Research Center

Vinh Hoan recorded VND629bn revenue in Jul 2020, decreasing 9% yoy, which were mainly hit by the decrease of export revenue to the U.S. (-16% yoy), China (-13% yoy) and rest of world excluding the U.S., EU, China (-20% yoy), due to the weakening demand of restaurant channel amid pandemic. However, Vinh Hoan’s export volume to the U.S showed sign of recovery as we estimate Vinh Hoan’s export volume to this market rebounded to Jul 2019’s level.

Mobile World recorded VND8,669bn revenue (-7% yoy) and VND326bn NPAT (+12.4% yoy) in Jul 2020. Mobile World’s net margin reached 3.8% in Jul 2020, rising 0.6%p yoy and 0.03%p mom, thanks to (1) efforts in upgrading store network, (2) operating expenses optimization, (3) larger revenue contribution of high-margin products (small appliances, watches) and (4) the yoy improvement of Bach Hoa Xanh’s post-spoilage gross margin.

The big restructuring in 2Q20 with Keep NPL ratio low and Credit cost retreat. Overall, the banking industry posted strong 1H20 earnings growth despite of strong headwind from the virus globally. Combined net profit (NP) of non-financial HSX companies was down 23% yoy while financial led by banks reported a NP growth of 15% yoy in 1H20.

In 2H20, we estimate Mobile World to record VND48,938bn revenue (-3.2% yoy) and VND1,552bn NPAT (-9.5% yoy), mostly driven by management board’s efforts to protect earnings of The Gioi Di Dong & Dien May Xanh and yoy widening profit margins of Bach Hoa Xanh.

We envisage another gloomy quarter in 3Q20F as some social distancing requirements to curb the second wave of COVID-19 could blow sales events. Despite a sluggish 3Q20F industry conditions, sector’s bottom line in 3Q20F could see steady yoy growth leading by VHM, KDH thanks to the delivery schedule is more skewed in favour of 2H20F.

We consider it positive toward action on selling 36% stake in Long Dien Group as its underlying cash supports DXG’ need for working capital. We maintain BUY rating and a RNAV-based target price of VND12,800 with 10-50% discounts applied to the fair value of each project based on the respective project’s execution period and land acquisition

We retain our BUY rating but raise a RNAV-based TP to VND93,500 to reflect the faster cash receipt from three bulk sale transactions. We think investors can do worse than accumulating VHM stock thanks to its leading and dominant position in the Vietnam market in both land bank and execution aspects.

We downgrade VPB to hold due to uncertainty of COVID-19. The return of virus in Vietnam amid peak summer holiday season may weaken domestic consumption in 2H20. As of June 2020, restructured COVID-19 loans accounted for 10.4% of the consolidated loan book.

We expect Masan Consumer surge to maintain earning growth pillar of Masan Group, premised by (1) revenue surge of premium products in modern trade channel, which saw revenue blossom in 1H20, (2) profit consolidation of Netsco and (3) profit margins expansion.