Bài giảng 11. Kinh tế Việt Nam và thị trường cổ phiếu (English only)

Bài giảng 11. Kinh tế Việt Nam và thị trường cổ phiếu (English only) tài liệu, giáo án, bài giảng , luận văn, luận án, đ...

8/6/2014 VIETNAMESE ECONOMY AND EQUITY MARKET Presented by Mr Trinh Hoai Giang – Deputy CEO of Ho Chi Minh City Securities Corp (HSC) HCMC, 06th August 2014 CONTENT • Vietnamese economy • Equity market • Investment cases 8/6/2014 VIETNAMESE ECONOMY STABILIZATION PRIMES GROWTH • Vietnam’s economy has been stabilized via austerity • Structural reforms are on going but at slow pace • Country’s macro outlook is now superior to many EM peers • The market remains uncorrelated to global trends • Stocks have risen, but still offer value and growth • Bad debts in banking sector is a big obstacle to GDP growth • GDP decelerated, but is off its bottom 2 8/6/2014 ECONOMY REBALANCED HISTORICALLY HIGH REAL RATES DELEVERAGING NOW A STRUCTURAL TREND 24 115 % GDP % 21 105 18 95 15 12 85 75 65 55 45 Nominal Real -3 -6 -9 May-07 35 25 May-08 May-09 May-10 May-11 May-12 May-13 May-14 01 02 03 TRADE BALANCE RATIONALIZED 05 06 07 08 09 10 11 12 13 14F FX RESERVES SEE ONGOING RE-BUILD $bn % (3) (4) (6) (8) (9) (12) (12) Deficit (LHS) 6.00 mo's 5.25 41 $bn 36 Mo's of Imports (LHS) FX Reserves (RHS) 4.50 31 3.75 26 3.00 21 (20) 2.25 16 (24) 1.50 11 May-07 May-08 May-09 May-10 May-11 May-12 May-13 May-14 (16) (15) 04 Deficit/GDP (RHS) (18) 02 03 04 05 06 07 08 09 10 11 12 13E 14F Sources: DC, IMF, GSO, WB INFLATION WHIPPED / CURRENCY ANCHORED INFLATION 2005-14 30 VND 2008-14 16,500 Core Headline % 17,050 VND/$ Interbank Rate Official Rate 25 17,600 18,150 20 18,700 15 19,250 19,800 10 20,350 20,900 21,450 May-06 May-08 May-10 May-12 May-14 22,000 Nov-08 Oct-09 Sep-10 Aug-11 Jul-12 Jun-13 May-14 Sources: DC, IMF, GSO, WB 8/6/2014 GROWTH SMACKED, BUT BOTTOMING QUARTERLY ROLLING GDP, YOY RETAIL SALES 35 % % 30 Nominal Real 25 20 15 10 2005 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 INDUSTRIAL PRODUCTION 54 52 50 48 46 44 May-12 Nov-12 May-13 2007 2008 2009 2010 2011 2012 2013E PRODUCTION MANUFACTURING INDEX % Nov-11 2006 Nov-13 42 Dec-11 May-14 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Sources: HSBC, DC, GSO COMPARATIVE MACRO SHINES GDP GROWTH, 2014 INFLATION, 2008-14 11 % 10 CURRENT ACCOUNT / GDP, 2013 4.5 CPI % Average 2008-14 3.5 2.5 2014 1.5 0.5 (0.5) (1.5) (2.5) (4.5) (5.5) (3.5) 0 CHI VN PHIL INDO THAI INDIA MAL TKY SAFR BRZ POL (6.5) (7.5) VN INDIA TKY SRI INDO SAFR BRZ PHIL POL CHI THAI MAL 2.4 2.2 2.0 1.8 1.6 1.4 0.92 MAL BRZ TKY CHI SAFR POL INDO THAI INDIA SRI VN X 1.00 1.08 SRI THB MYR 1.16 PHP RUB BRZ 1.2 1.24 TKY IDR 1.0 0.8 2010 MAL PHIL CHI THAI POL BRZ INDO INDIA SRI SAFR TKY CURRENCY, 2013-14 FX RESERVE GROWTH, 2010-13 2.6 % VN VND 2011 2012 2013 1.32 Jan-13 ` Mar-13 May-13 Jul -13 Oct-13 Dec-13 Feb-14 May-14 Sources: DC, Citibank, Bloomberg 8/6/2014 INVESTMENT CYCLE / MONETARY POLICY LOAN GROWTH IS FINALLY PICKING UP INTEREST RATES ARE SLOWLY NORMALIZING 22 52 52 52 Lending % yoy %%yoy yoy % 48 48 48 Re-Fi 44 44 44 19 40 40 40 36 36 36 16 32 32 32 13 Pre-bubble 25-30% avg 28 28 28 2000-07 10% avg lending rate 24 24 24 20 20 20 10 16 16 16 12 12 12 888 444 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 000 Dec-04 Dec-06 Dec-06 Dec-08 Dec-08 Dec-10 Dec-10 Dec-12 Dec-12 Dec-14 Dec-14 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 Dec-14 Dec-04 Sources: DC, IMF, GSO, SBV INVESTMENT CYCLE / FISCAL POLICY …AND GOVERNMENT HAS RAISED BONDS AHEAD OF NEW SPENDING TOTAL INVESTMENT / GDP WAS LOWESTEVER IN 2013, BUT IS TURNING UP IN 2014… 250 48 % VND tr 46 225 44 200 42 175 40 150 38 125 36 100 34 75 32 50 30 25 28 96 98 00 02 04 06 08 10 12 14F 2007 2008 2009 2010 2011 2012 2013 2014F Sources: DC, GSO, MOF, SBV 8/6/2014 FISCAL / FOREIGN DEBT RENEWED OVERHEATING IS HARDLY A CONCERN FISCAL DEFICITS ARE UNDER CONTROL, WITH MUTED INFLATION (7) FOREIGN DEBT IS MINIMAL AND IS MOSTLY ODA ANYHOW (2012) Total Deficit % Corporate Bonds $3.6bn Primary Deficit (6) Banks $3.2bn (5) (4) ODA $26.7bn Sovereign Bonds $3.1bn (3) (2) (1) $37bn foreign debt = 24% of GDP $27bn ODA = 73% of foreign debt 02 03 04 05 06 07 08 09 10 11 12 13F 14F Sources: DC, IMF, MOF 10 FDI FDI HAS STAYED ROBUST AND CONTINUES TO SURGE 13 12 FDI/GDP – VIETNAM GREATLY SURPASSES PEERS 7.50 $bn 2012 % Avg 2007-12 11 6.25 10 5.00 3.75 2.50 1.25 04 05 06 07 08 09 10 11 12 13E 14F 0.00 PAK BANG PHIL SRI INDO THAI CHI MAL VN Sources: ADB, IMF, GSO, IMF 11 8/6/2014 FDI MANUFACTURING WAGES HEAVILY UNDERCUT PEERS (2012) 600 $/mo 500 400 300 200 100 CHI MAL THAI PHIL INDIA INDO VN Source: Petersen Institute, http://blogs.piie.com/china/?p=2677 12 EXPORTS GROWTH OFF 2011 PEAK, BUT STILL STRONG AND AHEAD OF PEERS, AS FDI FLOWS 40 PLUS THERE IS STEADY SHIFT INTO HIGHER-VALUED-ADDED GOODS 120 % % 30 Cellphones Electronics Other Mf'd Commodities 100 20 80 10 60 -10 -20 -30 2009 40 INDIA INDO CHINA THAI MAL PHIL VIET 2010 20 2011 2012 2013 2009 2010 2011 2012 2013E Sources: DC, GSO, BBG 13 8/6/2014 TRADES EU -VIETNAM PARTNERSHIP • Likely to be finalized by late 2014 • Vietnam’s exports to EU have more than doubled since 2010 EXPORTS AND TRADE SURPLUS WITH EU, 2008-13 25 $bn Total Exports Trade Surplus 20 15 • EU is now Vietnam’s No export market at $24.7bn in 2013 • Despite tariffs averaging 11% on textiles, seafood, footwear, garments 10 2008 2009 2010 2011 2012 2013 14 TRADES TRANS-PACIFIC PARTNERSHIP US-CREATED FREE TRADE BLOC WITH 30% OF GLOBAL EXPORTS – FROM WHICH CHINA EXCLUDED EXPORTS TO USA IN $BN 15 8/6/2014 TRADES CHINA EXCLUSION EFFECT TEXTILE MARKET SHARES IN USA TEXTILE EXPORTS TO THE US 30 $bn Without TPP With TPP 25 20 CHINA 40.2% OTHER 52.2% 15 10 VN 7.6% 2000 2005 2010 2015 2020 2025 16 WAGE PRESSURE? LABOR-FORCE GROWTH OUTPACES POPULATION GROWTH UNTIL 2024 3.0 CROSSOVER % Labor Force 2.5 2.0 1.5 1.0 Population JPN CHI THAI TWN KOR MYAN INDO 1990 2013 2014 2014 2017 2023 2024 VIET 2024 PHIL CAM 2039 2045 0.5 0.0 -0.5 -1.0 1990 2000 2010 2020 2030 2040 2050 Sources: UNDP, DC 17 8/6/2014 EXTERNAL ACCOUNTS RATIONAL MACRO POLICY RE-ESTABLISHES BOP SURPLUS $bn Healthy export/import dynamics mitigate, then reverse trade deficit 2008 2009 2010 2011 2012 2013 Trade Account (fob) (12.8) (7.6) (5.1) (0.4) 9.9 8.8 11.9 Net Svc's / Inv's (5.4) (7.1) (8.0) (9.0) (10.4) (12.3) Remittances (5.3) 2014F 7.3 6.4 7.9 8.7 8.2 8.4 8.2 Current Account (10.8) (6.6) (4.3) 0.3 9.1 6.8 7.8 Capital Account 12.2 7.2 6.2 6.4 8.3 6.2 6.6 Positive even with huge trade deficit Preliminary BoP "Surplus" 1.4 0.6 1.9 6.7 17.4 13.0 14.4 But internal capital flight is a problem in in 2009-11, smacking VND… Errors & Omissions (1.0) (8.0) (3.7) (5.5) (5.2) (6.5) (6.0) 0.4 (7.4) (1.8) 1.2 12.2 6.5 8.4 - - - - - - - 23.9 16.5 12.4 13.5 25.6 32.1 40.5 With ongoing strong remittances, current account also improves Ch in Reserves Final BOP …until inflationary policies end, E&O’s flatten out and reserves grow again Final Reserves Sources: DC, IMF, SBV 18 BANKS / PROPERTY INSOLVENCY RISK A NON-ISSUE INTERBANK RATES 21 % 18 LOAN/DEPOSIT RATIOS O/N 1mo 105 % 100 15 95 12 90 85 Rolling 5mo average Jun-09 May-10 Apr-11 Mar-12 Feb-13 Jan-14 80 Jan-07 Oct-08 Aug-10 May-12 Jan-14 Sources: DC, IMF, SBV 19 10 8/6/2014 BANKS / PROPERTY PICK-UP IN HCMC APT’S SOLD PLUNGE IN HOME/INCOME RATIO 40 2,100 x apt's 35 1,750 30 1,400 25 2008 20 1,050 15 700 2013 10 350 0 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 BJG YNG MNL GZH MUM SHG SIN BKK HKG JAK BUS HCM Sources: DC, CBRE 20 SOEs: HUGE PRIVATIZATION SOE BORROWING SPREADS GO TO TOP OF COMMERCIAL RANGE SOE PROJECT INVESTMENT FLAT IN OFFICIAL BUDGET, FALLS VS GDP 12 SOE Capex (RHS) % GDP (LHS) % 10 200 500 VND trn 450 160 400 bps over VGBs 350 120 300 current range for private sector 250 80 200 150 40 100 50 0 06 07 08 09 10 11 12 13E 13F Mar-07 Aug-08 Jan-10 Jun-11 Nov-12 Apr-14 Sources: DC, MOF, HNX, GSO 21 11 8/6/2014 MACRO FORECASTS GROWTH WITH STABILITY unit Real GDP Growth Nominal GDP CPI Exports (cif) Export Growth Imports (cif) Import Growth 2011 2012 2013 2014F 5.9 5.0 5.3 6.0 6.0 $bn 133.5 155.8 172.1 190.0 % 18.1 6.8 6.0 4.7 $bn 96.9 114.6 132.1 154.3 % 34.2 18.2 15.4 16.8 $bn 106.7 113.8 132.1 152.6 6.6 % % 25.8 16.1 15.5 Trade Balance (cif) $bn (9.8) 0.8 0.0 1.7 FX Reserve $bn 13.5 26.5 32.1 40.5 FDI Disbursed $bn 11.0 10.5 11.5 12.5 VND (interbank) $1 21,200 20,850 21,115 21,350 Sources: DC, IMF, GSO, WB, SBV 22 EQUITY MARKET 23 12 8/6/2014 WHY NOW? • The market consolidated for two years in a 375-500 trading range • It has only just broken the upper bound definitively • Traditional alternatives to stocks not look attractive • Vietnam is uncorrelated with global markets • Privatization and reduced foreign ownership limits impend • Valuations no longer absurdly low but they still hold own with peers • It was not easy to break 500, and 600 is showing resistance too • But macro dynamics make upside inevitable 24 MARKET 2006 -14 RISING FROM STRONG 375-500 SUPPORT RANGE, AS VOLUMES TRIPLE FROM $50M TO $150M 1,250 Index Volume 1,125 VNI - VND 600 $m 525 1,000 450 875 375 750 300 625 500 225 375 150 250 75 125 Mar-06 May-07 Jul-08 Sep-09 Nov-10 Jan-12 Mar-13 May-14 Sources: HOSE, HNX 25 13 8/6/2014 1,618 FOREIGN PARTICIPATION IN MARKET 1,200 Index PER 42.2x 834 Index 50 50 $bn $bn 45 45 Market Cap Market CapMkt Cap Combined VN Index 834 VN Index Net Foreign Buy Series1 1,000 1,000 Date: 30 May, 2014 393 800 160 154 93 1,200 800 218 274 1800 PER 28.2x 1600 1600 1400 1400 1400 1400 1400 1200 1200 1200 1200 1200 1600 400 1000 1000 800 800 800 600 600 200 400 400 200 93 154 160 200 834 200 1600 1600 1600 PER 1400 17.5x 1800 1800 1400 1600 1600 12009 1200 1,618 1,618 1400 1400 1000 1200 1200 1000 1000 834 834 800 800 600 42005 35 30 30 834834 834 PER 10.1x 600 600 20 15 600 600 393 Series1 Series1 20 Series1 583 834 834 834 834 (ann’d) 583 834 834 834 834 800 800 Series1 600Series1 Series1 25 1,618 1,618 25 1000 834 800 8001000 1000 393 393 393 393 400 400 400 400 400 274 274 274 274 218 218 218 218 160 200 160 154 160154 160 154 154 160 200 200 200 200 93 93 93200 93 93 400 274 00 1,618 1,618 1,618 400 1000 218 1800 1800 600 35 1,618 1600 1800 600 40 1,618 1800 1800 1800 40 600 326393326 326 400 393 274 274218 218 218 160 160 160200 154 154 93 93 93 274 218 834 Series1Series1 10 393 834 15 10 393 274 00 0 0 -0 18 292011 27 2008 38 2008 49 2009 5 2009 96 23 2012 34 2012 45 16 52013 2006 2006 2007 162007 77 27 62013 38 782014 12 2011 2010 2005 2010 49 892014 Sources: HOSE, HNX 26 NON-CORRELATION TWO-YEAR CORRELATION VS ASIAN PEERS 1.00 x 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 THAI 2YR TSE NSE PSEI JCI MSCI EM SCOMP VNI INDIA TSE 1.00 0.44 0.43 0.52 0.53 0.24 0.03 NSE 0.44 1.00 0.25 0.40 0.60 0.20 0.06 PHILS PSEI 0.43 0.25 1.00 0.47 0.45 0.24 0.10 INDO JCI 0.52 0.40 0.47 1.00 0.64 0.34 0.10 MSCI EM MSCI EM 0.53 0.60 0.45 0.64 1.00 0.48 0.13 CHINA SCOMP 0.24 0.20 0.24 0.34 0.48 1.00 0.15 VNI VNI 0.03 0.06 0.10 0.10 0.13 0.15 1.00 Source: Bloomberg 27 14 8/6/2014 FORECASTS AND VALUATIONS 31 May - VNI 562 TOP 50 RATINGS: ALL-IN unit 2013 2014F 2015F P/E Ratio x 13.6 12.6 11.1 EPS Growth % 19.1 8.5 13.6 NPAT Growth % 22.6 9.4 13.7 PEG x 0.72 1.47 0.82 unit 2013 2014F 2015F P/E x 14.0 12.6 10.8 EPS Growth % 6.9 10.0 17.0 NPAT Growth % 10.0 11.4 17.0 PEG x 2.02 1.25 0.64 31 May - VNI 562 TOP 50 RATINGS: EX-PROPERTY 28 TOP 50 LISTED’S – FIRST 25 COMPANIES AT OR NEAR FOL ARE 45% OF TRADEABLE TOP 50 MARKET CAP, WHICH REPRESENTS VIRTUALLY ALL OF THE VNI’S INVESTIBLE COMPANIES No Company 31-May Price Wt EPS Growth For PER Mkt Wt Price YTD Cap in MC 2013 2014F 2015F (VND) (%) ($m) (%) (%) (%) (%) (%) (%) in VNI Room 2013 2014F (x) (x) PBV 2015F (x) 2013 2014F (x) (x) Yield 2015F 2013 2014F 2015F (x) (%) (%) (%) PV Gas 97,500 46.6 8,757 16.6 19.4 46.2 25.3 10.6 15.3 15.0 13.6 11.8 5.5 4.3 4.3 4.3 3.1 3.1 Vinamilk 123,000 -8.9 4,859 9.2 10.8 - 12.3 0.4 24.4 17.4 17.4 14.0 5.8 4.5 3.9 3.9 3.3 3.3 Masan 98,500 19.4 3,431 6.5 7.6 12.2 -70.2 381.9 52.2 150.0 31.1 20.5 5.0 4.3 3.6 - - - Vietcombank 29,000 8.2 3,185 6.1 7.1 9.5 -1.7 4.2 35.5 15.4 14.8 10.9 1.6 1.5 1.4 4.1 4.1 4.1 Vincom 68,500 -2.1 2,903 5.5 6.4 7.1 320.7 -7.1 -14.3 9.4 10.1 11.8 4.3 4.2 4.2 - - - Vietinbank 14,900 -8.0 2,629 5.0 2.1 1.3 -20.2 -15.6 -2.1 8.5 10.1 10.3 1.0 1.0 1.0 6.7 6.7 6.7 BIDV 14,800 -21.3 1,972 3.7 4.4 29.7 -0.1 9.2 7.0 10.3 9.5 8.8 1.1 1.3 1.2 5.7 5.7 5.7 Bao Viet Holding 40,500 Hoa Phat Group 7.1 1,306 2.5 2.9 24.6 -15.6 22.2 14.9 24.2 19.8 17.3 2.3 2.2 2.1 3.7 3.7 3.7 51,000 42.7 1,165 2.2 2.6 4.5 96.6 23.8 -5.0 12.6 10.2 10.7 2.2 2.4 2.4 2.9 5.9 5.9 10 Sacombank 20,500 19.2 1,110 2.1 2.5 24.6 89.6 -5.8 10.0 10.5 11.2 10.1 1.4 1.3 1.2 3.9 - - 11 PV Drilling 84,000 37.7 1,096 2.1 2.4 8.6 20.7 11.4 15.5 12.2 10.9 9.5 2.4 2.1 2.1 2.4 2.4 2.4 12 Hoang Anh Gia Lai 24,300 18.5 827 1.6 1.8 10.0 119.1 31.2 -23.9 19.1 14.6 19.1 1.4 1.2 1.2 - - - 13 Eximbank 13,200 5.6 769 1.5 1.7 2.9 -69.2 44.2 15.0 24.8 17.2 14.9 1.1 1.1 1.0 3.0 6.4 6.4 14 FPT 46,200 22.6 753 1.4 1.7 - 3.3 11.6 23.0 11.0 8.0 1.8 2.1 1.8 6.5 4.3 4.3 15 Military Bank 13,800 8.7 736 1.4 1.6 - -11.3 2.7 34.8 6.6 6.4 4.8 1.0 0.9 0.8 5.8 7.2 7.2 16 ACB 15,700 0.6 686 1.3 - - 8.0 11.0 38.8 17.4 15.7 11.3 1.2 1.1 1.0 4.5 - - 17 PV Fertilizer 32,500 -21.7 585 1.1 1.3 25.1 -26.6 -35.1 -18.9 5.6 8.6 10.6 1.3 1.2 1.2 15.4 7.7 7.7 18 PV Technical Svc's 26,800 32.0 567 1.1 - 23.7 15.5 8.6 10.0 7.6 7.0 6.4 1.4 1.3 1.4 4.5 4.5 4.5 55.9 19 South Kinh Do 20 Hau Giang Pharma 21 Saigon Sec's 22 Saigon Hanoi Bank 23 Pha Lai Power 24 REE 25 Tan Tao Ind'l Park 9.8 60,000 17.6 491 0.9 1.1 3.8 20.2 20.6 20.2 16.8 13.9 2.0 2.0 2.0 3.3 3.3 3.3 102,000 19.3 421 0.8 0.9 - 21.0 4.4 17.0 17.1 16.1 13.7 3.4 3.8 3.2 2.9 2.0 2.0 24,100 33.9 401 0.8 0.9 - -10.4 74.0 -3.3 20.4 11.7 12.1 1.6 1.6 1.6 4.1 4.1 4.1 9,100 31.9 382 0.7 - 21.2 2,130 23.9 0.0 9.5 7.7 7.7 0.8 0.8 0.8 8.2 8.2 8.2 22,100 -12.0 333 0.6 0.7 35.2 222.8 -31.8 19.5 4.3 6.3 5.3 1.3 1.3 0.9 6.8 6.8 6.8 25,200 -14.9 317 0.6 0.7 - 38.3 -17.4 3.6 6.8 8.2 7.9 1.2 1.3 1.1 6.3 6.3 6.3 7,900 19.7 269 0.5 0.6 32.1 120.0 13.8 7.2 53.3 46.9 43.7 0.7 0.8 0.8 - - - 37 15 8/6/2014 TOP 50 LISTED’S – SECOND 25 No Company 26 Hoa Sen Group 27 Vinacafe 31-May Price EPS Growth PER PBV Mkt Wt Wt For Price YTD Cap in MC in VNI Room 2013 2014F 2015F 2013 2014F (VND) (%) ($m) (%) (%) (%) (%) (%) (%) (x) (x) 44,900 8.7 205 0.4 0.5 7.3 57.8 -26.1 39.2 7.8 10.5 7.6 2.0 2015F 2013 2014F (x) (x) (x) Yield 2015F 2013 2014F 2015F (x) (%) (%) (%) 2.0 2.0 4.5 4.5 4.5 154,000 13.2 194 0.4 0.4 21.0 -12.7 15.7 18.7 15.7 13.6 11.4 3.6 3.2 2.7 1.3 1.3 1.3 28 HCM Sec's 31,200 27.3 188 0.4 0.4 - 14.2 39.4 -0.2 13.9 10.0 10.0 1.7 1.7 1.7 5.4 3.8 3.8 29 PV Insurance 17,500 -3.3 188 0.4 - - -20.6 8.7 10.0 12.4 11.4 10.4 0.6 0.6 0.6 5.7 5.7 5.7 30 Danang Rubber 45,700 17.2 180 0.3 0.4 18.1 20.3 15.6 29.8 11.2 9.7 7.5 2.8 2.3 1.8 4.4 4.4 4.4 31 Gemadept 32,600 -3.0 177 0.3 0.4 20.9 75.6 52.9 16.7 19.0 12.4 10.7 0.8 0.8 0.8 - - - 32 Becamex IJC 12,500 38.9 162 0.3 0.4 42.4 -12.0 27.5 32.0 21.2 16.6 12.6 1.1 1.1 1.1 4.8 4.8 4.8 33 Vinh Son-Song Hinh 16,600 12.2 162 0.3 0.4 19.0 -16.5 72.5 -0.9 17.2 10.0 10.0 1.3 1.2 1.1 6.0 6.0 6.0 34 Lam Thao Fertilizers 41,000 9.3 151 0.3 - 43.3 35 Binh Minh Plastic 67,000 -4.3 144 0.3 0.3 - 36 PV Trans 13,000 11.1 143 0.3 0.3 35.7 37 Hung Vuong Group 24,900 1.6 142 0.3 0.3 30.3 38 Kinh Bac City 10,100 3.1 139 0.3 0.3 39 Vinare 28,800 26.3 138 0.3 - 40 Tifoplast 51,500 11.8 138 0.3 - 41 Casumina 40,500 12.5 129 0.2 0.3 42 Coteccons 62,000 22.8 124 0.2 0.3 - 43 Vinasun 43,000 8.5 115 0.2 0.3 1.8 44 Phu Nhuan Jewelry 31,000 1.3 111 0.2 0.2 - -35.9 34.5 19.9 45 Pomina 12,500 -1.6 110 0.2 0.2 42.5 ptl ltp 1,928 46 Nam Long Group 17,600 2.3 101 0.2 0.2 1.9 -44.6 196.3 100.0 79.4 47 Phuoc Hoa Rubber 27,000 -10.6 100 0.2 0.2 29.9 -38.2 -19.0 -6.6 5.9 48 CII 18,600 -3.6 99 0.2 0.2 0.8 -79.4 6.8 39.1 24.4 49 DIC Group 14,500 16.9 98 0.2 0.2 15.0 125.3 5.7 25.1 38.1 36.0 50 Traphaco 74,500 -11.8 87 0.2 0.2 3.0 22.7 9.7 17.5 12.0 562.02 11.4 52,630 82.6 87.5 21.1 19.1 8.5 13.6 13.6 AGGREGATES -21.3 1.2 6.6 2.3 2.3 2.3 7.3 7.3 7.3 2.5 12.8 14.9 8.2 7.3 6.4 2.0 1.8 1.6 4.5 3.0 3.0 119.0 -4.0 -13.4 7.8 12.6 7.1 13.2 7.1 15.2 1.1 1.1 1.1 - - - -4.8 53.3 2.6 12.0 7.8 7.6 1.3 1.1 1.1 8.0 8.0 8.0 45.6 ltp 83.9 0.9 41.2 22.4 22.2 0.7 1.0 0.7 - - - 14.0 17.5 15.0 15.0 9.7 8.4 7.3 1.2 1.2 1.2 6.9 5.2 5.2 7.2 -0.6 5.7 5.0 10.0 9.5 9.0 1.8 2.4 2.4 5.8 5.8 5.8 33.0 36.9 35.8 7.0 7.6 5.6 5.2 2.2 1.8 1.5 5.7 3.7 3.7 3.3 20.3 13.7 10.2 8.4 7.4 1.1 1.1 1.0 3.2 3.2 3.2 47.6 9.7 13.6 10.1 9.2 8.1 1.6 1.8 1.8 4.7 4.7 4.7 13.7 10.2 8.5 1.8 1.8 1.8 6.5 6.5 6.5 -10.7 176.8 8.7 1.0 1.0 1.0 - - - 26.8 13.4 1.3 1.7 1.7 4.5 4.5 4.5 7.3 7.8 1.0 0.9 0.9 11.1 11.1 11.1 22.8 16.4 1.3 1.3 1.3 6.5 6.5 6.5 28.8 0.9 0.9 0.8 - - - 10.9 9.3 2.7 2.6 2.2 2.7 2.7 2.7 12.6 11.1 2.3 2.0 1.9 3.7 3.2 3.2 38 COMPARATIVE VALUATIONS: MARKETS FORWARD REGIONAL PER/EPS – 31 MAY 2014 18 PHILIPPINES 17 16 MALAYSIA 15 PER 2015F (X) 14 INDIA INDONESIA 13 12 11 VIETNAM THAILAND 10 CHINA 6 10 11 12 13 14 15 16 17 18 EPS CAGR 2014-15 (% LCY) Sources: Dragon Capital Top 50 for Vietnam; CLSA all others 29 16 8/6/2014 COMPARATIVE VALUATIONS: MARKETS EX TOP 31-MAY TRAILING PERs 31-MAY TRAILING PBVs 3.25 22 x THAILAND x PHILIPINES 21 PHILIPINES 3.00 20 INDONESIA MALAYSIA 2.75 19 INDIA INDONESIA 18 2.50 THAILAND 17 INDIA MALAYSIA SRI LANKA 2.25 16 PAKISTAN CHINA 15 2.00 SRI LANKA 14 CHINA 1.75 PAKISTAN 13 VIETNAM VIETNAM 1.50 12 10 8Source: Bloomberg 10 30 ALTERNATIVE ASSETS: OUT OF FAVOR PROPERTY: LOW LISTED PBVs AS PROXY FOR THE INDUSTRY 2.25 Khang Dien House NBB Investment Quoc Cuong Gia Lai Sacom Real Thu Duc House 2.00 1.75 1.50 GOLD: AUCTION DEMAND GOES TO ZERO 42,000 taels 36,000 30,000 1.25 24,000 1.00 18,000 0.75 12,000 0.50 6,000 0.25 0.00 Oct-10 Jun-11 Jan-12 Aug-12 Mar-13 Oct-13 Mar-13 May-14 Jun-13 BANK DEPOSITS: BARELY ABOVE INFLATION 14.5 % 13.5 12.5 11.5 10.5 9.5 8.5 7.5 6.5 5.5 4.5 Feb-10 Aug-13 Oct-13 Dec-13 Feb-14 May-14 BONDS: SAME AS BANK DEPOSITS 13 12 % 11 10 Dec-10 Nov-11 Sep-12 Jul-13 May-14 May-09 5YR 2YR May-10 May-11 May-12 May-13 May-14 Sources: DC, SBV, Bloomberg 31 17 8/6/2014 BEST OUTLOOK IN YEARS • The economy has been stabilized and will resume healthy growth • Despite an impressive rally, stocks still have good ratings vs peers • Macro dynamics surpass those of peers and will drive earnings • IPOs will start to happen, slowly but surely • The country has moved on from its bubble-economy crisis • The Government has learned hard lessons about policy • Vietnam is reinstating itself as a top EM investment destination • New infrastrcuture and derivatives market will be in place from 2016 39 PRIVATIZATION • Gov’t wants privatization for both its macro and fiscal benefits • To push privatization, decrees have been pro-actively passed to: - clarify land appraisals - extend time validity of valuation - ease audit requirements - facilitate strategic investors - allow sale of State assets below book value • Some 435 out of 1,000 SOEs have been slated for sale • Certain high-profile companies likely to go in next 18 months 32 18 8/6/2014 PRIVATIZATION EXPECTED IPO 2Q14 EXPECTED IP0 3Q14 EXPECTED IP0 2014 27% cooking-oil market share 20% textile market share Monopoly on airports The industry is booming, internationally, and Vinatex is a major player 22 facilities in operation Production: 700,000 MT Revenue: $1.2bn NPAT: unknown Charter capital: $60m 63% of shares in IPO Revenue: $2.1bn NPAT: $69m Charter capital: $238m Revenue: $400m Profit before tax: $64m Charter capital: $700m 25% of shares in IPO 49% of shares in IPO 33 PRIVATIZATION EXPECTED IPO 2014 EXPECTED IP0 2014 EXPECTED IPO 2014-15 32% market share 114,000 flights Dung Quat Refinery No of three carriers 15m passengers Allowed to drop involvement in expensive Gov’t satellite program 80% occupancy Finance capacity expansion: 6.5m to 10.0m MT and EURO II to Euro IV Allowed to drop merger with Vinafone, No carrier May face valuation challenges Revenue: $3.4bn Revenue: $2bn PBT: $25m PBT: $290m Charter capital: $426m Charter capital: $500m 25% shares in IPO Revenue: $7.1b NPAT: $150m Charter capital: $905m 49% of shares in IPO 34 19 8/6/2014 PRIVATIZATION • Gov’t may also sell down more stakes in listed SOEs – led by PV Gas • Biggest stock on the market at $9.7bn market cap, listed Jan 2012 • But only 3% was floated – despite which it is counted 100% in Index! • PetroVietnam parent has pledged to sell another 21.7% by end-2015 • Target of 16.7-19.7% for strategic investors leaves only 2-5% for public • But shows progressive attitude on strategics, with up to $435m for market 35 INVESTMENT CASES 40 20 8/6/2014 HOA PHAT GROUP (HPG) INVESTMENT CASE HPG is fully integrated in construction steel This has enabled it to impose ruthless cost leadership on the industry and it is steadily gaining market share as the business consolidates Urbanization is at an early stage and steel consumption is well below regional levels, so HPG can hardly avoid strong growth SNAPSHOT • HPG goes from billet, using its own iron ore, to finished re-bar and pipe, manufactured in plants with their own electricity supply • Market share is rising at smaller players’ expense: 15.1% now from 8.6% at end-2009 • Expanding its presence from the North to the Central and South of Vietnam to further grasp market share • More focus on exports starting with a billet export contract to the Philippines which will contribute about 8% of revenue in 2014 • HPG is currently doubling capacity, yet with improving financials: DER of 0.7x now, from 0.9x in 2010 • Earnings will pause in 2015 as a successful property project drops out of the P&L, but the core business will still be moving ahead SHARE PRICE VS INDEX COMPANY INFO Market Cap: $1,165m Price: 51,000 For Room: 4.5% Target: 54,783 Vol (6mo): $1.67m/day Upside: 7.4% 0.80 ASIAN STEEL USAGE / CAPITA, 2011 x 500 VNI 0.70 kg HPG 400 0.60 FINANCIALS Item unit 2013 2014F 2015F Sales $m 897 1,129 1,077 Sales Gro % 12.5 25.8 -4.6 0.40 NPAT $m 93 115 109 0.30 NPAT Gro % 96.6 23.8 -5.0 EPS Gro % 96.6 23.8 -5.0 ROE % 22.2 24.5 22.5 PER x 12.6 10.2 10.7 Yield % 2.9 5.9 5.9 0.50 300 200 0.20 100 0.10 0.00 Sep-13 Nov-13 Jan-14 Mar-14 May-14 CHI MAL THAI VN PHIL IND INDO 40 PV DRILLING (PVD) INVESTMENT CASE A subsidiary of PetroVietnam, the State oil and gas company, and the leading provider of drilling rigs and services It is guaranteed all the business it can take from the parent’s D&E program, which is in permanent high gear as the country’s oil reserves are developed PVD is continually expanding the rig fleet to build out its franchise Yet despite the debt it periodically takes on for this purpose, earnings have outpaced finance charges and stayed briskly on the rise – showing PVD’s mastery of accretive leverage SNAPSHOT • PVD has a 50% market share in drilling but its business is strictly at global day rates – PVN’s favoritism does not extend to pricing • The current fleet is four owned rigs (25-50% margins) and four hires (10% margins) • Two more owned rigs will be added next year, which will drive earnings in 2015-16, after capacity maxes out in 2014 • Drilling is 70% of gross profit and there is a quasi-monopoly in drilling services that accounts for the other 30% • Capex is debt-funded but earnings growth has kept well ahead of the interest burden; net DER is now 0.6x, from 1.3x in 2011 SHARE PRICE VS INDEX COMPANY INFO Market Cap: $1,096m Price: 84,000 0.50 For Room: 8.6% Target: 97,000 0.45 VNI Vol (6mo): $1.63m/day Upside: 15.5% 0.40 PVD 0.35 FINANCIALS Item unit Sales Sales Gro NPAT $m 2015F 0.30 760 863 0.25 7.9 13.5 0.20 100 116 0.15 2013 2014F $m 705 % 24.6 89 NPAT Gro % 42.5 12.3 15.5 0.10 EPS Gro % 20.7 11.4 15.5 0.05 ROE % 22.4 20.1 21.8 PER x 12.2 10.9 9.5 Yield % 2.4 COMPARATIVE RATINGS 2013 x 2.4 2.4 0.00 -0.05 Sep-13 Nov-13 Jan-14 Mar-14 May-14 EPS ± State PER Weatherford CHI 30.4 55.9 Tesco USA 21.4 -27.9 ROE 9.2 Oceaneering USA 21.3 28.0 19.3 Schlumberger USA 20.4 30.8 18.6 Halliburton USA 19.8 -15.5 18.8 TGS Nopec NWY 12.6 -5.9 21.9 Petrofac PV Drilling UK VN 12.4 12.2 2.7 20.7 36.7 22.4 Petroleum Geo NWY 10.6 29.1 12.0 China Oilfield CAN 10.3 47.3 19.3 Transocean CHI 10.0 70.5 8.6 (4.1) 41 21 8/6/2014 VINAMILK (VNM) INVESTMENT CASE VNM is heavily dominant in Vietnam’s foremost consumer business of dairy products As the middle class expands it will continue to leverage robust growth here, backed by muscular finances and distribution that even MNCs have been unable to replicate Despite the attractive fundamentals VNM is still cheap vs Asian peers, whose PERs are on average in the low/mid 20x’s SNAPSHOT • 50-80% market share in major products, based on country’s biggest FMCG distribution - 200,000 POS • State-of-the-art “mega factories” will double milk capacity in 2014, yet net cash keeps rising: it is now $310m or 0.37x equity • Earnings will flatten out in 2014 as margins absorb raw-material cost hikes and other factors, but thereafter margins will stabilize • Once the “gap year” is over, earnings can then follow the top line, where ca 25% growth is achievable • This will come from a combination of recovering demand, increasing per-capita consumption and ongoing market-share capture • The latter will be encouraged by the systematic fashion in which VNM is continually upping its game against foreign competitors SHARE PRICE VS INDEX COMPANY INFO Market Cap: $4,859m For Room: 0.0% Vol (6mo): $3.79m/day Price: Target: Upside: 123,000 154,000 25.2% Sales Gro ASIAN MILK CONSUMPTION VNI 45 VNM LTR'S unit $m 2013 1,467 2014F 1,819 2015F 2,367 % 16.5 24.0 30.1 NPAT $m 310 311 387 NPAT Gro % 12.3 0.4 24.4 EPS Gro % 12.3 0.4 24.4 ROE % 39.6 32.7 33.5 PER x 17.4 17.4 14.0 Yield % 3.9 3.3 3.3 CHI 36 0.15 FINANCIALS Item Sales 0.25 x 0.20 SE ASIA THAI 0.10 27 PHIL MAL 0.05 18 0.00 -0.05 INDO VIETNAM -0.10 -0.15 Sep-13 Nov-13 Jan-14 Mar-14 May-14 1980 1990 2000 2011 42 COTECCONS (CTD) INVESTMENT CASE Vietnam’s leading construction company, whose net-cash balance sheet enabled it to cruise through the property bust It has steadily been shifting its business from the problematic residential area into the infrastructure, commercial and industrial sectors, where FDI is now a huge driver There is much greater activity here, along with bigger project scale, and the clients actually pay SNAPSHOT • Only two or three domestic contractors can compete with foreigners in the premium segment and CTD is one of them • CTD is expanding in the North to tap the ongoing FDI inflows there in manufacturing and processing • It has built two mega-malls for ION, as part of a 20-mall program, and has executed small road and bridge projects for the Gov’t • The new-business strategy has seen gross margins increase to 7.6% from 7.2% in 2013, and 8-9% is targeted by 2015-16 • Net margins have lagged but this is the temporary effect of M&A that is directly related to the new-business strategy • Cash is 63% of market cap and the company has no bank debt Price: 62,000 For Room: 0.0% Target: 84,000 Vol (6mo): $0.11m/day Upside: 35.5% 0.9 0.8 Item unit 2015F 0.6 Sales $m 293 337 371 0.5 Sales Gro % 38.2 15.0 10.0 NPAT $m 12 15 17 NPAT Gro % 17.7 20.3 13.7 EPS Gro % 20 14 0.2 ROE % 11.7 13.0 13.5 0.1 PER x 10.2 8.4 7.4 Yield % 3.2 3.2 3.2 2014F 7% x 0.7 FINANCIALS 2013 IMPROVING REVENUE MIX SHARE PRICE VS INDEX COMPANY INFO Market Cap: $124m 20% VNI 25% 18% 27% 25% 40% 45% CTD 25% 15% 27% 20% 20% 0.4 0.3 0.0 Sep-13 35% 40% 48% 17% 16% 2010 Nov-13 Jan-14 Mar-14 May-14 Apt's 2011 Hospitality 2012 Industrial 2013 20% 10% 2014F Office/Comm'l 43 22 8/6/2014 CASUMINA (CSM) INVESTMENT CASE CSM is Vietnam’s leading domestic tire producer Its traditional products are truck and bus tires with market share of 25%, and motorcycle tires with 20% It is now expanding to higher-tech radial tires In coming years it will enjoy triple benefits: increased revenues from capacity gains, better margins on advanced products, and a further boost to margins from depressed rubber costs This will greatly its enhance its industrial profile and local investors are likely to re-rate it accordingly, from its present derisory 5.6x SNAPSHOT • New radial factory supplies tires that are cheaper than foreign, yet as good; and better quality than unbranded Chinese • With exports also planned (for US, Canada, Australia and India, at zero tariffs), revenue primed to double in 2014-18 • Operating margins will thrive on flat or declining price of rubber: global supply is put at +12% pa to 2017, demand at +2.5% • Divestment of non-core businesses will inflate growth in 2014, but usefully offset depreciation and interest on new plant • 2015 earnings will show this high-base effect, but will normalize to a minimum 15% pa in 2016-17, putting PERs into the 4x’s SHARE PRICE VS INDEX COMPANY INFO Market Cap: $129m Price: 40,500 For Room: Target: 52,000 Vol (6mo): 33.0% $1.23m/day Upside: 28.4% Item unit 2013 Sales $m 149 174 209 Sales Gro % 3.0 17.2 20.0 $m 450 x VNI 0.25 2014F 17 23 2015F % 41.8 35.8 7.0 EPS Gro % 36.9 35.8 7.0 ROE % 33.0 35.8 30.9 PER x 7.6 5.6 5.2 Yield % 5.7 3.7 3.7 replanting New Planting Replanting 350 CSM 350 300 300 250 0.15 250 200 0.10 200 0.05 150 25 NPAT Gro EXCESS GLOBAL RUBBER PLANTING new planting 450 400 K 400 0.20 FINANCIALS NPAT 0.30 150 Plantings typically start producing after seven or eight years 100 100 0.00 50 50 -0.05 Sep-13 Nov-13 Jan-14 Mar-14 May-14 00 2000 2000 2005 2005 2010 2010 2015 2015 2020 2020 44 10 PV TECHNICAL SERVICES (PVS) INVESTMENT CASE PVS is the domestic monopoly provider of marine support services to Vietnam’s oil and gas industry It benefits from the same factors as PV Drilling: a guarantee of all the business it can take from the parent’s ever-advancing D&E program That does not translate into immediate hyper-growth, but the PER of ca 6.5x seems low for the 10-11% NPAT growth the company does offer, given also a strong, high-ROE balance sheet and tempting yield prospects And fleet expansion could transform profit power longer-term SNAPSHOT • PVS generates gross margins of 15-20% from its 20-strong fleet of supply and support vessels, but this is only 45% of revenues • The company wants to build up this business and downplay rig engineering, which has 48% of revenues but margins of just 3-5% • It plans to double the fleet by 2025, eliminating leased vessels in the process, and over time this should pump growth potential • Strong cashflow can be mixed with accretive leveraging, la PVD, to accomplish this without much of a dent in finances • $100m net cash ($290m gross) could see 2014-15 dividends above previous VND 1,200 – maybe up to VND 2,000, for 7.5% yield SHARE PRICE VS INDEX COMPANY INFO Market Cap: $567m Price: 26,800 1.0 For Room: 23.7% Target: 30,500 0.9 Vol (6mo): $3.10m/day Upside: 13.8% 0.8 IMPROVING REVENUE MIX x 0.7 FINANCIALS Item unit 2013 2014F 2015F 0.6 Sales $m 1,200 1,350 1,521 0.5 3.4 12.5 Sales Gro % 12.7 0.4 NPAT $m 74 82 90 0.3 NPAT Gro % 40.9 11.0 9.8 0.2 EPS Gro % 14.8 11.0 9.8 0.1 ROE % 21.7 20.6 20.1 0.0 PER x 7.6 6.9 6.3 Yield % 4.5 4.5 4.5 -0.1 Sep-13 7% Other 7% 45% Marine Services 54% 48% Rig Engineering 39% VNI PVS Nov-13 Jan-14 Mar-14 May-14 2013A 2018F 45 23 8/6/2014 PV GAS (GAS) INVESTMENT CASE GAS is Vietnam’s monopoly operator of offshore gas pipelines and the key gas supplier to power plants and industrial users Growth is being driven by a nice combination of regulated price hikes, rising gas consumption and aggressive capacity expansion The latter is taking place without much of a hit to the balance sheet, where net cash prevails GAS is the biggest listed stock at 16% of the VNI, but has only a 3% float, and further issuance may pique more foreign and ETF interest – especially given undemanding valuations SNAPSHOT • A new pipeline, Nam Con Son 2, will take capacity up by 10% in early 2015 and again by 65% in 2018-20, to an ultimate 18 bcf • The Government will lift gas prices by an average 10% in 2014 and 2015 and meanwhile gas usage is surging by +11% pa • GAS is also the leading supplier of LPG; this is much bigger in revenues, at 40%, than in profits, at 20%, but is still a useful earner • Capex is huge but well-funded by cashflow; currently GAS has net cash of $430m or 0.27x equity, and looks to stay robustly liquid • Although GAS has run hard, its all-round numbers are still in line with the market and attractive vs regional peers SHARE PRICE VS INDEX COMPANY INFO Market Cap: $8,757m Price: 97,500 0.55 For Room: 46.2% Target: 105,000 0.50 Vol (6mo): $1.79m/day Upside: 7.7% 0.45 unit 2013 2014F 2015F Sales $m 3,100 3,397 4,099 Sales Gro % -4.2 9.6 20.7 NPAT $m 582 644 743 NPAT Gro % 25.3 10.6 15.3 EPS Gro % 25.3 10.6 15.3 ROE % 40.6 35.5 36.4 PER x 15.0 13.6 11.8 % 4.3 VNI 3.1 3.1 2013 PER (x) EPS (±%) ROE (%) Yield (x) Toho Gas 39.2 116.6 Petronas Gas 23.1 47.9 3.7 1.5 21.4 China Gas 19.7 24.3 16.6 2.3 1.1 PV Gas 15.0 25.3 40.6 4.3 GAIL India 9.2 3.7 16.3 3.0 Korea Gas neg ptl (3.3) 2.5 GAS 0.40 FINANCIALS Item Yield COMPARATIVE RATINGS x 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 -0.05 Sep-13 Nov-13 Jan-14 Mar-14 May-14 46 HO CHI MINH CITY SECURITIES CORPORATION THANK YOU 24 ... 11.6 23.0 11.0 8.0 1.8 2.1 1.8 6.5 4.3 4.3 15 Military Bank 13,800 8.7 736 1.4 1.6 - -11.3 2.7 34.8 6.6 6.4 4.8 1.0 0.9 0.8 5.8 7.2 7.2 16 ACB 15,700 0.6 686 1.3 - - 8.0 11.0 38.8 17.4 15.7 11.3 ... 1.7 1.7 4.5 4.5 4.5 7.3 7.8 1.0 0.9 0.9 11.1 11.1 11.1 22.8 16.4 1.3 1.3 1.3 6.5 6.5 6.5 28.8 0.9 0.9 0.8 - - - 10.9 9.3 2.7 2.6 2.2 2.7 2.7 2.7 12.6 11.1 2.3 2.0 1.9 3.7 3.2 3.2 38 COMPARATIVE... PV Trans 13,000 11.1 143 0.3 0.3 35.7 37 Hung Vuong Group 24,900 1.6 142 0.3 0.3 30.3 38 Kinh Bac City 10,100 3.1 139 0.3 0.3 39 Vinare 28,800 26.3 138 0.3 - 40 Tifoplast 51,500 11.8 138 0.3 -