Báo cáo chiến lược 2023 HSC

Equities | Vietnam Strategy Update Strategy Report 05 December 2022 Nov-22: Foreign bottom fishing revives market Nguyen Tuan Anh Senior Analyst, Data Analytics anh.nguyen@hsc.com.vn +84 28 3823-3299 Ext.160 ▪ The VN Index recovered to 1,048.42, up 1.32% m/m, but still down 30% YTD The average daily trading volume also declined to VND11,675 billion, up 0.7% m/m, yet 33.6% lower than the YTD average ▪ Inflows were evident in most sectors, especially banks, retail, metal & mining, capital markets, and real estate The derivatives market received inflows with trading volume 61% higher than last month, hitting a new all-time high ▪ Foreign investors were net buyers in November deploying USD725 million, flipping the net YTD cumulative total to USD680 million ▪ Our 1,250 year-end VN Index target suggests potential upside of 19.2% HSC research highlights Highlights this month include coverage initiation of MSB by Le Anh Tung (Solid bank at a discount price; initiate at Buy, 10 November) MSB is a small/medium-sized bank with a solid track record of profitability and improving performance in recent years with a business model focusing on retail & SMEs We initiate coverage on MSB with a Buy rating and a TP of VND15,500, upside 26% In the sector report, Vietnam O&G: Ignore volatility, time for bottom fishing, 07 November, our Energy & Utilities team highlighted our positive view on Vietnam O&G, given the backdrop of unresolved global supply constraints and rising energy demand In addition, mooted revisions to Vietnam’s petroleum law could be a catalyst for share prices and long-term growth Our undisputed top pick is GAS (upside 51%), while PVS, PVD, PVT, and BSR are also great choices (upside >30.0%) at current levels Industrials analyst Che Thi Mai Trang highlighted in her sector report, China’s reopening; VN air travel ready to take-off?, 15 November, what she sees as a Chinese reopening theme that will be the key catalyst for aviation The recent easing of Chinese COVID-19 policy should be a boon for the Vietnamese tourism industry into FY23 onwards since China is Vietnam’s biggest source of international arrivals We also note a couple of rating adjustments in our coverage Le Khanh Tung downgraded his rating for BID to Add (from Buy) after recent share price strength, though we also lift our TP 4% to VND40,500 (upside: 13%), following upward earnings revisions Bui Nguyen Cam Giang also downgraded MSN to Add and cut our target price by 31% to VND114,2000 (upside 15.4%) due to what we see as a weaker earnings outlook, with slower consumer demand impacting the top line as well as higher interest expenses VN Index and daily trading volume from November 2020-2022 Source: Bloomberg, HSC Research www.hsc.com.vn Powered by FactSet RMS Partners Page Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Document downloaded by Thien Vd (HSC) Strategy Report 05 December 2022 www.hsc.com.vn Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 News and notable market events in November Vietnam Markets: Asian investors still on lookout for deals (Vietnam Investment Review, 30 November) – Having been the dominant players in Vietnam’s merger and acquisition market for years, new activities from Japanese, South Korean, and Singaporean investors are demonstrating that interest in the fastgrowing market remain unchanged FDI inflows report some improvement on-month (Vietnam Investment Review, 29 November) – Total foreign direct investment inflows for JanuaryNovember have narrowed the gap with on-year performance by less than per cent, instead of the two-digit drop seen in previous months HSX HNX 0.2% -0.6% Upcom -6.6% YTD chg -30.8% -55.5% -36.6% year chg -30.2% -53.7% -37.7% Index month chg Turnover Shares (mm) 909 Value (USDmm) Market Cap (USDmm) 89 44 616 47 17 181,965 10,473 42,086 40 Foreign trading Buy (USDmm) 1,908 THACO to invest $1 billion in an industrial park in Binh Duong (Vietnam Investment Review, 29 November) – The automaker Truong Hai Auto Corporation (THACO) is mulling plans to invest in a mechanical supporting industrial park with the total investment capital of $1 billion in the southern province of Binh Duong Sell (USDmm) 1,214 Korean expectations for deals in Vietnamese market (Vietnam Investment Review, 28 November) – Since Vietnam keeps moving forward with its high economic growth rate, market potential, and developments in business sectors including IT, Vietnam is still an attractive investment destination for foreign investors However, with synchronised interest rate increases under way globally and depreciations of South Korean currency caused by the recent global recession following the geopolitical uncertainty makes it difficult for South Korean businesses to predict their affairs, as well as the profitability of their potential targets abroad Valuations (HSC Coverages) Net (USDmm) 695 34 Foreign turnover 14.0% 2.7% ETF Fund flows month Net flows (USD) 263.0 684.0 659.0 Flows/ assets 14.5% 37.8% 36.4% 2022 2023 2024 YTD year P/E 10.13 8.85 7.39 P/B 1.75 1.49 1.29 ROE 17.3% 16.9% 17.5% month (%) YTD (%) year (%) Sectors (composite): Financials 8.5% -18.7% -16.0% 11.9% -25.3% -24.4% 6.5% -5.8% -3.3% Foreign investors sign billion-dollar deals to invest in southeast (Vietnam Investment Review, 29 November) – Foreign investors committed to investing billions of dollars in the southeast via signing memoranda of understanding (MoU) in petrochemicals, electronics, industrial park infrastructure, urban areas, and tourism Materials -0.8% -43.4% -45.1% Industrials -3.2% -28.4% -27.7% Boosting international railway transport investment (Vietnam Investment Review, 27 November) – The initial successes of the railway container transport network from Vietnam to Europe have provided a fulcrum inspiring the railway sector to increasingly engage with the international network Health Care Real Estate Consumer Staples Utilities Consumer Discretionary Energy Information Technology 0.5% 5.2% 6.1% -7.7% -17.1% -14.0% 3.9% -37.9% -36.9% -2.3% -2.6% -6.6% 1.3% -16.4% -15.5% -10.1% -60.3% -53.0% month (%) YTD (%) year (%) 0.24% -30.84% -30.23% Singapore 5.18% 5.41% 6.28% Malaysia 3.15% -4.85% -0.36% Thailand 1.40% -0.55% Indonesia -0.45% 6.68% 7.88% Philippines 9.45% -5.44% -6.47% US 5.93% -4.81% 1.67% UK 5.43% 2.60% Japan 1.98% -1.96% 1.04% Germany 8.47% -8.92% -6.49% Korea 6.19% -16.72% -14.48% Taiwan 17.71% HK Communication Service Regional Markets: Vietnam Strong GDP growth supports rebounding M&A market (Vietnam Investment Review, 24 November) – Vietnam's economy is expected to grow by per cent this year and 6.5 per cent next year, creating a pedestal for investment and business activities VSMCamp and CSMOSummit discusses digital experience in sales and marketing (Vietnam Investment Review, 20 November) – As digital transformation continues to profoundly impact every aspect of Vietnam's socioeconomic development, sales and marketing are no exception VinFast to file for an IPO in US in January 2023 (Vietnam Investment Review, 17 November) – VinFast, the electric vehicles (EV) manufacturer subsidiary of Vingroup, is allegedly considering its planned initial public offering (IPO) in the US as soon as January 2023 ASEAN approach underpins robust investment inflow (Vietnam Investment Review, 16 November) – Further facilitation of a more competitive investment environment leveraged by the Regional Comprehensive Economic Partnership is helping Vietnam attract more funding from ASEAN and its partners VN Index ASEAN: International: 5.69% -18.88% -15.94% 21.23% -19.92% -20.81% China (Shng-A) 6.61% -13.03% -11.50% Australia 5.41% -1.21% 1.64% India 3.68% 8.40% 9.59% 12.07% -21.08% -20.75% MSCI Frontier 4.45% -27.88% -27.64% MSCI Asia-Pac 12.61% -19.02% -18.40% Benchmarks: MSCI EM www.hsc.com.vn 3.62% Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Market events – last 12 months vs VN Index Source: HSC Research www.hsc.com.vn Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Vietnam stock market review The VN Index rose this month to 1,048.42, up 1.32% m/m but still down 30% YTD During the month, the VN Index reached its lowest point of the year at 873.78, the lowest level since August 2020 The market continued to suffer selling pressure due to news of further tightening Fed monetary policy, rising interest rates worldwide, persistent inflation concerns, the effects of a prolonged Russia-Ukraine war Trading liquidity slightly improved in November 2022 compared to the previous month The average daily turnover in November rose to VND11,675 billion, 0.7% higher than in October yet 33.6% below the YTD average We can see the average monthly turnover of all key sectors has been decreasing materially since November 2021 However, liquidity in the derivatives market (VN30 futures) increased sharply in November to a new all-time record high level, up 61.2% m/m Foreign investors net buying was USD725 million in November 2022, the highest level since May 2018, flipping the net YTD cumulative total to USD680 million ETF inflows to the Vietnam market remained positive, totaling USD373.39 million for the month, the highest level since 2010, which is mainly attributed to the new Fubon ETF as well as iShares MSCI Frontier 100 ETF VFMVN Diamond ETF, E1VFVN30 ETF, and VanEck Vectors Vietnam ETF all recorded net inflows while net withdrawals were evident for the Premia MSCI Vietnam ETF While the market is facing short-term weakness and may take more time to recover, its valuation is very cheap for the region and compared to previous years We retain our positive view on the Vietnam equity market but recommend a more defensive, tactical stance in the short-term given the global impact of higher interest rates and tighter monetary conditions Our adjusted forecast for the VN Index for FY22 is 1,250, which implies FY22 and FY23 P/Es of 10.1x and 8.8x, respectively, while our coverage offers potential upside of 19.2% VN Index and daily trading volume Source: Bloomberg, HSC Research www.hsc.com.vn Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Outperformers and underperformers in November HSX HNX Top 10 gainers Ticker Top 10 losers Price Change % Ticker STG 39,450 12,550 46.7% SMC CTF 25,800 2,750 BMP 61,000 6,355 FRT 81,800 CKG Price Top 10 gainers Change % 9,400 -7,350 -43.9% 11.9% TCD 6,510 -4,690 11.6% NHA 12,500 -8,500 8,500 11.6% DIG 17,700 27,900 2,536 10.0% KBC CVT 45,850 3,850 VNM 78,500 EIB Top 10 losers Price Change Change % DHT 39,400 -100 -0.3% PVL 2,300 -2,400 -51.1% -41.9% HHC 87,800 -500 -0.6% L14 36,400 -35,900 -49.7% -40.5% BNA 19,700 -200 -1.0% APS 7,200 -6,300 -46.7% -12,000 -40.4% VC2 18,000 -200 -1.1% KLF 900 -700 -43.8% 17,500 -11,500 -39.7% HTP 47,100 -900 -1.9% VGS 9,800 -6,700 -40.6% 9.2% VPH 4,500 -2,800 -38.4% VC3 37,900 -1,300 -3.3% SDA 6,400 -4,300 -40.2% 6,200 8.6% BSI 18,000 -11,163 -38.3% OCH 7,200 -300 -4.0% IDJ 7,700 -5,000 -39.4% 37,000 2,800 8.2% HBC 10,100 -6,250 -38.2% INN 42,000 -2,100 -4.8% BCC 7,700 -4,900 -38.9% MSH 36,950 2,750 8.0% LSS 6,070 -3,730 -38.1% DNP 23,800 -1,400 -5.6% CEO 13,500 -8,200 -37.8% SVC 112,200 7,300 7.0% NVT 7,480 -4,520 -37.7% SLS 128,800 -8,042 -5.9% BII 2,000 -1,200 -37.5% Top 10 active (by volume) Ticker Volume Ticker Top 10 active (by value) % of total Ticker Top 10 active (by volume) VNDmn % of total 5.4% EIB 17,735,429 7.3% SHS 211,482,672 16.7% IDC 3,901,812 19.3% VND 489,177,953 4.2% HPG 11,283,461 4.6% PVS 152,331,293 12.0% PVS 3,458,035 17.1% EIB 443,799,443 3.8% STB 7,538,760 3.1% CEO 106,770,199 8.4% SHS 1,724,600 8.5% STB 443,398,595 3.8% TCB 7,315,423 3.0% IDC 85,878,065 6.8% CEO 1,597,936 7.9% HAG 398,469,520 3.4% VND 6,498,143 2.7% HUT 61,570,043 4.9% HUT 1,156,091 5.7% SSI 378,751,646 3.2% SSI 6,392,024 2.6% TNG 41,848,194 3.3% HTP 798,873 3.9% MBB 350,418,454 3.0% DGC 6,368,008 2.6% KLF 36,296,977 2.9% TNG 679,543 3.4% SHB 305,108,584 2.6% MBB 6,114,797 2.5% PVC 33,575,051 2.7% SCG 618,217 3.1% VPB 297,434,933 2.5% DIG 5,181,369 2.1% IDJ 30,239,613 2.4% PVC 575,548 2.8% TCB 286,176,564 2.4% NVL 5,196,723 2.1% MBS 28,947,058 2.3% MBS 421,582 2.1% VNDmn Ticker Top 10 active by foreigners (sell) % Ticker Volume Top 10 active (by value) 629,289,870 Top 10 active by foreigners (Buy) % of total Price HPG Ticker VNDmn % Ticker % of total Ticker Top 10 active by foreigners (Buy) VNDmn % Ticker VNDmn Top 10 active by foreigners (sell) VNDmn % 9.0% PVS 55,486 1.6% 165,798 4.8% IDC 26,357 0.7% 20,242 58.4% TNG 4,223 0.6% L14 6,962 2.6% VCS 2,803 2.2% 15.5% TNG 5,462 0.8% PVI 2,490 7.2% 1,122,931 14.9% SHS 4,973 0.3% VNC 2,031 86.0% 1,056,254 67.2% VCS 4,417 3.4% EVS 2,017 3.6% 929,148 14.3% HUT 3,796 0.3% HLD 1,935 8.3% 22.7% VNM 870,698 27.8% BVS 3,110 4.4% MBS 1,713 0.4% 16.5% NVL 809,170 15.6% MBS 2,293 0.5% THD 1,225 14.9% VNM 1,752,325 56.0% EIB 3,359,310 18.9% IDC 351,256 FUEVFVND 1,387,029 88.2% HPG 2,894,665 25.7% PVS MSN 1,381,014 33.0% MBB 1,257,330 20.6% PVI MBB 1,258,853 20.6% VHM 1,170,232 31.3% HPG 1,204,440 10.7% TCB 1,134,947 TCB 1,134,972 15.5% STB DGC 955,530 15.0% FUEVFVND VCB 925,078 50.4% VND VHM 847,274 MWG 746,254 www.hsc.com.vn % Ticker Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Sector insights Industry groups (using Bloomberg definitions) in Vietnam across all exchanges which attracted capital flows in November 2022 include Banks, Metals & Mining, Capital Markets, Real Estate Management & Development, Machinery, Beverages, Electrical Equipment, and Trading Companies & Distributors while outflows were seen in other sectors, specifically in Energy Equipment & Services, Electronic Equipment, Chemicals, Metals & Mining, Airlines, Transportation Infrastructure, Building Products, and Electric Utilities Average monthly traded value (VNDbn) Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 % m /m Top industries by traded value Banks 231,354 299,158 305,495 184,057 194,690 132,421 101,626 112,823 115,785 85,136 105,591 144,515 36.9% Metals & Mining 106,019 91,495 117,247 157,568 100,263 98,683 78,708 76,395 107,146 83,789 68,345 81,530 19.3% Capital Markets 186,409 134,244 94,041 101,883 97,533 82,059 78,214 99,462 117,312 82,454 66,341 76,425 15.2% Energy Equipment & Services 76,672 121,354 129,401 152,928 86,863 71,773 139,122 63,508 140,032 149,989 113,269 71,384 -37.0% Electronic Equipment, Instruments & Components 58,556 62,747 51,688 94,722 140,195 79,136 89,800 34,225 52,988 90,652 76,420 55,884 -26.9% Specialty Retail 36,519 36,363 53,832 52,811 76,419 46,180 62,074 47,005 67,389 64,226 48,702 42,492 -12.8% 114,864 109,137 81,944 94,551 69,276 44,580 36,044 31,364 40,048 36,971 28,251 38,773 37.2% IT Services 50,221 42,762 32,896 91,993 148,716 84,123 78,392 45,897 53,792 41,073 33,270 32,536 -2.2% Food Products 77,527 70,618 46,539 68,041 53,519 41,732 45,795 45,888 54,063 49,050 33,413 30,712 -8.1% Electrical Equipment 87,514 128,678 79,542 76,335 83,399 41,631 34,203 30,305 41,336 30,123 25,939 29,288 12.9% Chemicals 72,092 54,336 53,479 105,914 83,239 51,541 52,983 33,333 41,174 47,440 34,740 28,593 -17.7% Airlines 80,176 68,617 142,719 104,762 67,524 53,680 55,571 42,118 48,376 41,385 21,626 18,871 -12.7% Construction & Engineering 75,630 75,400 48,268 58,808 47,341 29,571 28,708 26,310 29,891 28,699 17,781 18,348 3.2% Transportation Infrastructure 59,033 62,549 63,584 64,926 50,099 45,867 50,908 28,585 39,093 31,215 23,671 16,808 -29.0% Gas Utilities 29,811 38,174 42,912 33,135 29,669 27,691 76,778 28,313 22,323 16,128 15,146 15,171 0.2% Machinery 93,456 72,344 37,752 40,363 21,801 14,697 12,156 12,317 11,774 12,899 10,129 14,006 38.3% Insurance 18,633 13,910 14,533 26,246 48,887 35,820 31,498 21,210 23,943 27,639 14,486 12,991 -10.3% Industrial Conglomerates 48,744 41,625 35,028 60,004 40,067 34,334 37,433 22,616 29,373 23,572 12,368 11,636 -5.9% Independent Pow er and Renew able Electricity Producers48,534 40,613 37,783 22,801 18,726 16,148 36,866 17,989 20,765 23,237 11,174 9,850 -11.8% 12.2% Real Estate Management & Development Beverages 5,749 6,409 7,552 6,320 10,670 7,139 5,926 6,698 7,139 7,420 8,587 9,631 Textiles, Apparel & Luxury Goods 14,379 14,787 22,718 26,653 29,016 17,917 23,884 13,108 18,447 12,613 9,435 9,285 -1.6% Building Products 33,040 17,760 18,729 25,883 19,098 11,475 17,195 14,777 18,290 17,932 14,429 8,738 -39.4% Oil, Gas & Consumable Fuels 14,535 15,117 34,329 27,770 17,294 12,425 10,843 5,913 14,709 9,166 5,976 5,219 -12.7% Trading Companies & Distributors 18,940 20,941 17,138 30,055 22,044 10,050 6,740 6,229 8,999 7,276 4,002 5,185 29.6% Electric Utilities 13,611 11,252 5,012 5,467 5,693 3,372 11,673 5,822 5,711 11,594 6,313 4,346 -31.2% Note: Industries are based on Bloomberg definitions Source: Bloomberg, HSC Research www.hsc.com.vn Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 HSC top stock picks Changes in the last 30 days: VTB, VCB, & MSN removed Ticker EPS growth P/E Div yield HSC Closing Target Upside / Mkt cap rating price price downside (USDmn) 21A 22F 23F 24F 21A 22F 23F 24F 21A 22F 23F 24F Financials: Banks ACB Buy 22,100 31,400 42.1% 3,029 24.7% 37.3% 12.8% 12.9% 7.9 5.8 5.1 4.5 - - - 'N/a MBB Buy 17,400 25,500 46.6% 3,201 44.8% 41.6% 13.0% 15.4% 6.5 4.6 4.1 3.5 - - - 'N/a STB Buy 20,000 26,200 31.0% 1,530 24.4% 37.1% 48.2% 54.1% 10.8 7.9 5.3 3.5 - - - 'N/a TCB Buy 25,900 38,600 49.0% 3,770 46.2% 16.4% 12.3% 17.6% 5.0 4.3 3.9 3.3 - - - 'N/a Real Estate: Developers VRE Buy 30,550 39,100 28.0% 2,817 -44.8% 100.3% 26.2% 8.8% 52.8 26.4 20.9 19.2 - 3.3% 3.3% 3.3% VGC Buy 36,650 66,000 80.1% 667 103.7% 57.7% -15.0% 26.3% 13.4 8.5 10.0 7.9 3.0% 4.1% 4.1% 4.1% PHR Add 42,600 80,400 88.7% 234 -55.9% 101.0% -4.6% 10.8% 12.1 6.0 6.3 5.7 10.6% 9.4% 9.4% 'N/a Industrials: Transportation SCS Add 71,000 84,300 18.7% 270 22.9% -39.2% 5.2% 17.4% 6.8 11.2 10.6 9.1 4.2% 7.0% 7.0% 7.0% VEA Buy 39,400 52,500 33.2% 2,124 3.6% 20.2% 6.6% 4.3% 9.1 7.6 7.1 6.8 11.4% 10.9% 13.1% 13.9% ACV Buy 84,500 91,000 7.7% 7,465 -70.9% 1363.2% 12.6% 10.0% 383.4 26.2 23.3 21.2 0.0% 0.6% 0.6% 0.6% GMD Add 47,400 55,200 16.5% 580 62.4% 59.6% 8.2% 19.0% 23.3 14.6 13.5 11.4 3.0% 4.2% 4.2% 4.2% Industrials: Materials - Chemicals DCM Buy 29,100 40,800 40.2% 625 174.7% 124.1% -39.6% -6.0% 8.4 3.8 6.2 6.6 6.2% 10.3% 6.9% 6.2% DPM Buy 40,900 61,200 49.6% 649 350.9% 77.9% -39.5% -24.0% 5.1 2.9 4.8 6.3 8.6% 12.2% 12.2% 8.6% 68,000 14.7% 197 -59.0% 171.0% 1.8% 9.7% 22.6 8.4 8.2 7.5 4.4% 11.8% 11.8% 12.6% Industrials: Metals and Capital Goods BMP Add 59,300 Consumer Staples - F&B, Tobacco SAB Buy 180,000 228,500 26.9% 4,681 -22.9% 51.1% 19.8% 21.2% 32.7 21.7 18.1 14.9 1.9% 1.9% 2.2% 2.8% VHC Buy 68,000 135,000 98.5% 502 45.4% 92.7% 9.9% 7.8% 11.8 6.1 5.6 5.2 2.9% 2.9% 2.9% 2.9% QNS Buy 37,400 56,100 50.0% 457 19.4% 5.1% 17.0% 9.6% 9.1 8.6 7.4 6.7 6.7% 8.0% 8.0% 8.0% Consumer Discretionary MWG Buy 44,100 66,900 51.7% 2,619 17.0% -9.5% 41.9% 22.1% 13.1 14.4 10.2 8.3 2.3% 2.3% 3.4% 4.5% PNJ Buy 113,500 131,900 16.2% 1,133 -3.3% 65.8% 15.0% 16.4% 27.3 16.5 14.3 12.3 1.8% 1.8% 1.8% 1.8% 3,321 21.8% 29.0% 21.8% 25.0% 18.8 14.6 12.0 9.6 2.8% 2.7% 2.7% 2.7% Technology, Communications & Internet: Information Technology FPT Buy 74,600 108,200 45.0% Energy & Utilities GEG Buy 12,350 27,600 123.5% 161 -9.5% 4.5% 19.0% 12.9% 13.3 12.7 10.7 9.4 0.0% 4.9% 6.5% 8.1% BSR Buy 14,800 28,000 89.2% 1,862 338.2% 122.1% -27.7% 11.7% 6.8 3.1 4.3 3.8 2.0% 6.8% 10.1% 10.1% GAS Buy 110,200 170,000 54.3% 8,558 10.4% 86.1% -13.8% 19.8% 24.3 13.1 15.2 12.7 2.8% 3.6% 4.5% 4.5% PVT Buy 20,100 27,000 34.3% 264 -7.9% 36.5% 14.9% 11.1% 9.9 7.2 6.3 5.7 5.9% 5.0% 5.0% 5.0% www.hsc.com.vn Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 HSC coverage universe: Key data and multiples, based on aggregates Total HSC coverage list upside is 45.9% Valuation P/E 20A 16.88 21A 12.09 P/B 2.47 2.02 1.75 1.49 1.29 EPS growth 0.0% 3.2% 23.5% 12.2% 18.7% 14.6% 16.7% 17.3% 16.9% 17.5% 1.6% 1.8% 2.0% 2.3% 2.4% ROE Dividend yield Financials: Banks P/E P/B EPS growth ROE Dividend yield 20A 15.56 2.54 11.5% 18.8% 0.7% 21A 12.21 2.15 27.8% 19.8% 1.0% 22F 9.15 1.80 33.5% 21.6% 0.9% Financials: Insurance P/E P/B EPS growth ROE Dividend yield 20A 22.51 1.79 8.1% 1.7% 21A 19.11 1.70 17.8% 9.1% 1.9% 22F 16.17 1.60 18.2% 10.2% 2.1% Real Estate: Real Estate Development P/E P/B EPS growth ROE Dividend yield 20A 12.57 1.90 25.4% 0.3% 21A 16.73 1.77 7.0% 22.9% 1.7% 22F 12.44 1.60 11.1% 16.1% 2.7% 22F 10.13 Upside: 21% 23F 8.02 1.42 13.7% 19.9% 0.9% 24F 6.64 1.21 20.9% 19.7% 0.9% Upside: 31% 23F 13.90 1.49 16.3% 11.1% 2.1% 24F 11.99 1.37 15.9% 11.9% 2.1% Upside: 64% 23F 10.24 1.43 22.8% 17.1% 2.7% 24F 9.04 1.28 14.0% 16.7% 2.8% 23F 8.85 24F 7.39 Energy & Utilities: Energy - Oil & Gas P/E P/B EPS growth ROE Dividend yield 20A 19.32 3.57 -58.7% 11.3% 2.7% 21A 30.73 3.36 59.7% 16.7% 2.7% 22F 10.92 2.87 65.6% 27.8% 4.1% Energy & Utilities: Utilities - Electricity P/E P/B EPS growth ROE Dividend yield 20A 12.00 1.40 12.1% 1.9% 21A 11.59 1.27 13.6% 13.0% 1.6% 22F 11.25 1.26 0.7% 12.0% 3.8% Energy & Utilities: Utilities - Gas P/E P/B EPS growth ROE Dividend yield 20A 15.20 1.55 3.4% 8.2% 21A 12.93 1.33 274.0% 11.1% 3.3% 22F 23.45 1.47 -35.4% 6.3% 4.1% Upside: 59% 23F 12.93 2.66 4.5% 20.8% 5.4% 24F 10.80 2.40 18.9% 22.5% 5.5% Upside: 67% 23F 11.37 1.17 0.2% 11.6% 4.6% 24F 10.40 1.10 10.3% 11.9% 4.9% Upside: 87% 23F 12.05 1.39 95.1% 11.9% 4.2% 24F 11.02 1.32 9.3% 12.3% 5.0% www.hsc.com.vn Industrials: Capital Goods Upside: 15% 23F 8.21 2.00 1.8% 24.3% 11.8% 24F 7.49 1.98 9.7% 26.6% 12.6% Upside: 34% 22F 22.12 4.38 -1.2% 22.2% 2.7% 23F 17.53 3.97 25.8% 24.7% 2.9% 24F 14.74 3.58 19.9% 26.2% 3.0% Consumer: Consumer Discretionary - Durables & Apparel Upside 21% 23F 13.68 2.46 14.5% 20.8% 1.8% 24F 11.74 2.10 16.7% 20.7% 1.9% P/E P/B EPS growth ROE Dividend yield 20A 9.29 1.96 23.6% 21.2% 10.7% 21A 22.64 2.12 -59.0% 9.0% 4.4% 22F 8.36 1.98 171.0% 24.5% 11.8% Consumer: Consumer Staples - F&B, Tobacco P/E P/B EPS growth ROE Dividend yield P/E P/B EPS growth ROE Dividend yield 20A 49.59 6.40 22.5% 3.1% 20A 23.67 4.36 20.8% 1.6% 21A 20.77 4.76 176.7% 28.7% 2.6% 21A 25.38 3.85 -3.0% 17.5% 1.8% 22F 15.68 2.88 59.2% 22.8% 1.8% Page Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Real Estate: Construction & Construction Materials P/E P/B EPS growth ROE Dividend yield 20A 24.71 2.25 8.6% 3.8% 21A 26.24 2.04 77.0% 15.7% 3.0% 22F 17.50 1.74 55.9% 21.6% 3.5% Infrastructure P/E P/B EPS growth ROE Dividend yield 20A 13.50 0.72 5.1% 7.0% 21A N/a 0.71 -230.8% -6.9% 0.0% 22F 4.32 0.64 339.1% 16.0% 0.0% Conglomerates P/E P/B EPS growth ROE Dividend yield 20A 46.51 3.26 7.0% FALSE 21A N/a 2.65 -194.6% -5.9% - 22F 43.75 2.46 212.4% 5.8% - Upside: 78% 23F 12.09 1.57 13.6% 16.2% 3.5% 24F 7.95 1.37 51.6% 18.4% 4.2% Upside: 78% 23F 21.29 0.65 -79.7% 3.0% 7.0% 24F 8.80 0.64 142.0% 7.3% 7.0% Upside: 26% 23F 36.11 2.30 21.2% 6.6% - 24F 26.99 2.12 33.8% 8.2% FALSE Industrials: Transportation P/E P/B EPS growth ROE Dividend yield 20A 74.21 3.90 2.0% 3.1% 21A 244.37 4.92 -40.2% -18.3% 2.5% 22F 19.22 3.21 865.3% 40.3% 2.9% Industrials: Materials - Chemicals P/E P/B EPS growth ROE Dividend yield 20A 21.48 2.04 9.8% 3.1% 21A 6.53 1.66 242.8% 28.5% 7.2% 22F 3.69 1.29 85.9% 42.2% 10.3% Industrials: Materials - Industrial Metals P/E P/B EPS growth ROE Dividend yield 20A 4.57 1.01 24.5% 2.6% 21A 2.29 0.87 108.5% 46.4% 2.7% 22F 6.99 0.99 -66.3% 15.6% 0.0% Upside: 12% 23F 17.21 2.93 14.9% 21.2% 3.3% 24F 17.27 2.62 18.9% 17.0% 3.4% Upside: 41% 23F 5.66 1.17 -35.3% 21.9% 8.8% 24F 6.37 1.07 -11.2% 17.4% 6.9% Upside: 51% 23F 5.81 0.85 19.6% 15.9% 2.6% 24F 4.85 0.74 20.2% 16.6% 2.6% www.hsc.com.vn Consumer: Consumer Discretionary - Retailing P/E P/B EPS growth ROE Dividend yield 20A 49.75 1.91 25.4% 1.2% 21A 13.11 1.97 193.3% 28.7% 2.1% 22F 13.75 2.87 -4.9% 23.4% 2.1% Upside: 56% 23F 9.90 2.40 38.4% 26.9% 3.2% 24F 8.20 2.02 20.7% 27.1% 4.2% Technology, Communications & Internet: Information Technology P/E P/B EPS growth ROE Dividend yield 20A 22.90 5.15 23.8% 1.1% 21A 18.79 4.54 21.8% 25.7% 2.8% 22F 14.57 4.20 29.0% 30.0% 2.7% 23F 11.96 3.73 21.8% 33.2% 2.7% Health Care P/E P/B EPS growth ROE Dividend yield 45% 24F 9.57 3.22 25.0% 36.2% 2.7% 15% 20A 16.09 2.84 19.2% 0.9% 21A 12.84 2.39 26.2% 20.3% 0.8% 22F 12.31 1.43 4.1% 14.3% 0.7% 23F 10.52 1.28 17.3% 12.7% 0.7% 24F 7.91 1.12 35.6% 14.8% 0.7% Page 10 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 New trading accounts 96,601 new securities trading accounts were opened in October 2022, which is 5% lower than the number of new accounts that were opened in September In the first 10 months of the year, individual investors opened nearly 2.4 million new accounts, which is equal to 55% of the total number of accounts recorded at the end FY21 The growth of new accounts opened this month was much lower compared to previous months, below 2% Market liquidity remains low The average monthly trading volume in October is 36% lower compared to the YTD average Source: VSD, FiinPro, HSC Research www.hsc.com.vn Page 16 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 ETF fund flows ETF inflows of USD373.39 billion occurred in November 2022, the highest level since 2010, which is mainly attributed to the new Fubon ETF as well as iShares MSCI Frontier 100 ETF VFMVN Diamond ETF, E1VFVN30 ETF, and VanEck Vectors Vietnam ETF all recorded net inflows while net withdrawals were evident for the Premia MSCI Vietnam ETF Vietnam ETF fund flows (USDmn) Relative ETF prices vs VN Index Source: Bloomberg, HSC Research month ETF fund flows (USDmn) Source: Bloomberg, HSC Research YTD ETF fund flows (USDmn) Source: Bloomberg, HSC Research www.hsc.com.vn Source: Bloomberg, HSC Research Page 17 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Vietnam listed companies: Recent placements, candidates for SOE equity sell-downs Recent private placement announcements, sorted by market capitalisation Vietnam Prosperity Joint Stock Commercial Bank VPB Plan Volume (Shares) 1,190,000,000 Saigon-Hanoi Commercial Joint Stock Bank SHB 533,374,722 4/22/2022 Joint Stock Commercial Bank for Investment and Development of Vietnam BID 455,267,143 4/29/2022 SmartInvest Securities Joint Stock Company AAS 300,000,000 7/7/2022 VNDIRECT Securities Corporation VND 243,568,732 4/26/2022 Southeast Asia Commercial Joint Stock Bank SSB 228,700,000 4/22/2022 Khai Hoan Land Group Joint Stock Company KHG 200,000,000 4/12/2022 Hoang Anh Gia Lai Corporation HAG 161,904,760 4/12/2022 Nam A Commercial Joint Stock Bank NAB 160,000,000 5/5/2022 Sacombank Securities Joint Stock Company SBS 150,000,000 6/7/2022 Kinh Bac City Development Holding Corporation KBC 150,000,000 2/11/2022 Masan Group Corporation MSN 142,372,483 4/29/2022 Viet First Securities Corporation VFS 140,100,000 4/12/2022 LDG Investment Joint stock Company LDG 120,000,000 7/1/2022 Thu Duc Housing Development Corporation TDH 120,000,000 4/21/2022 Sao Thang Long Investment Joint Stock Company DST 115,000,000 5/19/2022 Masan High-Tech Materials Corporation MSR 110,626,257 4/27/2022 American Vietnamese Biotech Incorporation AMV 110,000,000 7/4/2022 SSI 104,042,344 5/9/2022 HQC 100,000,000 6/20/2022 Company Ticker SSI Securities Corporation Hoang Quan Consulting Trading Service Real Estate Corporation Announcement Date (Day) 5/4/2022 Source: FiinPro, HSC Research www.hsc.com.vn Page 18 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Companies available for divestment by SOEs, sorted by chartered capital ACV Market cap (VNDbn) 168,997 Ba Ria - Vung Tau Water Supply Joint Stock Company BWS 3,024 36.0% An Giang Power and Water Supply Joint Stock Company DNA 1,352 87.7% Hai Phong Water Joint Stock Company HPW 1,187 80.6% Thua Thien Hue Water Supply Joint Stock Company HWS 1,153 70.0% Quang Ninh Clean Water Joint Stock Company NQN 961 51.0% Vinh Long Warter Supply Joint Stock Company VLW 723 51.0% Viet Tri Chemical Joint Stock Company HVT 571 68.5% CTW 560 64.0% AFX 509 20.5% Hai Duong Water Joint Stock Company HDW 478 65.0% Khanh Hoa Water Supply And Sewerage Joint Stock Company KHW 442 51.0% Ben Tre Water Supply and Sewerage Joint Stock Company NBT 441 64.0% Phu Yen Water Supply and Sewerage Joint Stock Company PWS 403 38.4% Dien Bien Water Supply Joint Stock Company DBW 393 99.4% Ninh Thuan Water Supply Joint Stock Company NNT 350 52.1% Quang Binh Water Supply Joint Stock Company NQB 346 51.0% Nghe An Water Supply Joint Stock Company NAW 333 38.1% Dong Thap Water Supply & Urban Environment Joint - Stock Company DWS 324 85.1% Bac Giang Clean Water Joint Stock Company BGW 318 51.0% Company Ticker Airports Corporation of Vietnam Can Tho Water Supply - Sewerage Joint Stock Company An Giang Agriculture and Foods Import - Export Joint Stock Company % SOE Stake 95.4% Source: FiinPro, HSC Research www.hsc.com.vn Page 19 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Regional equity markets The Vietnam stock market remains attractive versus regional peers According to Bloomberg, EPS growth reached 35% in FY21, higher than the regional average Earnings are also expected to grow more significantly than the regional average in FY22 The forward P/E for FY22 and FY23 are only 9.1x and 8.2x with EPS growth of 11.1% and 11.7%, respectively Our VN Index target for the end of 2022 is 1,250, which implies 19.2% upside 2021 P/E, EPS growth Sources: Bloomberg, HSC Research 2022 P/E, EPS growth Sources: Bloomberg, HSC Research www.hsc.com.vn Page 20 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 2023 forward P/E, EPS growth Sources: Bloomberg, HSC Research www.hsc.com.vn Page 21 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Global equity markets Absolute performance of the VN Index vs MSCI FM, MSCI EM (Jan-17 = 100) Source: Bloomberg, HSC Research ROE of VN Index vs MSCI FM, MSCI EM Forward P/E of VN Index vs MSCI FM, MSCI EM Source: Bloomberg, HSC Research www.hsc.com.vn Source: Bloomberg, HSC Research Page 22 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Economy, interest rates, and commodity index IPI, PMI, trade balance, and FDI flows The industrial production index still maintains a solidly positive rate but slowed recently, slipping to 5.3% in November 2022 Vietnam’s manufacturing PMI was also lower compared to previous months and within the region The trade balance became a deficit and FDI implementation flows have been steady since January 2022 Industrial production index and manufacturing Manufacturing PMI Source: CEIC, HSC Research Vietnam trade Source: CEIC, HSC Research FDI flows Source: CEIC, HSC Research www.hsc.com.vn Source: CEIC, HSC Research Page 23 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Interest rates, FX, CPI, & Bloomberg Commodity Index The Overnight interbank rate increased in November, higher than the average level seen since 2020, while overnight interbank volume has also increased steadily since 2020 Under pressure from a sharp rise in the DXY recently as well as the policy change in widening the exchange rate band from the SBV, the USD/VND exchange rate substantially increased to the level of VND24,800 Although CPI has increased over the past few months, the Bloomberg Commodity Index has actually decreased from the peak recently Overnight interbank rate and volume DXY and USD/VND exchange rate Source: CEIC, HSC Research Monthly CPI of Vietnam Source: Bloomberg, HSC Research Bloomberg Commodity Index, which is calculated on an excess return basis and reflects commodity futures price movements Source: CEIC, HSC Research www.hsc.com.vn Source: Bloomberg, HSC Research Page 24 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Bond market & money markets Government bond trading in the secondary market Source: HNX, HSC Research Foreign capital net inflows into stock and bond markets Source: HNX, HSC Research www.hsc.com.vn Page 25 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Government bonds held by banks Vietnam financial market liquidity Source: Various sources, HSC Research Money market rates and change since date shown Source: SBV, IMF, CEIC, HNX, HSC Research Money market and interbank liquidity Source: Bloomberg, HSC Research www.hsc.com.vn Source: Various sources, HSC Research Page 26 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Currencies DXY EUR/VND Source: Bloomberg, HSC Research USD/VND GBP/VND Source: Bloomberg, HSC Research CNY/VND Source: Bloomberg, HSC Research Source: Bloomberg, HSC Research KRW/VND Source: Bloomberg, HSC Research www.hsc.com.vn Source: Bloomberg, HSC Research Page 27 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Commodities Gold Steel (hot-rolled coil) Source: Bloomberg, HSC Research Rubber Sugar Source: Bloomberg, HSC Research Gasoline Source: Bloomberg, HSC Research Source: Bloomberg, HSC Research Brent oil Source: Bloomberg, HSC Research www.hsc.com.vn Source: Bloomberg, HSC Research Page 28 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 HSC macroeconomics forecast www.hsc.com.vn Page 29 Document downloaded by Thien Vd (HSC) Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Strategy Report 05 December 2022 Global Disclaimer Copyright © 2022 Ho Chi Minh Securities Corporation (HSC) All rights reserved This report has been prepared and issued by HSC or one of its affiliates for distribution in Vietnam and overseas only to professional institutional investors who are our clients and who have agreed to receive our institutional research product If you are not such an investor this report is not intended for you, and you should not read or rely upon it This research report is prepared for general circulation to institutional investors for informational purposes only It does not have regard to the specific investment objectives, financial situation, or particular needs of any investor who may receive or read it, and investors are cautioned to make independent decisions with regard to their individual financial situations and investment objectives Nothing in this report constitutes an offer, nor an invitation to make an offer, to buy or to sell any securities or any option, futures contract, or other derivative instrument in any jurisdiction Nor should it be construed as an advertisement for any financial instruments Opinions, estimates, and projections expressed in this report represent the views of the author at the date of publication only and are subject to change without notice They not necessarily reflect the opinions of HSC HSC may make other recommendations or comments to other classes of investors which not agree with the contents of this report HSC has no obligation to update, amend, or in any way modify this report or otherwise notify a reader thereof in the event that any of the subject matter or any opinion, projection, or estimate contained within it changes or becomes inaccurate The information herein was obtained from various sources and we not guarantee its accuracy or completeness HSC may have proprietary positions in any of the securities mentioned in this report Research may be considered by HSC when buying or selling proprietary positions or positions held by funds under its management HSC may trade for its own account as a result of shortterm trading suggestions from analysts and may also engage in securities transactions in a manner inconsistent with this report and the opinions expressed therein Officers of HSC may also have a financial interest in securities mentioned in this report or in related instruments HSC may have investment banking relationships with or seek to business with companies named in this report Investors should note that the prices and availability of financial instruments fluctuate and may rise and fall Past performance, if any, is no guide to the future This report remains the property of HSC and is not public information It may not be copied, reproduced, published, or redistributed in whole or in part by any person for any purpose without the express written permission of HSC Any party shall be liable to HSC for any cost, loss, or damage incurred by HSC or HSC clients as a result of any breach under this Disclaimer in accordance with law Furthermore, in the event of any copyright infringement, we reserve the right to pursue legal action against any violation or breach in accordance with Intellectual Property law in Vietnam and other relevant jurisdictions Explanation of Institutional Equity Research Ratings Buy: Expected to rise by more than 20% on an absolute basis in the next 12 months Add: Expected to rise by between 5% and 20% on an absolute basis in the next 12 months Hold: Expected to rise or decline by less than 5% on an absolute basis in the next 12 months Reduce: Expected to decline by between 5% and 20% on an absolute basis in the next 12 months Sell: Expected to decline by more than 20% on an absolute basis in the next 12 months HEAD OFFICE HANOI OFFICE Level & 6, AB Tower 76 Le Lai, District 1, HCMC T: (+84 28) 3823 3299 F: (+84 28) 3823 3301 Level 2, Cornerstone building 16 Phan Chu Trinh, Hoan Kiem District T: (+84 24) 3933 4693 F: (+84 24) 3933 4822 E: info@hsc.com.vn W: www.hsc.com.vn www.hsc.com.vn Page 30 Please refer to the disclosures of potential conflict of interest and the disclaimer at the end of this report Document downloaded by Thien Vd (HSC) ... Source: CEIC, HSC Research Vietnam trade Source: CEIC, HSC Research FDI flows Source: CEIC, HSC Research www .hsc. com.vn Source: CEIC, HSC Research Page 23 Document downloaded by Thien Vd (HSC) Please... Bloomberg, HSC Research USD/VND GBP/VND Source: Bloomberg, HSC Research CNY/VND Source: Bloomberg, HSC Research Source: Bloomberg, HSC Research KRW/VND Source: Bloomberg, HSC Research www .hsc. com.vn... Bloomberg, HSC Research Rubber Sugar Source: Bloomberg, HSC Research Gasoline Source: Bloomberg, HSC Research Source: Bloomberg, HSC Research Brent oil Source: Bloomberg, HSC Research www .hsc. com.vn