Research Center

We initiate our coverage on PVD with a BUY rating and target price of VND28,850 implying a 37.8% upside by using a DCF (70%) and PB (30%) methodology. In DCF method, we calculate the fair value of VND29,400/share with implied long-term growth of 3.0%, and WACC of 12.3%. Our target price is based on an average 2023-25F PB of 1.0x arose from PVD’s firm position to benefit from rising demand for drilling in Southeast markets. The most significant risk of PVD is a drop of oil prices weighting on day rates and outlook.

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.

PVT targets a conservative 2023F plan with VND6.8tn revenue (-24.4% yoy), and a VND538bn PAT (-53.5% yoy), however, the management is confident to exceed the plan. Capex in 2023F is estimated to be VND4.1tn mainly including the new 6 ships buying cost, Capex was financed by 35% equity and 65% debt.

Mar export value of Vietnam’s T&G improved on a monthly basis largely based on the recovery in US market. Nonetheless, the Mar and Feb decent performance could not enlighten the 1Q23 tepid outcome with USD7.2bn, -17.4% yoy. Vietnam’s fiber and yarn (F&Y) export value remarkably slid 29.0% yoy but rose 11.0% mom to USD376mn in Mar. Following Feb’s solid industry growth, the Feb export revenue of most listed companies was favorable.

TNG posted a positive Mar performance with revenue of VND561bn (+35.8% yoy, +50% mom). Nonetheless, the rosy Mar could not save 1Q23. Specifically, 1Q23 revenue came in at VND1,333bn (+6% yoy but -12% qoq). Therefore, the company fulfilled 18% of its 2023F planned revenue in 1Q23. The 1Q23 revenue growth is largely attributable to the US market.

Average daily trading value (ADTV) kept dropping to VND11,332bn (-18.3% qoq, -63.7% yoy) in 1Q23. The quarterly number of new accounts in 1Q23 marked the lowest since 1Q21 with 140,024 new accounts opening (-50.7% qoq, -79.3% yoy). VPS ranked 1st position in the HSX’s brokerage with 15.67% market share, +0.86%p qoq in 1Q23. This was also the highest market share in company history. The runner up was SSI with 11.53%, +1.57%p qoq.

We value GEG using a DCF (70%) and EV/ EBITDA (30%) methodology. We initiate coverage with a BUY rating and target price of VND19,650, implying an upside of 39.9%. Our target price implies a target 2023F-24F EV/EBITDA of 8.0x, which is lower than the average historical EV/EBITDA over 2020-2022. We expect favorable growth of GEG’s business results, which will reach CAGR revenue growth and NPATMI growth of 11.4% and 32.0% in 2023F-2025F.

On Mar 31, REE Corp (REE) held the Annual General Meeting. In terms of business results, REE got the solid achievement when its revenue and net profit skyrocketed to VND9,372bn (+61% yoy) and VND2,693bn (+45% yoy) respectively, and fulfilled 131% business guidance. This year was the outstanding year for energy sector when hydropower segment benefited from La Nina effect which lasted from the latter half of 2021 to 2022.

On Mar 30, Hoa Phat Group (HPG) held the Annual General Meeting. The company targets a VND150,000bn revenue and a VND8,000bn NPAT amid weak demand. The company has been approved to not pay dividends for 2022.