We attended BSR’s AGM today. Shareholders questioned BSR’s first-half business result, 2018-2022 guidance, the plan to sell the Government’s 49% stake, the timeline of moving to HOSE and progress on divesting from a bio-ethanol company.
We revise up our target price for BVH from VND88,250 to VND92,050, indicating a MARKET PERFORM rating and a total upside of 8.8%, including a 1.2% dividend yield. Q1 2018 net profit climbed 13% Y-o-Y despite a conservative provisioning approach reflected in math reserve expense growth of 87.4% Y-o-Y. We foresee net premia growing at 24.1% CAGR in 2017-2021 while maintaining our combined ratio assumption of 96% in 2018 from 98% in 2017, driven by better claims management and higher growth
We reiterate our BUY rating and raise our TP by 3%, offering a total return of 45.0%. We maintain our positive outlook on NIM expansion as (1) a higher portion of retail lending can continue driving up yields and (2) a strong CASA ratio helps stabilize funding costs. Management has emphasized strong efforts to boost fee-generating income streams with NFI growing 35.5% Y-o-Y in Q1 2018.
We downgrade VIC to OUTPERFORM from BUY and lower our target price 11% to reflect VIC’s lower stake in residential projects following the Initial Equity Offering (IEO) of Vinhomes (VHM). Despite the sideways move in Q1 2018 earnings, we expect higher-margin deliveries at its landed property developments (e.g., Imperia and Harmonia) to accelerate earnings in coming quarters, boosting our 2018F NPAT-MI growth of 42% to VND6.0tn (USD263mn).
We reiterate our BUY rating on QNS as we believe it is undervalued at a 2018F PER of 9x after having fallen 43% over the past 12 months. However, we raise our discount for a sum-of-part valuation from 20% to 30% due to QNS’s continual capital misallocation with new investments in the sugar business. Per our projections, QNS’s return on invested capital (ROIC) will deteriorate from a peak of 36% in 2015 to 19% in 2020.
We lower our target price by 15% but change our rating to OUTPERFORM from MARKET PERFORM on NVL following the stock’s sharp 25% correction since our last update. Our target price revision mainly reflects our expectation that the launches of a number of NVL’s residential developments will be further delayed. Despite a slow Q1 2018, which trailed our 2018 forecast, we expect a faster pace of handovers and one-off gains from consolidating some projects to underpin our 2018F NPAT-MI growth of
2018 revenue and NPAT are expected to rise 6.6% and 87.2% YoY thanks to a 10% ASP increase, which in turn is being driven by a supply shortage in the raw pangasius market since Q4 2017. As ANV is 100% self-sufficient in raw fish thanks to its 250-ha of farming area, GPM is expected to widen by 2.8 ppts to 17.5% in 2018, equivalent to a 27.3% increase in gross profit. However, its lack of developed markets still raises concerns on revenue stability and bargaining power for the long term.
We downgrade our TP by 11.8% with MARKETPERFORM rating for STB, total downside is 1.2% as resolved legacy assets were yet to be reflected in Q1 2018’s total figures. NIM increased by 64 bps Y-o-Y to 2.1% in Q1 2018, but this level is still low compared to both our SOCB and private banks groups at 2.8% and 3.5%, respectively due to high funding costs. Reported NPL ratio in Q1 2018 was 4.0%.
We initiate our coverage on HDB with an M-PF rating and 5.7% total return, including a dividend yield of 3.6% and a quasi-dividend yield of 7.2% (resulting from a compulsory M&A related share buyback at 13,000 per share). We expect HDB’s consolidated NII to grow at a 21.4% CAGR in 2017-2020 and remain a primary factor in TOI at ~88% while we don’t see any exciting story from NOII in the medium term. We forecast HD Saison’s consumer finance loan book and HDB standalone’s retail loan book will
We downgrade TCM to MARKET PERFORM with a 5.0% total stock return. We cut our target price by 19% to reflect (1) higher-than-expected selling expenses and (2) an updated peer list to improve comparability. We forecast 2018 revenue and NPAT to grow by 5.0% and 10.5%, respectively, due to (1) a high base in 2017, (2) continued strong growth in export sales to Japan and (3) slow productivity improvement at its Vinh Long factory.