![VPB – 1Q20 earnings review [BUY +30%] Impressive 1Q20 but rocky road ahead](https://kisvn.vn/en/wp-content/uploads/sites/2/2019/09/page-phantich-m.jpg)
The country credit growth soared to 1.1% ytd as of end of 1Q20 from 0.68% on 20 March amid sluggish economy, which would mainly result from banks’ stimulus packages and restructured loans on virus-impacted debtors. Nevertheless, VPB revealed to maintain positive growth trajectory compared to the same period last year as the COVID-19 pandemic had yet impacted the bank’s 1Q20 performance.
20
April
On 20 Apr, we joined an analyst meeting with Vinh Hoan’s management board to update about its business situation. Consistent with our view, Vinh Hoan recorded the decrease in revenue (-9% yoy) and net income (-51% yoy) in 1Q20 due to undermining pangasius demand in China amid COVID-19 outbreak and export price plunge. Meanwhile, in the high case of 2020 business guidance, management board expects better business results than 2019 as net revenue can increase 9.3% yoy and net income can decrease 9.8% yoy in 2020.
15
April
We estimate Vinh Hoan will record revenue of VND1,537bn (-14.1% yoy) and net profit of VND137bn (-55.5% yoy), because of low export price and contracting gross margin compared to the high base of 1Q19. However, Vinh Hoan's gross margin may improve 1.3%p qoq thanks to (1) favourable farming expenses as Tan Hung farm came into operation and (2) stable outsourcing material price.
10
April
KDH market price has been plunged by -26.6% YTD, providing undemanding valuation. We believe the current price could flip when KDH releases its 1Q20F positive results with a 46.8% yoy net profit increase in the fourth week of April, together with a VND500bn share-buy-back plan announced on 26 Mar. Total return is 28.1% (incl. 2.5% dividend yield) in 1 year, thus we maintain BUY with KDH
06
April
Masan Group estimates Masan Meat Life’s revenue to grow 20% yoy in 2020, thanks to sales acceleration of MEATDeli pork, of which 1Q20 revenue is expected at USD10-15mn. VinCommerce’s EBITDA margin is estimated to have enhanced to -6% in 1Q20 and to maintain its improvement trend in next two quarters. Masan Consumer Holding expects convenience food to beat its previous estimate in 1Q20.
03
April
We estimate 1Q20 revenue of Hoa Phat at VND16,882bn, up 12.8% YoY. Given the fact that iron ore is remaining at the high level of around USD91 per tonne, +10% YoY, and the additional VND600bn of D&A and interest, we estimate NPAT at VND1,546bn, -14.6% YoY
03
April
Export to the U.S. will face difficulty in 2Q20 because of school closures, but travel restriction in the U.S. will not interrupt Vinamilk’s milk supply to this market. Vinamilk has lowered its consolidated revenue growth rate target to 8% yoy this year from the previous figure of 10% as management board has prudent view of domestic market in the pandemic.
21
February
In spite of export prospect, flat domestic market and higher WMP price keep us cautious about Vinamilk in 2020. Based on the fair PER of 19.5x, we evaluate VNM share at VND115k by the end of 2020. Including VND4,000 cash dividend, total 1-year expected return is 12.3%. HOLD.
19
February
Before any stimulus from the Government, we expect to see short-term negative impacts on Vietnam steel industry. However, with its key advantages, we maintain our previous estimate for revenue and net profit of Hoa Phat at VND76,018bn and VND8,762bn, up 19.4% YoY and 12.9% YoY. As a result, we value HPG share at VND28,000 by the end of 2020 for the total return of 20.2% Therefore, we maintain our BUY recommendation
15
March
Regarding the impact of the global commodity price surge on Vietnam CPI, we estimate that the current value of Brent price could push 2022 inflation to exceed the government target of 4%, mainly through the consumption channel. However, implementing well-established tools allows the Vietnam government to mitigate external shocks proactively. To sum up, we forecast that the global commodity surge would create temporary pressure on Vietnam inflation.
27
December
Key factors that drive the stock market to rise in 2022 include: (1) the Vietnam economy recovering and strong growth in 2022 and (2) new money will continue to flow into the stock market as new cash flows into stock markets and new money comes from capital flows of securities companies to margin.
09
November
A record plunge in Vietnam’s economy in 3Q21 has threatened economic prospects in the medium and long term growth. The government is standing in a right place to mitigate the lingering impact of the current outbreak and the next ones if they take appropriate actions in an appropriate timing and appropriate way. Recent macro and policy developments are signaling that the ongoing economic recovery would be smooth and sound, but it needs a booster shot, a sufficiently large fiscal relief package, to accelerate recovery momentum and help economic growth back on track. From our view, the “Economic Recovery and Development” fiscal support package, if successfully passed, would be a key to unlocking the full potential of the economic recovery.
26
July
Amid a widespread COVID-19 delta attack in the Southeast Asia region, Vietnam is stepping into the worst outbreak in both its health and economic impacts. Although the government actively deployed various solutions to follow the twin target that effectively controls the pandemic and promotes socio-economic development, the negative impact of economic recovery is inevitable. We predict that the COVID-19 economic impacts on domestic consumption and production levels would be partly reflected in oncoming macroeconomic updates under strict lockdowns nationwide.
18
June
Surging commodity prices and increasing inflation recently pose a considerable risk to global economic stability. However, the majority of global economists and monetary policymakers just saw this phenomenon as a transitory factor, and this trend would eventually reverse to a normal track in the medium- and long- term. Regarding Vietnam's situation, we saw a stable demand-supply balance in major commodities and well-controlled price conditions. The inflation shock in the near term, if it happens, would be expected to be transient and bear a little risk to the economic stability.
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