Morning Cafe sto.ctoxpui ISSUE: 840 13 Sept 2013 MORNING STRATEGY 600 VN-Index 600 VN30-Index 550 550 500 500 450 450 400 400 350 350 300 S-12 N-12 J-13 M-13 M-13 J-13 S-13 70 HNX-Index Price Chart 65 60 55 50 S-12 N-12 J-13 M-13 M-13 J-13 S-13 13 Sept 2013 – Lacking of supportive news, Vietnam stock market became more quiet yesterday. At the close, the VNIndex inched down 0.17% to 475.59 while the HNX-Index decreased 0.27% to 60.02. Notably, CII and HPG outperformed the broad market yesterday when one of CII’s inside shareholders announced to buy 1.5 million shares of the company and HPG confirmed a rumor about successfully collecting a bad debt of VND 264 billion. Total volume on two bourses reached 47 million shares, worth nearly VND 550 billion. Foreign investors accumulated VND 1.7 billion and 481 million worth of shares on HSX and HNX respectively, much lower than the previous figures. According to State Bank of Vietnam, having implementing Resolution No 02/NQ-CP of the government issued on Jan 07th,2013, domestic commercial banks have provided loans of VND 105.32 billion in total to 331 individuals, of which VND 69.4 billion has been disbursed. For institutional customers, there have been three enterprises committed to loans of VND 708 billion, of which VND 45 billion has been disbursed. Taking the total commitment of VND 30 trillion of the credit package into consideration, of which VND 21 trillion is for individuals and VND 9 trillion is for enterprises, lending and disbursement were rather slow, which might be partly due to hard lending criteria as well as the downturn of real-estate market. Pha Lai Thermal Power JSC (HSX: PPC) has just announced the resolution of its BOD approving the purchase of 15 million shares of Hai Phong Thermal Power JSC from EVN Finance JSC at VND 11,500 per share. Taking 5 million shares of the same company that PPC had bought from Saigon Vina Real Estate JSC into account, PPC would own 25.49% stake of Hai Phong Thermal Power JSC, the only associate company of PPC. Compared to the cash and equivalents of over VND 1,300 billion on PPC’s balance sheet on June 30th, 2013, the deal, which would cost PPC around VND 170 billion cash, is negligible and will not make any significant impact on PPC’s financial conditions. Back to the broad market, on the technical side, the 20-day moving average of the VN-Index is approaching the index itself, indicating a high probability of the VN-Index finishing its consolidation soon and resuming its current short-term downtrend. However, in bigger picture, we maintain our view that the strong support of 460-465 will hold its ground. We continue recommending traders and investors not be too active for the time being. To contact the analyst of this commentary: Mr. Hoang Huy (huyh@acbs.com.vn) Newsletter Team: Hoang Huy Website: huyh@acbs.com.vn http://www.acbs.com.vn 1|P a g e Bloomberg: ACBS <GO> MORNING CAFE Date: 13 Sept 2013 TOP STORY HPG: Brief company update Yesterday, Hoa Phat Group JSC (HSX: HPG) declared to successfully collect VND 264 billion from Ha Noi ACB Investment JSC, related to buying 20 million shares of a subsidiary, Hoa Phat Steel JSC. This has given a positive effect on HPG’s market prices recently. Last price (Sep 12 2013) Average volume in 30 days Average volume in 100 days H1/2013 VND 33,100/share 423,881 shares Charted capital (VND Billion) Sales volume of construction 561,976 shares steel (VND Billion) Revenue (VND Billion) EAT (VND Billion) Sources: HSX, HPG, Bloomberg, ACBS Research Center (2013) % fulfilled targets 4,191 - 322,600 - 8,410 1,012 45.5% 84.4% After collecting VND 264 billion worth of account receivables above, the company will be able to reverse VND 164 billion provision in Q3, which will push Hoa Phat’s profit adequately. As a result, in this update, we reduce the company’s administrative expenses in our 2013 forecast from VND 554 billion to just VND 290 billion. Meanwhile, we believe that Hoa Phat is able to garner a revenue of around VND3,500- 4,000 billion during Q3. Outperform the industry While total sales volume of VSA’s members advanced 3% y.o.y in 8M2013, Hoa Phat was continuously outperforming the industry, attaining a real growth rate of 7.45% y.o.y to 431,600 tons during the period and holding about 14.3% market share. Consumption of steel pipe remains stable around 12,000-13,000 tons per month, occupying 15.1% market share. 80,000 Tons HPG's monthly sales volume of steel in 2011 - 2012 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Jan Feb Mar Apr May 2013 Jun Jul Aug Sep Oct Nov Dec 2012 Source: HPG, ACBS Research Center (2013) Launching Phase II - Hoa Phat Steel Complex The Phase II of Coke and Thermal factory were fully operated since late August, lifting the company’s annual capacity to 700,000 tons coke and 37 MW. With this, Hoa Phat can meet its total demand of coke and about 40% of electricity demand for the whole Complex in the future. Currently, the company is rushing to bring the Phase II - Hoa Phat Steel Complex into operation in Q4 as schedule. Given that, Hoa Phat will attain annual capacity of 1.15 million tons billet and 1.15 million tons construction steel, including two blast furnaces with total capacity of 900,000 tons/ year. Newsletter Team: Hoang Huy Website: huyh@acbs.com.vn http://www.acbs.com.vn 2|P a g e Bloomberg: ACBS <GO> MORNING CAFE Date: 13 Sept 2013 Thanks to that, Hoa Phat may achieve a real growth of 11% in terms of construction steel and 15% in terms of steel pipe in 2013. The steel business is expected to stabilize around VND 13,000 billion in 2013FY. Revenues from most of the other businesses are expected to grow around 3-7% while that related to exporting coke decreased by 40% due to the plunge of prices. The operation of the Phase II Hoa Phat Complex may create higher depreciation cost and interest expenses in Q4/2013. Nevertheless, this is expected to promote the company’s steel gross margin, and product quality in longterm. With a large operation scale and its vertical investment into the construction steel value chain, Hoa Phat has a great competitive advantage as compared to other domestic steel producers. Mandarin project Mandarin has still received customer interests thanks to Hoa Phat’s good reputation for its rapid construction progress and timely delivery of 257 Giai Phong projects. The company has sold about 700 of 1,000 Mandarin’s apartments and collected about VND 2,185 billion from customers (as of the end of June 2013). As such, we believe that Hoa Phat is able to gain a revenue of about VND 2,500 billion from the project in 2013. Valuation Given the recovery of steel business and sales of Mandarin project, Hoa Phat may fulfill 99% its revenue target (VND 18,400 billion) and 164% its EAT target (VND 1,967 billion) in 2013. In terms of valuation, using DCF method and Multiples method gives the fair price at VND 37,054 per share; up VND 553 per share against our previous update (July 2013). Given the HPG current market price, we preserve our Buy recommendation on the stock. Technical view: bearish signals from indicators HPG has just breached its medium-term high of 32,100 and is aiming to its all-time one of 37,600. However, taking HPG’s more-than-2-fold rally in the past year and RSI(14)’s bearish divergence into consideration, we do not expect HPG to keep rising much further. A drop back below the just-broken resistance of 32,000, if any, will signal a significant reversal. *Note: HPG’s prices are adjusted according to dividend, stock split, etc. To contact the analyst of this commentary: Ms. Tran Thi Hai Yen (yen.tran@acbs.com.vn) Newsletter Team: Hoang Huy Website: huyh@acbs.com.vn http://www.acbs.com.vn 3|P a g e Bloomberg: ACBS <GO> MORNING CAFE Date: 13 Sept 2013 LOCAL NEWS Vietnam’s aviation likely to rise 12-15% this year Vietnam’s aviation is expected to growth from 12% to 15% this year in term of passenger transport, Vnexpress.net reported, citing information of the Civil Aviation Authority of Vietnam. If the forecast comes true, this year’s increase will be really impressed versus last year’s figure of 6.8% growth, Luu Thanh Binh- Deputy Head of the Civil Aviation Authority said, commenting that amid aviation industry in the world has been facing a number of difficulties, airlines in Asia in general and in Vietnam in particular still posted optimistic growth and there are positive signals that Vietnam’s airlines will have strong recovery. It is expected that Vietnam’s aviation to grow by 12-15% this year and the growth will maintain at 2 digit figures in 2014 and 2015. In 2013, Vietnam’s airlines are expected to serve total of 29 million passengers. The market is very potential with population of more than 80 million. Currently Vietnam has 4 airlines, including the Flag courier Vietnam Airlines, Jetstar Pacific, Vietjet Air and Vasco. In which, Vietnam airlines serves both as passenger delivery and political duty. Vietjet Air is a private and low cost aviation. Vietjet Air is a young aviation in Vietnam but it has begun to demonstrate compliance with the conditions of Vietnamese, having diversified serving policies with many options for passengers. Source: StoxPlus BIDV delays fixing time for international bond issuance The Bank for Investment and Development of Viet Nam (BIDV) has not set a specific time for issuing international bonds, said the bank's spokesperson, Quach Hung Hiep. The statement follows approval given by the State Bank of Viet Nam (SBV) last Wednesday for BIDV to issue up to US$500 million worth of international bonds this year. "We've intended to issue these bonds for a long time and the confirmation from SBV is a positive step for BIDV to capitalise on opportunities. This doesn't mean we have fixed a time for the issuance," said Hiep. BIDV planned to issue international bonds from 2011. Source: VNS Vietnam Treasury sells VND180Bln G-Bond sale on Sept 11; yields up The State Treasury of Vietnam only sold VND180 billion worth of government bonds in an auction on Sept 11 at the yields of 8.3-9.1% per annum, according to the Hanoi Stock Exchange (HNX). In the auction, the State Treasury planned to sell VND2 trillion worth of government bonds, distributed equally for 2-y, 3-y, 5-y and 10-y maturities. The bid-to-cover ratios were 1.86 and 0.16, respectively for 3- and 5-y tenors. In details, there were 4 bidders registering for VND930 billion 3-y bonds, seeking for yields of 8.3-9.5% while only 2 investors bid for VND80 billion 5y notes, asking for yield of 9.1%. Of the total, the State Treasury sold VND100 billion 3-y bonds at fixing of 8.3%, up 0.6% from the earlier auction on Aug 29. It also mobilized another VND80 billion from 5-y bond sale at 9.1%, up 0.6% from the previous auction on Sept 5. No 2-y and 10-y debts were sold in the auction. The sales help to raise total funds mobilized from bonds by the State Treasury via the Hanoi exchange to VND102,793.57 billion year to date. Source: StoxPlus Newsletter Team: Hoang Huy Website: huyh@acbs.com.vn http://www.acbs.com.vn 4|P a g e Bloomberg: ACBS <GO> MORNING CAFE TODAY’S EVENTS Ticker GDT HTL SSC Date: 13 Sept 2013 Event The ex-rights date of 1st dividend payment of VND 1,000/share for 2013 The ex-rights date of dividend payment of VND 500/share for 2013 The ex-rights date of 2nd dividend payment of VND 1,000/share for 2012 UPCOMING EVENTS Ticker HDG HPB CIC TAS S55 VNN CII D2D DAE HAG KBC SFN TH1 TNA VNL FIT ITQ PSD VHL XMC HHS KSA SJE Ex-rights Date 09/16/2013 09/16/2013 09/18/2013 09/18/2013 09/18/2013 09/18/2013 09/18/2013 09/18/2013 09/18/2013 09/18/2013 09/18/2013 09/19/2013 09/19/2013 09/19/2013 09/19/2013 09/19/2013 09/20/2013 09/20/2013 09/26/2013 Execution Date 09/16/2013 09/16/2013 09/23/2013 09/23/2013 09/30/2013 09/25/2013 10/30/2013 10/04/2013 10/09/2013 09/26/2013 10/09/2013 10/31/2013 10/15/2013 10/04/2013 10/26/2013 10/10/2013 10/11/2013 10/11/2013 10/30/2013 Event Listing of 5,062,477 additional shares Delisting of 3,880,000 shares Delisting of 4,635,062 shares Delisting of 13,900,000 shares Dividend payment of VND 2,000/share for 2012 Collecting shareholders' opinions in documents 2nd Dividend payment of VND 400/share for 2012 1st Dividend payment of VND 1,000/share for 2013 1st Dividend payment of VND 900/share for 2013 Collecting shareholders' opinions in documents Collecting shareholders' opinions in documents Dividend payment of VND 900/share for 2012-2013 Dividend payment of VND 600/share for 2012 1st Dividend payment of VND 1,000/share for 2013 1st Dividend payment of VND 700/share for 2013 Stock dividend payment of 5% for 2012 Annual Shareholder Meeting 2013 Annual Shareholder Meeting 2013 1st Dividend payment of VND 1,000/share for 2013 Extraordinary Shareholder Meeting Extraordinary Shareholder Meeting 1 for 1.2 rights issue at 10,000 VND/share Dividend payment of VND 1,500/share for 2012 FUTURE TRADES Ticker EID BGM CII VFMVF1 BGM FPT HAI HVG SZL VRC SGD TPH Start date 09/12/2013 09/13/2013 09/13/2013 09/13/2013 09/16/2013 09/16/2013 09/16/2013 09/16/2013 09/16/2013 09/16/2013 09/19/2013 09/19/2013 Newsletter Team: End date 10/11/2013 10/11/2013 10/11/2013 10/12/2013 10/16/2013 10/15/2013 10/15/2013 10/15/2013 10/15/2013 10/15/2013 09/30/2013 10/08/2013 Hoang Huy Website: Conducting Entity Affiliated shareholder Inside shareholder Inside shareholder Affiliated shareholder Inside shareholder Inside shareholder Affiliated shareholder Inside shareholder Affiliated shareholder Affiliated shareholder Treasury Treasury huyh@acbs.com.vn http://www.acbs.com.vn Buy volume 500,000 1,500,000 200,000 200,000 100,000 201,598 Sell volume 100,000 675,000 1,157,117 8,693,880 1,065,600 500,000 - 5|P a g e Bloomberg: ACBS <GO> MORNING CAFE CURRENT TRADES Date: 13 Sept 2013 Ticker APG ASM BMP BRC COM DHC DNC Start date 08/22/2013 09/10/2013 08/31/2013 08/23/2013 08/28/2013 08/29/2013 08/22/2013 End date 09/20/2013 10/09/2013 09/29/2013 09/21/2013 09/26/2013 09/27/2013 09/17/2013 Conducting Entity Inside shareholder Affiliated shareholder Affiliated shareholder Affiliated shareholder Affiliated shareholder Inside shareholder Affiliated shareholder DPR 09/09/2013 10/08/2013 Treasury DQC DTL EIB HDO HPG HVX ITD KDH KHA KSD L18 MAFPF1 MHC NIS NIS NTP NVB PAN POM PV2 SCR SEC SFI STB TTF TTF TTF TTF VNM VRC 09/06/2013 09/11/2013 08/28/2013 08/28/2013 08/23/2013 09/10/2013 09/03/2013 08/14/2013 09/04/2013 08/26/2013 08/20/2013 09/09/2013 09/06/2013 09/04/2013 09/05/2013 08/27/2013 09/11/2013 08/13/2013 08/21/2013 09/10/2013 08/20/2013 08/14/2013 09/05/2013 08/28/2013 08/30/2013 08/30/2013 09/05/2013 09/05/2013 09/05/2013 08/26/2013 10/05/2013 10/10/2013 09/26/2013 09/26/2013 09/20/2013 10/10/2013 10/02/2013 09/12/2013 10/03/2013 09/24/2013 09/18/2013 10/08/2013 10/04/2013 10/03/2013 10/04/2013 09/25/2013 10/09/2013 09/11/2013 09/19/2013 10/09/2013 09/18/2013 09/12/2013 10/04/2013 09/26/2013 09/28/2013 09/28/2013 10/04/2013 10/04/2013 10/04/2013 09/24/2013 Affiliated shareholder Inside shareholder Affiliated shareholder Inside shareholder Affiliated shareholder Inside shareholder Affiliated shareholder Treasury Affiliated shareholder Inside shareholder Affiliated shareholder Affiliated shareholder Inside shareholder Affiliated shareholder Inside shareholder Affiliated shareholder Major shareholder Affiliated shareholder Affiliated shareholder Inside shareholder Affiliated shareholder Affiliated shareholder Affiliated shareholder Inside shareholder Inside shareholder Inside shareholder Inside shareholder Inside shareholder Affiliated shareholder Affiliated shareholder Newsletter Team: Hoang Huy Website: huyh@acbs.com.vn http://www.acbs.com.vn Buy volume 2,000,000 2,000,000 119,360 200,000 141,000 200,000 1,000,000 350,000 1,000,000 600,000 500,000 107,000 200,000 2,400,000 500,000 500,000 500,000 210,000 1,000,000 100,000 6,062,772 1,900,000 500,000 500,000 180,000 400,000 1,000,000 300,000 Sell volume 264,960 800,000 1,000,000 400,200 448,560 180,000 16,000,000 337,000 100,000 886,544 237,627 - 6|P a g e Bloomberg: ACBS <GO> MORNING CAFE Date: 13 Sept 2013 Analyst certification The analysts named on the previous pages of this report, who are primarily responsible for the preparation of this report, certify that the opinion(s) in the report and any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or view(s) contained in this report. Report Distribution This report is restricted to and intended only for the clients of ACBS in Vietnam. If a client receives and/or uses this report outside Vietnam, it is the client’s sole responsibility to ensure that it is legally permitted in the client’s jurisdiction. Otherwise, the client should disregard this report in its entirety and let ACBS know that the client no longer wishes to receive such reports. Disclaimer This report is published solely for information purposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. The information in this report is obtained from sources believed by ACBS to be reliable. However ACBS makes no representation or warranty, either expressed or implied, as to their accuracy or completeness. THE REPORT IS SUBJECT TO CHANGE WITHOUT PRIOR NOTICE. The client shall be liable for any risk or loss (if any) as if the client makes the investment decision based on this report. ACBS accepts no liability and will not be liable for any loss or damage arising directly or indirectly from the client’s use of this report, including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy in its contents. Some parts of the report reflect the assumptions, views and analytical methods of the analysts who prepared them, and ACBS is not responsible for any error of their works and assumptions. ACBS may have issued, and may in the future, issue other reports that are inconsistent with and reach different conclusions from the information presented in this report. © Copyright. ACB Securities Company Limited 2013, ALL RIGHTS RESERVED. No part of this report may be reproduced or transmitted, in any form or by any means, electronically, mechanical, photocopying, recording, or otherwise, without the prior written permission of ACB Securities Company Limited. Newsletter Team: Hoang Huy Website: huyh@acbs.com.vn http://www.acbs.com.vn 7|P a g e Bloomberg: ACBS <GO>