Research Center

We tuned in to CTG’s analyst meeting on May 18 which featured the strategical visibility on the group and shed some light on its 1Q23 operational updates. Total credit risk provision cost could fall by 34.5-50% yoy (VND12,000-15,000bn) in 2023, per management. However, CTG has yet provide the PBT guidance since they must obtain approval from SVB based on 2023 AGM. The management eyes NPL to be below 1.8% as of end-2023.

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.

Total Apr steel sales volume posted 77,269 tonnes, decreasing 7.6% mom and 17.0% yoy. The 4M23 total sales volume came in at 271,967 tonnes, -22.4% yoy. In which, the steel coat volume declined 24.6% yoy to 221,091 tonnes and the steel pipes volume was down by 11.0% yoy to 50,870 tonnes.

Total Apr steel sales volume posted 129,992 tonnes, dropping by 25.8% yoy but increasing 21.5% mom. The FY7M23 (Oct 2023-Feb 2023) total sale decreased 38.0% yoy to 764,474 tonnes as steel pipes volume declined 24.5% yoy to 162,258 tonnes and steel coat fell 40.8% yoy to 602,216 tonnes.

Total Apr steel sales volume posted 535,640 tonnes, decreasing by 14.7% yoy and 5.6% mom. The 4M23 total finished-product sale volume dropped significantly to 2,117,172 tonnes, -30.7% yoy. Of which, all products sale volume declined due to high base in 2022.

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.

In April, MWG recorded a 20% increase m/m in revenue to VND9,700bn of which TGDD/DMX revenue was up 30% m/m due to a strong increase in air conditions sales and BHX revenue increased 3% m/m, reaching VND1.35bn per store per month. Per management, MWG gains market shares in cellphone & electric appliance fields due to a price-competitive strategy and they continue to pursue this price-competitive strategy for a long period, it is not a campaign.

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).

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.