Vndirect Securities Corp. · HOSE:VND
Vndirect Securities — Investor Presentation (June 2022)
36 slides from Vndirect Securities's investor presentation, June 2022
Slide 1: Market Strategy June 2022
Market Strategy June 2022 Let’s shine
Slide 2: Executive summary
Executive summary ➢ VN-INDEX experienced negative sentiment in May. Following the sell-off in April, the VN-INDEX continued to suffer from negative sentiment, dramatically fell to 1,218.81pts (-10.8% mtd, -18.7% ytd). Market sell-off momentum could be attributed from: (1) FED tightened monetary poli
Slide 3: Market overview: Negative sentiment spread out
Negative sentiment spread out Market overview May 2022 3
Slide 4: VN-INDEX continued suffer from negative sentiment in May
VN-INDEX continued suffer from negative sentiment in May The VN-INDEX fell off 10.8% month-to-date and 18.7% year-to-date Following the sell-off in April, the VN-INDEX continued to suffer from negative sentiment, dramatically fell to 1,218.81pts (-10.8% mtd, -18.7% ytd). Market sell-off momentum cou
Slide 5: VN-INDEX continued to be top underperformer in May
VN-INDEX continued to be top underperformer in May VN-INDEX had worst performance in May … (data as at … and even in year-to-date performance (data as at 23/05/2022) 23/05/2022) ➢ Vietnam stayed firm in the first 3 months of 2022 amid the downturns of global equity market. But then the sharp fall in
Slide 6: Market liquidity dip further 33% mom in May
Market liquidity dip further 33% mom in May The daily average trading value dip 33.2% Liquidity decreased on 3 main bourses Number of new securities fell to average mom in May 2022 (data on 23/05/2022) (data on 23/05/2022) level in 1Q22 ➢ Average trading value of three bourses decreased 33.2% mom (-
Slide 7: Cashflow analysis: Unexpected sharp decline
Cashflow analysis: Unexpected sharp decline VNSML index and VNMID index continued to sink deeply Money ran away from the market (daily trading value by in May (% mtd) (data on 23/05/2022) category) (data on 23/05/2022) ➢ Both VNSML index (small caps) and VNMID index (mid caps) sank 14.8% and 13.8%,
Slide 8: Cashflow analysis: money ran into Oil sector only
Cashflow analysis: money ran into Oil sector only ➢ In the context of high fuel price due to sanctions imposed on Russia, only Oil sector witnessed money inflows in May, at modest level of 1% mom when money outflows from every other sectors. ➢ Compared to the declining level on 3 main bounces (-33.2
Slide 9: All sectors suffered losses
All sectors suffered losses ➢ As liquidity fell deeply, Financial services dropped 18.0% mtd, becoming the worst industry performer in May 2022. Some sectors are market pillars that underperformed VN-INDEX, such as Banking (-12.5% mtd), Steel (-15.6% mtd). Other sectors that experienced deeper landi
Slide 10: VHM was VN-INDEX's top mover in May
VHM was VN-INDEX’s top mover in May pts % ➢ VHM (+3% mtd) lent the most support to the VN-INDEX in May 2022, followed by EIB (+3% mtd), CHP (+10% mtd), BAF (+20% mtd) and REE (+3% mtd). Other top 10 index movers include COM (+30% mtd), PVD (+2% mtd), ST8 (+26% mtd), BBC (+6% mtd) and SGT (+4% mtd).
Slide 11: Foreign investors maintained net buying in May
Foreign investors maintained net buying in May Foreign investors net bought VND1,260bn in May (unit: Foreign investors net sold VND1,353bn in 5M22 (unit: VNDbn) (data on 23/05/2022) VNDbn) (data on 23/05/2022) ➢ Foreign investors continued to become net buyers with inflow of VND1,260bn in May (at as
Slide 12: NLG, DPM and CTG were among top net bought by foreigners in May
NLG, DPM and CTG were among top net bought by foreigners in May Foreign investors' strongest net buyers in May Foreign investors' strongest net sellers in May (US$m, data on 23/05/2022) (US$m, data on 23/05/2022) Ticker Net Bought Bought Sell Ticker Net Sold Bought Sell NLG 19.0 25.0 -6.0 SSI -29.8
Slide 13: DGC, STB, MWG recorded strong net buying value by foreign investors in 5M22
DGC, STB, MWG recorded strong net buying value by foreign investors in 5M22 Foreign investors' strongest net buyers in 5M22 Foreign investors' strongest net sellers in 5M22 (US$m, data on 23/05/2022) (US$m, data on 23/05/2022) Ticker Net Bought Bought Sell Ticker Net Sold Bought Sell DGC 108 228 -12
Slide 14: Market overview: Factors supporting the market are emerging
Let’s shine Market Factors supporting the market are emerging overview June 2022 14
Slide 15: Catalyst #1: Improved COVID-19 situation in China is good news for global supply chains
Catalyst #1: Improved COVID-19 situation in China is good news for global supply chains The number of new infections in China is on the decline People's Bank of China cut prime lending rate to support China's economic recovery ➢ China eased some social distancing measures in Shanghai, allowing publi
Slide 16: Catalyst #2: Stronger recovery pace of Vietnam economy in the next couple of quarters
Catalyst #2: Stronger recovery pace of Vietnam economy in the next couple of quarters Vietnam's economic recovery will accelerate in the We forecast Vietnam’s GDP to grow 7.1% yoy in 2022F coming quarters. ➢ We expect Vietnam's economy to grow 5.6% yoy (+/- 0.2% pts) in the second quarter of 2022, i
Slide 17: Catalyst #3: Officially deploying an interest rate compensation package of VND40,000bn
Catalyst #3: Officially deploying an interest rate compensation package of VND40,000bn Interbank interest rates slid in May Deposit interest rate edged up slightly in Credit growth has improved since the 5M22 beginning of 2022 ➢ On May 20, the Government officially issued Decree No. 31 on support of
Slide 18: Catalyst #4: Strong business prospects of listed companies in 2022-2023
Catalyst #4: Strong business prospects of listed companies in the period of 2022-2023 We expect the profit growth of companies listed on HOSE in Earnings growth forecast by sectors in the period of the period 2022-2023 to double the rate of the past 15 years 2022-2023 ➢ Companies listed on HOSE have
Slide 19: Concern: Fed has tightened monetary policy more aggressively
Concern: Fed has tightened monetary policy more aggressively Target rate probabilities for 14 Dec 2022 FED meeting Fed announced to begin reducing its balance sheet in Jun 2022 ➢ At its most recent meeting held on May 3-4, 2022, the Federal Open Market Committee (FOMC) voted to increase the Fed fund
Slide 20: Concern: Fed has tightened monetary policy more aggressively
Concern: Fed has tightened monetary policy more aggressively Annualized return of S&P 500 in Fed rate-hike cycles (%) Vietnam’s stock market rose during taper tantrum period (05/2013-10/2014) ➢ According to historical statistics, the U.S. stock market (represented by the S&P 500 index) has recorded
Slide 21: Concern: Fed has tightened monetary policy more aggressively
Concern: Fed has tightened monetary policy more aggressively S&P 500 sector annual returns in Fed rate hike cycles (%) Performance of S&P 500 by sectors over the past four FED’s rate-hike cycles (%) ➢ Sectors that have recorded positive growth and outperformed the S&P 500 in all four of the Fed's la
Slide 22: Recommendation: Very attractive market valuation relative to historical levels
Recommendation: Very attractive market valuation relative to historical levels… ➢ As at 23 May 2022, VN-Index was trading at 13.1x trailing 12-month P/E, which is 24.6% discount to the peak this year and 21.1% discount to the 5-year average P/E. ➢ VN-INDEX's P/E had just fallen below the -2 standard
Slide 23: Recommendation: ...and regional peers
Recommendation:…and regional peers The current P/E of VN-INDEX is equivalent to the level in Market earnings FY22-23 growths to bode well for VN- May 2020, although VN-INDEX has increased by 53% index compared to that time. ➢ We expect market earnings growth of 23% yoy and 19% yoy over FY22-23F whic
Slide 24: Technical analysis view: Expect the recovery to continue in June
Technical analysis view: Expect the recovery to continue in June ➢ The market successfully bottomed out in May ➢ The margin call pressure has cooled down after the VN-INDEX recovered and maintained above 1,200 points ➢ We expect the market's recovery will continue in June. However, the market has no
Slide 25: Performance of the recommended stocks in May
Performance of the recommended stocks in May (data on 23/05/2022) ➢ The list of recommended stocks in May has an average return of 1.7% in the period April 27 to May 23, higher than the 10.0% decrease of VN-INDEX in the same period. ➢ The 3 stocks that outperformed VN- INDEX were PVS (+16.3%), REE (
Slide 26: High conviction investment ideas for June 2022
High conviction investment ideas for June 2022 (data on 23/05/2022) 1-year Stock Upside Investment thesis Target price picks (%) (VND/share) We like BCG for both short and long term with strong net profit CAGR of 45.7% in FY22-24F, regarding to: (1) Large amount of property handover from overlapping
Slide 27: Property sector: Increased headwinds weigh on outlook
Property sector: Increased headwinds weigh on outlook Mortgage rates heat up following rising deposit rates Bond issuance by real estate developers saw spectacular since 2019 ➢ We see increasing headwinds weighing on sector outlook, including: 1) rising interest rate to effect on housing purchasing
Slide 28: Property sector: Faster presales and slower land bank acquisition ahead
Property sector: Faster presales and slower land bank acquisition ahead The HCMC new condo supply is expected to recover Hanoi new condo supply recovery in 2022-23F, driven by from 2022F thanks to loosening regulatory bottleneck a stable contribution from Vinhomes' massive projects ➢ We forecast a v
Slide 29: VNDS Research's recommendations
VNDS Research ‘s recommendations (data on 23/05/2022) Adjusted target Ticker Close price Dividend yield Upside Recommendation Latest report price TCB 34,850 70,000 0.0% 100.9% ADD Link KBC 41,000 81,800 0.0% 99.5% ADD Link SZC 47,700 90,800 3.4% 93.7% ADD Link HPG 36,750 68,500 0.9% 87.3% ADD Link P
Slide 30: VNDS Research's recommendations
VNDS Research ‘s recommendations Adjusted target Ticker Close price Dividend yield Upside Recommendation Latest report price MBB 26,300 40,800 0.0% 55.1% ADD Link BCG 19,900 29,600 4.0% 52.8% ADD Link PHP 19,600 29,200 2.8% 51.8% ADD Link PVD 20,750 31,400 0.0% 51.3% ADD Link MSH 68,500 100,100 5.1%
Slide 31: VNDS Research's recommendations
VNDS Research ‘s recommendations Adjusted target Ticker Close price Dividend yield Upside Recommendation Latest report price VIB 24,800 34,400 0.0% 38.7% HOLD Link VRE 27,350 37,800 0.0% 38.2% ADD Link TPB 30,000 41,100 0.0% 37.0% HOLD Link MWG 130,800 178,100 0.3% 36.4% ADD Link KDH 40,900 54,800 1
Slide 32: VNDS Research's recommendations
VNDS Research ‘s recommendations Adjusted target Ticker Close price Dividend yield Upside Recommendation Latest report price NLG 45,500 56,000 1.6% 24.7% ADD Link KDC 50,300 61,700 1.2% 23.8% HOLD Link HDG 46,000 55,100 3.3% 23.0% ADD Link SCS 168,000 200,800 3.2% 22.8% ADD Link CRE 31,100 36,100 3.
Slide 33: VNDIRECT Research Team
VNDIRECT RESEARCH TEAM Hien Tran Khanh – Research Director hien.trankhanh@vndirect.com.vn Macro & Market Strategy Banking - Finance Industrial – Retail - Consumer Hinh Dinh – Head of Strategic Le Quoc Viet- Analyst Tuan Nguyen – Head of Equity Research hinh.dinh@vndirect.com.vn viet.lequoc2@vndirect
Slide 34: Disclaimer
Disclaimer This report has been written and distributed by Research Department, VNDIRECT Securities Corporation. The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. Unless otherwise stated, this report is based up
Slide 35: Recommendation Framework
RECOMMENDATION FRAMEWORK Stock Ratings Definition: Add The stock’s total return is expected to reach 15% or higher over the next 12 months. Hold The stock’s total return is expected to be between negative 10% and positive 15% over the next 12 months. Reduce The stock’s total return is expected to fa
Slide 36: VNDIRECT Research
VNDIRECT RESEARCH VNDIRECT Securities Corporation 1 Nguyen Thuong Hien Str – Hai Ba Trung Dist – Ha Noi Tel: +84 2439724568 Email: research@vndirect.com.vn Website: https://vndirect.com.vn
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