Research Center

This quarterly earnings report on the Vietnam cement industry is intended to track the earning growth trend in the cement market. We witnessed a slump in earnings in 1Q23. High-cost input was mainly attributed to the negative aggregated profit. We expect to continue to see the weak demand in 2Q23F as construction activities are expected to be impacted by recent economic issues. As for export, we see the q-o-q improvement in the main export market – China, however, not significant. Companies' margins are expected to improve in 2Q23F thanks to lower input cost.

Apr export value growth of Vietnam’s T&G downed slightly by 3.3% mom but plunged sharply by 19.4% yoy. Hence, the 4M23 T&G export value remarkably descended (USD9.7bn, -17.9% yoy). Vietnam’s fiber and yarn (F&Y) export value also slid 26.8% yoy and -5.2% mom to USD356mn in Apr. Despite the the export value turnaround in Mar (total industry export growth of +14.5% mom), the export revenue of most listed companies diverged in Mar: (VGG -3.2% mom, -20.2% yoy), (GIL -2.4% mom, -93% yoy), vs (TNG +27.2% mom, +23.5% yoy).

This quarterly earnings report is a wrapped-up note of listed Vietnamese textile producers based on their financial statements. In line with 4Q22, the 1Q23 revenue growth of listed garment companies continuously declined 22.8% yoy and earnings growth dropped further by -71.4% yoy 1Q23. Inventory levels at major foreign retailers like Nike and Adidas have increased since 2H22, which together with slow consumption led to a decrease in orders. That high inventories will unlikely to solve in 2Q23F and the recovery in the orders is hard to happen.

This quarterly earnings report on Vietnam steel production is intended to track the earning growth trend in the steel market. We witnessed a turn-around of earnings in 1Q23. Although the turn-around was mainly attributed by the reversal of inventories provision, high-cost inventories pressure was believed to be fully relieved. We expect to continue to see the weak demand in 2Q23F but slight improvement compared to 1Q23. We forecast the total sales volume in 2Q23F will be 6.1mn tonnes -6% yoy, +10% qoq.

The seafood industry exported USD1.8bn (-24.5% yoy and -28.1% qoq) in 1Q23 due to the decrease of pangasius and shrimp export As a result, the aggregate revenue growth rate of listed pangasius and shrimp exporters declined by 19.9% yoy and 25.4% yoy. We considered that 2Q23 seafood export continues to slow down yoy due to lower demand in most markets. Yet, the high demand for seafood export to China markets would partly offset the deceleration yoy of the seafood industry in 2Q23

This quarterly earnings report is a wrapped-up note of listed Vietnamese fertilizer producers based on their financial statements. Listed fertilizer companies released the 1Q23 financial statements with “disappointed but not surprised” results. The fertilizer announced a VND21,375bn revenue (-17.9% qoq, -29.5% yoy) and VND1,375bn NPAT (-64.6% qoq, -80.8% yoy). The 2Q23 prospects could be enlightened thanks the new crop season facilitating the selling price hike but not enough to come back to the 4Q22. We maintain our Neutral rating on Vietnam’s fertilizer industry

This quarterly earnings report is a wrapped-up note of listed Vietnamese residential developers based on their financial statements. 1Q23 aggregated NPAT of 27 listed housing developers grew splendidly with 69.2% yoy revenue growth and 63% yoy net profit growth and VHM was a savior. The 2Q23F could be chaotic but full of anticipation with buoyant bond issuance dynamics amid the tepid launches and delaying bond payments. The recently ramping-up solutions and urges from Prime Minister to tackle the licensing bottlenecks could signal rising hope from the developers.

According to the GSO estimate, in Apr, the total agriculture export value was more than USD2.1bn (-2.9% mom, +23.8% yoy). Rice surpassed coffee to be the highest value exported product with USD574mn (+20% mom, +110% yoy), and it accounted for 27% of total agriculture export turnover (+5%p mom). Vegetables exporting benefits from China’s reopening policy, showed in the value increase of 30% yoy in 1Q23. China is preferring official quota to non-official quota border trade, thus putting pressure on improving vegetable quality.

We initiate Neutral rating on Cement industry. In 2023F, despite the reverse of 2022 negative factors, we still see some challenges for the industry amid high-borrowing rate environment and issues related to real estate developers and bond markets. Besides, the demand of global and main export markets are forecasted to be flat in 2023F. Along with it, the new tax rate on clinker export would hinder the revival of export channel. China re-opening is supposed to be a good catalyst for Vietnam cement producers, however, we still have HOLD ratings on HT1 and BCC as we see the market prices are fully reflected the revival outlook of these companies.