VHC is the largest Vietnamese catfish (pangasius) exporter with a ~50% market share in the US – the most valuable market - in 2018, per our estimate. VHC is well positioned to ride on the long-term growth of global seafood consumption and the depletion of wild-caught supply, in our opinion. Strengthening demand, adverse weather and a reduction in whitefish supply turned the pangasius market to deficit and boosted VHC’s margins in 2018, a trend we expect to continue in 2019.
VTP is the second largest postal company in Vietnam with a 21% market share in 2016. VTP’s revenue recorded a 41% CAGR during 2013-2017 thanks to its exposure to e-commerce. E-commerce-related services account for c.55% of VTP’s total revenue currently. Over the last three years, e-commerce sales in Vietnam have rocketed ~87% p.a., per Temasek and Google research.
We attended HSG’s annual general meeting (AGM) on Monday, 14 January 2019. FY2019 management guidance of 9% YoY decrease in revenue trails our forecast while 22% growth in NPAT is higher than our forecast. The latter looks very ambitious, in our view, given a tough industry landscape and weak Q1 prelim results.
HDC is a property firm in Vung Tau city, a tier-two coastal city in southeast Vietnam. The company owns over 400 ha of low-cost land at convenient locations across Vung Tau but has not yet capitalized on this advantage mostly due to a rather quiet property market in the city. Since the end of 2017, property prices in Vung Tau have started to heat up. Market prices for some HDC land plots have increased by 30% to 60% vs a year ago, per management.
We reduce our TP by 2.4% to VND35,400 and maintain our rating at O-PF with a projected TSR of 19.7% mainly due to the application of a lower market turnover assumption. We upgrade/downgrade our 2018/2019 earnings forecast by 3.8%/-1.7% as we raise our earnings forecast for treasury and marginally downgrade our earnings forecast for principal investment due to the underperformance of large holdings in equity securities and bonds.
PTB is a conglomerate with a market cap of USD137mn and three nearly-equal revenue engines - stone, wood, and automobile dealership. However, ~90% of its gross profit comes from the first two segments. We expect revenue and profit of all segments should grow at double-digit rates over the long term thanks to rising paving stone consumption, higher vehicle sales in the domestic market and the likelihood of Vietnam winning market share in the US from China.
We cut our TP by 10% to VND23,400 and downgrade our rating from O-PF to M-PF with a projected TSR of 3.4% mainly due to downward revisions in our 2018/2019 earnings forecasts. The reduction in earnings forecasts are due to (1) an expectation of an NPL spike related to financially distressed companies/projects leading to a surge in provision charges and (2) downward revisions in loan growth leading to lower NII.
We reiterate our MARKET PERFORM rating and target price of VND64,500/share for NVL. We maintain our 2018 NPAT-MI forecast of VND3.1tn (USD136mn, +54% YoY) as a gain from a hospitality asset divestment in Q4 will offset lower-than-expected property deliveries. We estimate VND32tn (USD1.4bn) of locked-up pre-sales of the remaining pre-sold residential units will drive 2019 NPAT-MI growth forecast of 13% to reach VND3.5tn (USD152mn).
We trim our target price by 1% to VND16,700/share and downgrade HT1 to OUTPERFORM from BUY as the stock price has climbed 10% over the last three months. We slightly raise our 2018 recurring NPAT-MI forecast by 2% to VND605bn (USD26.3mn, +7% YoY) mostly due to HT1 cement sales volume growth recovering faster than our expectation. The discrepancy between our 2018 growth forecasts for reported NPAT-MI (+27% YoY) and recurring NPAT-MI (+7%) is due to a significant FX loss in 2017.