy) than the construction division (60% of total revenue, GM: 2.1%, -3.3%p yoy). The Company's interest expense in 1H23 was VND430.9bn, +11% yoy. The revenue growth pushing up the interest coverage to 5x in 2Q23 from 3.3x in 2Q22

The stock market remains to rise strongly in the session with high liquidity, indicating buying signals. Although consolidation sessions may appear around the important resistance level of 1,240 - 1,250 pts, an uptrend is still present as the VNIndex closes above the 20-period moving average. Therefore, investors should open again long positions and focus on the leading stocks.

The FTSE Rusell announced that the FTSE Vietnam Index will add VIX, but not remove any tickers in this review. Accordingly, we expect that FTSE Vietnam ETF will sell HPG and VRE the most with 16.9 million shares and 6.4 million shares, based on data as of 6 Sep 2023. On the buy-side, VIX, VND, and VNM will be bought heavily with 12.6 million shares, 9.2 million shares, and 5.7 million shares. The new weights will be effective on 17 Sep 2023.

Long positions on VN30F2309 should be held and stop the loss when there is the closing price below 1,220 pts level (Hourly chart).

Although the aggregate loan balance returned to grow in August, the improvement was modest. Interbank rates remain cheap despite the long holiday, suggesting that the liquidity condition is persistently excessive and government policies in encouraging economic activities need more time to be material. In the vein of government support, the postponement of clauses 8, 9, and 10 of Article 8 of Circular No. 39/2016/TT-NHNN became effective in September. We expect SBV’s decision to ease a few requirements for borrowers and improve credit performance for the future months. In the notable development, USDVND rose further at a softer pace than the previous week primarily due to the prolonged situation of negative swap spread and higher demand for raw materials from importers to the peak season 2-3 months later.

Long VN30F2309 after ATO session and stop the loss when there is the closing price below 1,220 pts level (Hourly chart).

The stock market has the 5th consecutive gaining session with high liquidity, showing positive signals. In the short term, the VNIndex has retested the previous resistance zone of 1,240-1,250 pts. If this index successfully surpasses with high liquidity, the uptrend will be confirmed. Therefore, investors should stand aside and observe the next movements of the market.

Despite a flattish 2Q23 revenue growth of -4.5%yoy (VND39.3tn), earnings growth rattled by 42.1% yoy due to the interest burden coupled with an unfavorable comparison base. Gross profit reduced to VND4.6tn (-17.1%yoy). Costly material thinned industry gross margins, particularly for residential contractors. In contrast, infrastructure builders with BOT projects sustained healthier gross margins. Contractors were weighted by surging interest expense including C4G (+95 % yoy interest expense growth in 2Q23), PC1 (+59% yoy), TCD (+67% yoy).

QNS is the domination of the soymilk market and also holds the second-largest sugar factory in Vietnam. With dominant market share, soymilk segment supplies a cash cow, while we anticipate that QNS's sugar production will be maintained at a high level, ensuring good selling prices and strong profit margins for QNS in the years ahead due to anti-dumping duties. We initiate our coverage on Quang Ngai Sugar (QNS VN) with a BUY rating and target price of VND65,900, implying a 33.0% upside by using a DCF (50%) and PE (50%) methodology.

The trading interest remained to spread to all cover warrants with inflow coming back. This indicated positive signals for the cover warrant market in the next time.