Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

[Long's View] Vietnam April In A Minute (ACV) 26.04.2018 (Delayed)

Summary

Trading value in derivative market is so closed to listed market (USD 313 Mil vs USD 366 mil).

ACV Airport Corporation of Vietnam (Mkt USD 8.56 bil– Current price VND 88,200/share, P/E FW 35.65x, P/B FW 6.22x, FO 3.53%). Operate all 22 civil airports in Vietnam.

April In A Minute. Macro Flash: PMI at 52.7 points, retail sales up 9.5% yoy, CPI up 0.08%, FDI up 6.3% to USD 5.1 billion ytd (slower than Q1),.

Market Flash: Vnindex down 124.7 point ~ -10.58% mom, most of the losing was due to top 10 stocks ‘performance (65%). The drag down vs ATH is at -12.48%, since 2014 average drop lasted for 16 days and -10,8% (max 29 days and -18.7%). Market cap reduce to USD 136 billion and liquidity stay at USD 367 million daily.

What to expect in May?  Our TA view 2 scenario: best case Vnindex recover at Fibonacci 23.8% (around 1000 points), worst case Vnindex drop to 960-980 zone.


Dear
Value Clients and partners;

Trading value in derivative market is so closed to listed market (USD 313 Mil vs USD 366 mil). Utilities (-1.57%) and energy (-3.15%) lead the drop team, together with real estate (-1.77%) despite Wti and brend price remain at high level. Recovery start in IT (+1.39%) and finance (+2.58%) while the rest of the sectors finish unchanged.

Today’s Markets

  • Indexes : VN-Index -0.25%, HNX-Index +1.27%, Upcom +0.32%
  • Active : HOSE: VIC, VRE, HPG, CTG, VCB. HNX: ACB, SHB, PVS, CEO, PVI.
  • Index movers : Leader: CTG, VCB, SAB. BVH, MBB Laggard: GAS, VIC, NVL, VJC, MSN
  • Foreigner, Buy: FPT, FRT, STB, MSN, VCI. Sell: VIC, VRE, HPG, GAS, VCB.
  • Notice stocks : VRE, CTG, GAS, BID, HSG, HDG, PVT, FMC, PVI, HUT, PGS, QNS, NTC.
  • Trading volume : ~ 271.5 million shares
  • Trading value : VND 7626.3 bil ~ 366 USD mil
  • Foreigner transaction Net: -35.1 mil USD Sell 102.3 USD million and Buy 67.1 USD million
  • Derivative market: Trading value ~ USD 313.7 million, VN30F1805@ 1,019; VN30F1806@ 1,025; VN30F1809@ 1,045; VN30F18012@ 1,071.5

Corporate update:

  • ACV Airport Corporation of Vietnam (Mkt USD 8.56 bil– Current price VND 88,200/share, P/E FW 35.65x, P/B FW 6.22x, FO 3.53%). Operate all 22 civil airports in Vietnam with total designed capacity is 89.75 mil passengers. ACV served 94 mil passengers (+16% yoy, 121% capacity), 1.3 mil tons of cargo (+19% yoy), 611k flights in 2017.Airports in Vietnam are full of travelers, especially in main city.
Investment highlights:
  • Sustainable growth of aviation. 2017 growth of passengers served was 16% and of flight was +9% from 2012-2017, one of the fastest growth in the region. The company only plan 8% growth of Passenger this year
  • The firm plans to expanse its total capacity by 50 or 52 mil passengers to meet strong growth. In detail, ACV will double capacity of SGN to 45 mil pax, raise T2 Noi Bai capacity by 15 mil pax, CXR’s by 5 mil pax, PQC’s by 1 mil pax, DAD’s by 4 or 6 mil pax, Chu Lai’s by 5 mil pax. In long term, ACV projects to build Long Thanh airport with total capacity up to 100 mil passengers per year.
  • Domestic fees has risen since 01st Oct, 2017 into 3 stages, according to Decision no. 2345/QD-BGTVT. We expects this adjustment will add about VND 594 bil in 2018 and VND 894 bil since 2019.
  • BSC forecast that total revenue and EAT will be VND 16,273 bil (+18% yoy) and VND 6445 bil (+43% yoy), excluding FX losses vs ACV’s plan of VND 16,029 bil of sales and VND 5,665 bil of Net income. Q1’s Net income rise to VND 974 billion vs VND 525 Bil in Q1 2017
  • Catalysts: State divestment, built T3 Tan Son Nhat, Upgrade Cat bi, Phu bai and Vinh
  • Risks: Operational of newly invested airports, the transfer valuation of runway, JPY appreciation risks, Passenger and cargo overload.

Comments:

  • April In A Minute. Macro Flash: PMI at 52.7 points, retail sales up 9.5% yoy, CPI up 0.08%, FDI up 6.3% to USD 5.1 billion ytd (slower than Q1), net export USD 0.7 billion but export grow only 4.1% yoy (due to Samsung heavily exported S9 S9* in March), interest and exchange rate stable. Market Flash: Vnindex down 124.7 point ~ -10.58% mom, most of the losing was due to top 10 stocks ‘performance (65%). The drag down vs ATH is at -12.48%, since 2014 average drop lasted for 16 days and -10,8% (max 29 days and -18.7%). Market cap reduce to USD 136 billion and liquidity stay at USD 367 million daily. Among groups of stock, Midcap and small cap only fell around 3.6% and 2% last month. The only good news is that valuation now is more reasonable with P/E of 18.8 for Vnindex and 14.3 for HNXindex; Foreigner net bought close to USD 80 million.
  • What to expect in May? Global market: US’ G bond 10 year rise, Trade war, tension in Middle East (Iran, Syria), North and South Korea… Domestic Market: National Assembly 2018 (20th May and last for 1 month, normally market is quiet), margin policies can be reconsidered, Cover warrant is planned to launch in May… Our TA view 2 scenario: best case Vnindex recover at Fibonacci 23.8% (around 1000 points), worst case Vnindex drop to 960-980 zone.

Graph of the day 03rd May 2018: P/E of main Asian markets

2.png

Source: Bloomberg