We attended MWG’s AGM on March 22, 2019, which welcomed more than 500 shareholders. The Q&A session, which was hosted by MWG’s division heads along with the Chairman, mainly focused on the minimart chain (BHX). Management set upbeat 2019 targets, including revenue of VND108.5tn (USD4.7bn, +25% YoY) and NPAT of VND3.6tn (USD153mn, +24% YoY). We believe MWG can surpass its NPAT guidance as we currently project 2019 NPAT to jump 29% vs 2018.
We lift our TP by 1.3% to VND15,200 and maintain our O-PF rating with a projected TSR of 18.7%, mainly because we increase our 2019 net income forecast to VND2.2tn (+22% YoY, USD94mn), but the lift in TP is minor as we adjust downward our 2020 net income forecast. We adjust our 2019/2020/2021/2022 net income forecasts by 11%/-12%/5%/3%, respectively.
We reiterate our MARKET PERFORM rating for VIC while revising up our target price by 6% to VND118,000/share mainly on updating the company’s net debt balance as of end-2018. We lower our 2019F NPAT-MI forecast by 19% to VND4.2tn (USD184mn, +27% YoY) mainly due to an increase in our projections for depreciation cost and SG&A expenses for the manufacturing segment, which was partly offset by a lower effective hospitality loss as VIC reduced its ownership at Vinpearl.
DHC is a mid-size packaging paper company located in the Mekong Delta with a market share of c. 2% in 2018, per our estimate. The company is well positioned to capture paper consumption growth in Vietnam thanks to its 4.5x capacity expansion plan and new Chinese policies restricting paper production. Despite recent policy hiccups in recovered paper imports, due to environmental concerns, we see signs that the Government is relaxing its regulations to promote local production.
We cut our TP by 9.3% to VND32,100 and maintain our rating at O-PF, with a projected TSR of 13.4%, mainly due to a revision of our 2019/2020/2021 earnings forecasts by -13.1%/-9.1%/-7.1%, and the application of a lower 2019 target P/B multiple of 1.45x, down from 1.5x previously. We lift our 2019/2020/2021 total operating income (TOI) forecasts by 1.4%/2.3%/3.7%, given 2018 gains from HTM securities surpassed our forecast by 11.8% and the growth outlook for HTM securities.
We attended DXG's annual general meeting (AGM) on Saturday, March 16, 2019. Shareholders approved 2019 guidance with net revenue of VND5tn (USD217mn, +8% YoY) and NPAT-MI of VND1.2tn (USD52mn, relatively flat YoY). Shareholders approved a rights issue plan with a 4:1 ratio (four existing shares have a right to buy one new share) at VND10,000/share. No detailed timeline was provided. Proceeds are estimated at up to VND875bn (USD38mn) and will be mainly used to fund the Gem Riverside
We increase our target price (TP) by 3.7% mainly due to 4.2%/8.0%/5.5% upward projections in our earnings for 2019/2020/2021 and a 1.8% higher forecast for 2019 total equity. We maintain our rating at OUTPERFORM. Our earnings forecast increases are entirely due to an average 25% upward revision in NFI and an average 29% downward projection for provision expenses during 2019F-2021F. Our expectations for higher retail fee income and clearance of VAMC debt in 2019 drive the above revisions.
We maintain our MARKET PERFORM rating on TCM but raise our target price (TP) 22% to VND30,500, resulting in a projected TSR of minus 5.0%. Our revised TP mostly reflects a 14% increase in our aggregate recurring NPAT-MI forecast over 2019-2023 to factor in higher-than-expected revenue growth and margin expansion in 2018.
We trim our TP by 4.7% to VND22,300 and maintain our M-PF rating with a projected TSR of 2.0%, mainly because we lower our net income forecast in the medium term given growth constraints and the prospect of any relief on tier 1 capital shortage in 2019 highly unlikely. We lift our 2019 net income forecast by 2% to VND7.1tn (USD305mn, +31% YoY) due to a 22% downward revision in our provision expenses forecast as we believe a series of loan classification downgrades in 2018 was a one-off event.
PVT’s AGM today was very crowded, reflecting high investor interest in PVT. Most of the questions focused on the long-term transportation contract for Nghi Son refinery (NSR), 2019 guidance and the Government’s divestment plan. Management guides for 27.0% and 48.1% declines in 2019 revenue and NPAT, respectively, which is conservative, as always. We forecast reported 2019 NPAT-MI to decline 6.8% YoY while recurring 2019 NPAT-MI increases 7.0% YoY, driven by contribution from NSR.