Research Center

The market sentiment has become optimistic as the sharp rebound of the VNIndex. The short-term downside risk has reduced. Therefore, traders can increase long positions and focus on leading stocks. 

Last week, foreign buying activities increased dramatically, recorded a net buy value of USD91.1mn, a one-year high. In this scenario, money outflow across Vietnam decreased slightly, recorded a net outflow at USD0.4mn. Of which, VFMVN30 ETF and SSIAM VNFIN LEAD attracted money inflow whilst X FTSE and VanEck Vietnam ETF were the main contributors for the outflow of money.

Power Construction No.1 reported 1Q20 NPAT of VND93bn, up 5.9% YoY. This result is attributed to handover of Thanh Xuan project to cover poor performance of power generation segment. We expect PCC1 has a long-term prospect based on the growth of power generation to improve earnings quality so that we remain our BUY recommendation

We expect brighter domestic market post pandemic and favorable milk input price will strengthen profit growth in the coming quarters. Therefore, we maintain BUY for VNM share with TP of VND124,400. Total expected return is 16%.

In 2Q20, we believe the strong recovery of export to China, thanks to Chinese re-opening, to offset the decrease of export to the U.S. Furthermore, we expect negative impact of COVID-19 pandemic will fade away in Vinh Hoan’s top three export markets from 3Q20. Therefore, we maintain BUY for VHC share with TP of VND37,800. Total expected return is 23%.

In this scenario, the tightening phase or correction period this week will provide the opportunities for investors to earn price advantages or re-enter the market. Therefore, investors can hold their long positions and focus on leading stocks.

Despite the contraction in the last week, the short-term uptrend has been still intact because of the breakout of the VNIndex, closing above the significant threshold of 800 pts. Therefore, traders can increase long positions and focus on leading stocks.

Long positions captured at 760 pts zone should let profit run with upside target at 830 pts. For new positions, long VN30F2005 at 780 pts zone when the upper threshold is broken, take profit at 830 pts and stoploss at 760 pts.

We retain our BUY rating with a RNAV-based TP of VND90,000, thanks to its leading and dominant position in the Vietnam market in both land bank and execution aspects. Its flexible sales strategy in combining retail and bulk sales seems to help the firm withstand market headwinds, maintaining constant pre-sale activities and earnings growth.

Despite the cautious sentiment, the uptrend has been still intact in the short term. Therefore, traders can increase long positions and focus on leading stocks.