vietnam stock market update q3.2015

VIETNAM 2015 MID YEAR UPDATEVIETNAM 2015 MID YEAR UPDATE

IF NOT NOW THEN WHEN ?

Mr. Tran Thang Long

HEAD OF RESEARCH

BIDV Securities Company

Email: [email protected]

Phone: +84 4 39352722 (118)

Mobi: +84 906 959 034

1

CONTENTS

BIDV SECURITIES COMPANY

Overview of BSC and BIDV 3

Why we will be your trusted partners 7

VIETNAM ECONOMY

China and Greece Update 9

2W: www.bsc.com.vn Bloomberg : BSCV <GO> email :[email protected]

Vietnam economy overview 13

Turning Around 17

VIETNAM STOCK MARKET

Vietnam stock market review 18

Sectors review 25

BIDV Securities Company (BSC)

Solid Foundation.

BSC was founded in 1999, IPO in 2010, listed in 2011

in Ho Chi Minh Stock Exchange (BSI) As a subsidiary

of BIDV (88%) with total Equity of USD 40 million.


of BIDV (88%) with total Equity of USD 40 million.

BIDV was established in 1957, listed in 2014, total

Equity of USD 1,7 Billion and total asset of USD 27

billion, the 2nd largest Bank in term of capital and

asset, the largest customer database of over 140,000

corporations (state owned and private).

BIDV Securities Company (BSC) & Services

We are yourBrokers.

Our Brokerage Team serves 75,000


Our Brokerage Team serves 75,000 accounts with high commitment to service quality and customer satisfaction. We ranked 1st for bond and 10th for stock since 2013 (Hsx 10th, Hnx 6th).


We are yourInvestment Bankers.Our IB Team have been chosen by more


Our IB Team have been chosen by more than 320 clients, raised USD1 billion of corporate bonds and made 3 of the largest IPO (Vinatex, BIDV and Vietnam Airlines) in the last 2 years. Alpha South East Asia "Best Investment Bank Vietnam 2014“ & “Best Debt Capital House 2015” by Asian Money


We are yourAnalysts.


Our Research Team of 15 analysts published close to 800 reports and supports clients by their deep understanding of Vietnam Macro-economy, the stock market and a wide range of industries.


No Reports Frequency Annually

1 Stock market Daily Report Daily 250

2 Stock market Weekly Report Weekly 50

3 Investment Advisory report Weekly 50

4 Vietnam Fixed Income Daily Daily 250

5 Vietnam Fixed Income Monthly Monthly 12

We publish our research in three languages: English, Vietnamese

Language barrier? No more.


5 Vietnam Fixed Income Monthly Monthly 12

6 Stock and Macro Monthly Monthly 12

7 Quarterly Stock and Macro Quarterly 4

8 Quarterly Sectors outlook Quarterly 4

9 Company visit note /update As request 100

10 Company reports As request 50

11 Sector report As request

12 Special Report (IPO, OTC,…) As request

languages: English, Vietnamese and Japanese

BIDV Securities Company (BSC) & Clients

Let we be yourTrusted Partner.Being one of the earliest


Being one of the earliestsecurities in Vietnam meansthat we understand deeplythe market of Vietnam.75,000 Clients trusted BSC.How about you ?

VIETNAM ECONOMY

TURNING AROUNDEnd of the tunnel


WORLD MARKET & CHINA STOCK BUBBLE

0

1000

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7000

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Shanghai & Shenzhen SE Comp IndexTrading value pass over the U.S

10Source: Bloomberg

01/2

007

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Shanghai SE Composite Shenzhen SE Composite

•Shanghai Composite index soared 135%, Shenzhen index soared 170% to 3141. •Monetary policy easing, benchmark rate cut, reserve requirement cuts.•Margin lending 2.3trn RMB, or 8.8% of free-float, the highest level ever•China have 4 million accounts open per week (1/7 Chinese)•More than 66% trader haven’t finished high school.

Margin / floating rate : near 9 %

WORLD MARKET & CHINA STOCK BUBBLE

China GDP

6

7

8

9

10

11

12

13

Cinderella dance turns to midnight•The Chinese stock market may get a bounce here and there, but the worst is yet to come.•Real GDP growth is clearly tracking meaningfully below the government's full-year target of 7%. •if the Chinese economy fell sharply, Vietnam

11Source: Bloomberg

5

•if the Chinese economy fell sharply, Vietnam might significantly impacted.

•Vietnam exported to China may decline (domestic demand reduce) •Vietnam imports from China may increase because the goods relatively cheaper the Yuan devaluation and manufacturers to push export prices.•Investor will transfer capital to new markets. Especially in the context of Vietnam has emerged and caused a lot of attention in the eyes of investors. Wait and see.

WORLD MARKET & GREECE

12Source: Bloomberg

The Euro area would be better off without Greece, but it is not an one off issue. Ireland, Italy, Spain, and Portugal will be next ? EU reduce demand? EUR devaluation ?

7.78.4 8.17 8.48

6.235.32

6.78

5.895.03 5.42 5.98

6.28

0123456789

Annual GDP growth rate (%yoy)

VIETNAM ECONOMY & The Growth turn around


Source: GSO, HSBC, ANZ, TCHQ, BTC, SBV, Bloomberg

-5%

0%

5%

10%

15%

20%

25%

30%

Vietnam inflation rates

0

4

8

12

16

Borrowing Rate Lending Rates

Deposit – Lending Rates

VIETNAM ECONOMY & The Rates turn around

Exports – Imports Growth rate (15%yoy)

68.8

84.0

105.0114.4

131.3

148.0

81.5

56.5

71.6

96.0

114.6

132.2

150.0

77.7

-6

-4

-2

0

2

4

80

100

120

140

160Imports Exports Net

71%

12%

5%2%

2% 2%1%

FDI

21.5

18.6

14.7

13

21.620.2

1011 11

10.5 11.512.4

10

15

20

25Registered Disbursed


Source: GSO, HSBC, ANZ, TCHQ, BTC, SBV, Bloomberg

56.5

-14

-12

-10

-8

0

20

40

60

2009 2010 2011 2012 2013 2014 2015H1

5.49 6.3

0

5

10

2009 2010 2011 2012 2013 2014 2015H1

• Trade deficit will be widen (FTAs will make it worse)• FDI slow down (notice that FTAs will bring more inflow in the next years)•Oil price have negative affect to state budget and trade balance

VIETNAM ECONOMY & Vietnam Dong ?

USDVND rates rates since 2014

85

90

95

100

105

21100

21300

21500

21700

21900

USDVND rates since 2013

15Source: Bloomberg

Compared with 2009 after-crisis Asia market. VND only devaluate

4.8% since 2013

75

80

20700

20900

06/2014 09/2014 12/2014 03/2015 06/2015

Dollar Index Free Rate Interbank RateSBV Rate SBV Rate Band

VIETNAM ECONOMY & The real estate turn around

16Source: CBRE Vietnam Q2/2015

•Increasing sales volume pushing prices up. •Unsold Unit Diminishing.•Buy-to-let investors back to the market.

2015 MACRO ECONOMY OUTLOOK

Criteria/Month2015

2015M

1

2015M

2

2015M

3

2015M

4

2015M

5

2015M

6

GDP yoy (%) - - 6.08 - - 6.44

GDP ytd yoy (%) - - 6.08 - - 6.28

PMI 51.5 51.7 50.7 53.5 54.8 52.2

Car Consumption (unit) 19,979 12,329 16,399 18,178 17,921

IIP yoy (%) 17.5 7 9.1 9.5 7.5 11.1

IIP ytd yoy (%) 17.5 12 9.1 9.4 9.2 9.6

Retail Sales yoy (%) 13 11.6 9.4 7.1 9.3 9.2

BSC forecast 2015F

GDP (yoy) 6.2% - 6.5%

Inflation (yoy) 2% - 3%

Registered FDI20 - 22


Retail Sales yoy (%) 13 11.6 9.4 7.1 9.3 9.2

Retail Sales ytd yoy (%) 13 11.4 10 8.8 9.1 9.8

Retail Sales (price adj) (%) 11.9 10.7 9.2 8 8.2 8.3

CPI mom (%) -0.20 -0.05 0.15 0.14 0.16 0.35

CPI yoy (%) 0.94 0.34 0.93 0.99 0.95 1.00

FDI Registered (bil USD) 0.66 1.19 1.84 3.72 4.29 5.49

FDI Disbursed (bil USD) 0.5 1.2 3.05 4.2 4.95 6.3

Exports (bil USD) 12.90 23.01 35.70 50.10 63.20 77.70

Imports (bil USD) 13.40 23.07 37.50 53.10 66.20 81.50

Trade balance (bil USD) -0.50 -0.06 -1.80 -3.00 -3.00 -3.80

FX rate (VND/USD) 21,317 21,348 21,555 21,590 21,815 21,839

Credit Growth (%) 0.03 0.65 1.25 2.78 4.26 6.28

NPL rate 3.49 3.59 3.81 - - -

Registered FDI

(USD bil)20 - 22

Executed FDI

(USD bil)11 - 12

Trade balance

(USD bil)(7) - (8)

USDVND rate 21,673

Lending rate 8% - 10%

Deposit rate 5% - 6%

VIETNAM STOCK MARKET

IT IS TIME FOR VIETNAM

18

IT IS TIME FOR VIETNAM

VIETNAM STOCK MARKET & from 2007 to 2015

Compared with 2009 after-crisis

Asia market

Vietnam is

Pass 2007

19

Vietnam is extremely

lagging behind

China stock index and

Vnindex are similar

Source: Bloomberg, As of July 14th 2015

Pre Crisis Top

China rocketAbenomic

VIETNAM STOCK MARKET & Not the matter of Valuation

•Thailand 19.7•Indonesia 21.9

Southeast Asia Stock Market in 2015

20

•Indonesia 21.9•Philippines 20.8•Malaysia 16.9

Vietnam P/E is 13.6

So it is not the valuation that matter

Source: Bloomberg, As of July 14th 2015

VIETNAM STOCK MARKET & Size is matter

The Biggest stocks More to be listed.

VCB, 10.7%

GAS, 9.1%

Others, 26.8%

VCB

GAS

VNM

CTG

VIC

BID

MSN

BVH

STB

HPG

ACB

MBB

EIB

Average Trading Turnover Over $100 mil per session.

147

208

159 157 142150

200

250

Mio USD

21

Total Market cap of USD 59.92 billions .The 10 Biggest stocks have the market cap from 1 to USD 6.4 Billion. The next 10 stocks have the market cap from USD 7.1 billion. 90% is below 100 mil USD market capital.

Nguồn: Bloomberg, SBV, GSO, HSBC, ANZ,… Phòng Phân tích BSC Ngày 14/07/2015

VNM, 9.0%

CTG, 6.5%

VIC, 6.2%

BID, 5.7%MSN, 5.2%BVH, 3.4%

STB, 1.7%

HPG, 1.6%ACB

MBBEIB

FPT

PVD

HAG

PVS

DPM

SSI

EIB

FPT

PVD

HAG

PVS

DPM

SSI

KDC

MWG

MPC

SHB

Others

101 87110

147

100

121

86

111

97

98

-

50

100

150

05/14 07/14 09/14 11/14 01/15 03/15 05/15

Average Turnover 3 per.Mov.Average

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

200

400

600

800

1,000

1,200

1,400

Vietnam Stock Market – Potential Cycle

VN-index2000-2015

VnindexDown 43,8%

0

50

100

150

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F

0

50,000,000

0

200

Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14

Volume VN-Index

22

10 year cycle will be back ?

Vietnam GDP2000-2014

USD 77 Bil2007

USD181 Bil2014

Vietnam GDPrise 135%

Source: Bloomberg, GSO, BSC

Comparison Asian Market Vnindex Inflow.

VIETNAM STOCKMARKET & Vnindex Inflow

Countries June Q2/2015 1H2015

India (833) 262 6,261

Indonesia (307) (123) 312

Foreign Indirect InvestmentMore to accumulated.

23Source: Bloomberg, GSO, HSX, HNX, BSC

Indonesia (307) (123) 312

Japan (3,385) 37,318 30,841

Phillipine (258) (663) 405

Korea (18) (18) 7,345

Sri Lanka (20) (8) 14

Taiwan (311) (2,619) 2,050

Thailand (311) (211) (467)

China (46,660) (46,660) (94,740)

Pakistan 17 67 (74)

Vietnam

(HSX) 50 179 91

VIETNAM STOCK MARKET & New cycle of grow

FTAs and FDI

SOE & Bank

Reform

FII & FOL

G


China

FED

G Spendi

ngPre Crisis Top

China BubbleNPL

EU

SECTOR REVIEW

25

wrong move checkmate

MOVEMENT OF STOCK MARKET AND SECTORS IN 2Q-15

W: www.bsc.com.vn Bloomberg : BSCV <GO> email :[email protected]

•Besides the leading role of the Bank sector, someother sectors rated by BSC as "Positive" such asConstruction Materials, Insurance, and IT haveoutperformed VNIndex•Sectors rated as "Neutral" or "Negative" didn’tperform well, including Plastics, NaturalRubber, Pharmaceutical, Fisheries, Steel and Oil &Gas•A few sectors rated “Positive” didn’t increasemuch compared to VNIndex such as RealEstate, Construction, Electrical, and Textile

INVESTMENT STRATEGY 3Q 2015

Influential policies and critical economic factors in 2015

27

2015


New issues in 2Q 2015•Decree 60/2015/ND-CP – Loosening investment room for foreign investors•Impacts from the strong decline of China’s stock market and the slowing down of China's economic growth•Uncertainties in the Eurozone

• "Firstly, the revival of Macroeconomics was clearer". Banking, Insurance, Real Estate will

Notable investment themes of 2015

28

• "Firstly, the revival of Macroeconomics was clearer". Banking, Insurance, Real Estate willfirst benefit from this recovery

• "Secondly, Real Estate warmed again, soaring liquidity." Leading to the growth of theConstruction and Building Materials.

• "Thirdly, energy prices decreased and electricity prices increased." Supporting businessresult of the Plastic, Transport, Fertilizer enterprises and indirectly affect to Consumerenterprises

• "Fourthly, ECB and JCB loosed monetary, EUR and JPY depreciated". The dollarcontinued to appreciate against the EUR and JPY

• “Fifthly, the free trade agreements (FTA)". The sectors whose large export turnover willreceive positive impacts from the FTA: Textile, Aquaculture, Footwear, Automotive Trade ...while competitive pressures will increase in sectors such as Steel, Fertilizer, Sugarcane, …sectors will benefit indirectly include Marine Shipping, Seaport and Industrial Zone.

New investment highlights

Information Technology: We expect the IT sector will grow in step with the recoveryof the economy. The main fields include (1) Software Solution; (2) Integrated Systemand (3) Telecommunication

Seaport: (1) Import-export activities expected to maintain high growth thanks to thesigning of free trade agreements;(2) Infrastructure investment is being promoted;(3)Efficient port utilization can be improved thanks to the strong participation of the


Efficient port utilization can be improved thanks to the strong participation of theprivate sector;(4) The seaport companies are undervalued compared with potentialgrowth.

Insurance: (1) Insurance sector recovered together with macroeconomics; (2)Penetration of non-life insurance in Vietnam remained at 0.7%; (3) Free tradeagreements will boost insurance demand ascargo, shipping, shipbuilding, automotive insurance ... (4) Stricter legal provisions oninsurance; (5) Improved investment performance due to the recovery of stockmarket.

29

We maintain POSITIVE rating for the sectors: Real Estate, Construction, Building materials(Cement), Textile, Electric Power, Tire, Banking, adding Seaports, Insurance and IT. According toseasonal factor, the last 6 months is also the time of increase in revenues and profits of someindustries including Textile, Aquaculture, Marine Shipping, Building Materials and Construction.


30

BANKING SECTOR - POSITIVE

Credit Growth

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

Non-performing loans sale for VAMC

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Credit grew positively in the first few months of 2015, the interest rate level fell slightly, NPL

ratio decreased. In addition, commercial banks are to increase their provision and sell non-

performing loan, leading to the possibility of year-end NPL may fall under the 3% target.

We maintain a POSITIVE rating with banking sector. This is the sector that has the most

influence on VN-Index. Credit growth is predicted to remain positive due to (1) economy

recovery, (2) low lending rate, (3) more short-term capital for mid and long-term loans (rise

from 30% to 60%).

31

-2.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Năm 2013 Năm 2014 Năm 2015

--

Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015

Nợ xấu VAMC mua (cột trái) Lũy kế (cột phải)

BANKING SECTOR - POSITIVE

In terms of stocks, besides the three largest commercial banks

(VCB, BID, CTG) which prices have risen significantly since the

beginning of 2015, we assume that second tier listed commercial

banks need to be under consideration such as ACB, MBB, EIB,…

32

TickerEAT 2014(billion VND)

EAT 2015F(billion VND)

EPS

2015FP/E FW P/B FW

Closing

Price

31.12.2014

Closing

price

31.3.2015

Closing

price

30.06.2015

ChangeTarget

price

VCB* 5,876 5,499 2,063 23.65 2.94 31,200 34,400 48,800 56.41% 61,900

BID* 4,948 5,724 2,036 10.36 1.78 12,000 16,600 21,100 75.83% 27,800

CTG* 5,712 5,690 1,528 12.57 1.30 13,100 16,500 19,200 46.56% 23,000

MBB 2,476 2,554 2,070 7.29 1.05 13,100 13,700 15,100 15.27% 16,600

ACB* 952 1,014 1,131 18.13 1.48 14,800 16,000 20,500 38.51% 24,600

REAL ESTATE SECTOR – POSITIVE

Updates for 6 months of 2015

• The real estate market continues to show positive signs: based on (1) The number of successful

transactions rose sharply; (2) Selling price is stable

• Circular 200 does not cause big impact on real estate companies

• Lossen provisions of foreigners being able to purchase and onw real estate property since 01/07

• Credit for real estate increased by 11% yoy• Credit for real estate increased by 11% yoy

We keep our POSITIVE assessment to the real estate sector and remain our opinion that it will be

capable of being the leading industry together with the banking sector this year

33

TickerRev

2014

EAT

2014

Rev

2015

EAT

2015

EPS

2015P/E F

P/B

F

Closing

price

31/12/2014

Closing

price

31/03/2015

Closing

price

30/06/2015

ChangeTarget

price

VIC* 27,727 3776 35,671 4649 3,196 14.00 5.41 47,700 47,000 43,500 14.78 % 53,000

DXG* 523 168 716 258 2,562 6.50 2.47 14,000 17,000 16,300 36.97% 17,000

KBC 1,069 326 2,182 615 1,293 12.92 1.12 15,900 16,000 15,500 -2.52% 20,400

KDH 631 102 1,252 202 1,600 14.06 1.22 20,200 21,900 21,700 7.43% 25,100

CONSTRUCTION SECTOR – POSITIVE

Updates for 6 months of 2015

• Construction value for 6 months of 2015 is up 6.8% yoy.

• The recovery of real estate sector

• Manufacturing and processing industry attracts foreign investors

• Transportation infrastructure projects continue to be implemented and accelerated

We keep our POSITIVE assessment of construction industry in 2015. We recommended BUY and long-

term holding with LCG, HUT and CII. Additionally, we represent a new potential stock (HBC) with BUY and term holding with LCG, HUT and CII. Additionally, we represent a new potential stock (HBC) with BUY and

HOLD for long-term.

34

Ticker

Rev

2014

(bil

dong)

EAT

2014

(bil

dong)

Rev

2015E (bil

dong)

EAT

2015E (bil

dong)

EPS

2015

P/E F

2015

P/B F

2015

Closing

price

31/12/14

Closing

price

31/3/15

Closing

price

30/6/2015

ChangeTarget

price

LCG 1,266 -12 1,467 45 593 13.5 0.62 8,500 7,000 8,000 -5.88% 11,400

HUT* 2,762 259 2,316 145 1,129 10.36 1.04 14,200 15,500 11,700 -7.87% 13,551

HBC 3,518 69 5,300 180 2,414 9.94 1.64 14,800 17,900 24,000 62.16% 26,549

CII* 2,606 388 3,145 462 2,366 10.02 1.15 20,300 18,500 23,700 24.74% 28,388

TECHNOLOGY SECTOR - POSITIVE

Technology – Telecommunication Sector will have

many potential opportunities to grow from 2015

thanks to (1) The boosting in Software solution field

(2) The increase in companies’ disbursement for

Information system service (3) Increasing investment

in telecommunication infrastructure.

We recommend POSITIVE assessment to Information We recommend POSITIVE assessment to Information

Technology & Telecommunication sector in the last 6

months of 2015 and notice several stocks including

FPT, CMG, ITD, HIG.

35

Ticker

Rev

2014

(bil

dong)

EAT

2014

(bil

dong)

Rev

2015E

(bil

dong)

EAT

2015E

(bil

dong)

EPS

2015

P/E F

2015

P/B F

2015

Closing

price

31/12/14

Closing

price

31/3/15

Closing

price

30/06/15

ChangeTarget

price

FPT* 32,645 2,079 39,600 2,359 4,682 9.91 2.14 48,000 48,400 46,400 13.45% 56,186

CMG 3,265 118 3,093 155 1,800 8.67 1.31 8,900 11,300 15,600 75.28% 15,668

ITD 448 20 540 33 1,795 9.67 1.14 9,300 12,800 19,000 104.30% 17,357

HIG 503 5 575 11 506 14.22 0.42 4,600 5,100 7,200 56.52% 7,592

INSURANCE SECTOR - POSITIVE

We recommend Insurance sector because:

(1) Insurance sector recovered together with macroeconomics; (2) Penetration of non-life insurance in

Vietnam remained at 0.7%; (3) Free trade agreements will boost insurance demand as cargo, shipping,

shipbuilding, automotive insurance ... (4) Stricter legal provisions on insurance; (5) Improved investment

performance due to the recovery of stock market.

We recommend: BIC, BMI (however market movements reflected their prospect)

Combine Ratio Growth rate

36

100.0%

101.9%101.6% 101.6%

99.4%

98.0%98.5%99.0%99.5%

100.0%100.5%101.0%101.5%102.0%102.5%

2010 2011 2012 2013 2014

25.24%

20.20%

11.03%

7.04%

12.44%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2010 2011 2012 2013 2014

Combine Ratio Growth rate

SEAPORT SECTOR - POSITIVE

We recommend this sector due to the fact that:

(1) Import-export activities expected to maintain high growth thanks to the signing of free trade

agreements; (2) Infrastructure investment is being promoted; (3) Efficient port utilization can be

improved thanks to the strong participation of the private sector; (4) The seaport companies are

undervalued compared with potential growth

The seaport companies are undervalued with growth potential: the P/E ratio of 7.4 in The seaport companies are undervalued with growth potential: the P/E ratio of 7.4 in

average, significantly lower than the P/E of the market overall of 12.8. This is the P/E belongs to

firms with low growth or no growth. With current valuations, we believe that the seaport companies

are undervalued with positive growth prospects in the coming years The tickers recommended:

VSC, HAH, GMD.

37

OIL & GAS SECTOR - NEUTRAL

We expect that oil prices will continue to recover in the last 6 months, prospect of groups in

this sector continues to diverge :

• Upstream and Midstream group: although service prices decline, following the trend of oil

prices but thanks to increasing output, enterprises like PVS and PVB are expected to

maintain positive business result in last two quarters.

• Downstream group: thanks to the change of CNG input pricing policies (pegged to FO

prices), enterprises like PGS and CNG improved profit margins. Also, trading LPG of such prices), enterprises like PGS and CNG improved profit margins. Also, trading LPG of such

enterprises LPG as PGS, PVG was better than 2014.

38

Ticke

r

Rev

2014

EAT

2014

Rev

2015E

EAT

2015E

EPS

2015

P/E F

2015

P/B F

2015

Closing

price

31/12/14

Closing

price

31/03/15

Closing

price

30/06/15

Chan

ge

Target

price

PVS 31,373 1,765 28,227 1,466 3,163 8.50 1.13 26,900 22,600 26,900 0% 30,498

PVB* 1,001 147 1,058 115 5,347 7.56 1.74 44,000 33,100 40,400 -8% 46,123

PVD 20,813 2,498 18,534 2,296 7,160 7.33 1.32 64,500 44,800 52,500 -19% 62,292

PGS 7,484 191 6,519 223 2,907 7.46 0.89 26,900 19,400 21,700 -19% 24,829

CNG 1,086 112 1,153 123 4,540 6.41 1.52 32,400 31,400 29,100 -10% 32,799

STEEL SECTOR - NEUTRAL

The overview of steel sector in 2Q has been more optimistic than 1Q by the increase in

consumption and the slowdown of the decreasing velocity of steel price from March.

However, the threat from cheap imported steel still exists when free trade agreements are

officially effective

We remain the NEUTRAL perspective toward steel sector in 2015. In Quarter II, the

performance of steel companies’ stocks have recovered significantly by a slowdown in the

decrease of iron ore price and expectation about the operation result when constructional decrease of iron ore price and expectation about the operation result when constructional

season started. We recommend NKG, HSG, and HPG

39

Ticker

Rev

2014

(bil

dong)

EAT

2014

(bil

dong)

Rev

2015E

(bil

dong)

EAT

2015E

(bil

dong)

EPS

2015

P/E F

2015

P/B F

2015

Closing

price

31/12/14

Closing

price

31/3/15

Closing

price

30/06/15

ChangeTarget

price

NKG 5,835 76 7,642 117 2,717 5.12 0.96 13,400 14,700 15,000 3.73% 19,105

HSG* 14,990 410 16,500 450 4,465 9.52 1.56 47,500 33,800 42,500 -7.21% 46,879

HPG* 25,525 3,250 22,500 2,300 3,117 9.27 1.56 53,000 44,100 28,900 -16.23% 31,170

40

Thank you for your business, your trust and your confidence in us

vietnam stock market update q3.2015

Business