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Kim Nguyen
+84 8 3824 2897 ext. 2140
18 November 2016
INDUSTRIALS - VIETNAM
Key Figures
Charter cap (USD mn) 96.5
Charter cap (VND bn) 21,.711
Outstanding shares (mn) 2,177
Management ownership (%) N.A
State ownership (%) 95.4%
Foreign ownership (%) 2.93%
Company Factsheet
13A 14A 15A
Revenue (USD, mn) 452 493 585
Net profit (USD, mn) 109 123 78
Total equity (USD, mn) 808 957 915
Total assets (USD, mn) 1,641 2,045 1,990
Net debt (USD, mn) 302 403 398
ROA (%) 7.1 6.7 4
ROE (%) 14.4 14 8.5
Source: ACV
LISTING INFORMATION
ACV will list on UPCOM on 21st November, 2016 with the reference price of
VND 25,000/share. The parent company IPO-ed in December 2015 with 77.8
mn shares offered to the public, equivalent to 3.5% of total shares. Average
winning price was VND14,344/share (see our IPO report).
List of subsidiaries
Name of Subsidiaries Investment in
subsidiaries(VND bn)
%
Stake Core business
Southern Airport
Services JSC 671 51.00%
Commercial
Service in airport
Saigon Ground Service
JSC 78 55.51%
Ground service in
airport
Noi Bai Aviation Fuel
Service JSC(NAFCO) 66 60.00% Aviation Fuel
Source: ACV (as at 30 September 2016)
According to the privatization plan of the Government, ACV divested from Cam
Ranh Aviation Commercial JSC in 2015 (from 51% ownership to 10%). The
company continued to divest from the ownership of 55.5% in Saigon Ground
Service JSC (SGN: UPCOM) to 48% between 02-07th
November 2016, making
it no longer a subsidiary and may record roughly VND 150bn in income from
the divestment in 4Q16 . SGN contributed roughly 5% and 5% to ACV’s
revenue and net profit in 2015, respectively.
Mai Anh Dinh [email protected]
Airport Corporation of Vietnam (ACV: UPCOM)
PRELISTING REPORT BUY - 1Y Target Price: VND 37,700
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Ownership structure
Source: ACV( as at 31 December 2015)
In the privatization plan, ACV plans to sell a 20% stake to a strategic partner. 7% was
sold to Aeroport de Paris (AdP) at the beginning of 2016. ACV and AdP is still
negotiating on the remaining 13%. According to the updated regulation on SOE
privatization, the State ownership in ACV will reduce from 75% to 65% in the coming
time, detailed divestment plan is still not disclosed. Estimated free float is 4.6%
BUSINESS UPDATE
1. Airport expansion plan
ACV owns 22 airports in Vietnam. In 2015, overcapacity was mainly experienced at
Tan Son Nhat International Airport (TSN) with 133%, reaching 26.5 mn passengers
through terminals with designed capacity of 20 mn passengers per year, followed by
Da Nang Airport with 6.7mn passengers, reaching 112% utilization in 2015. Noi Bai
International Airport with 17.2 mn passengers achieved 69% of utilization thanks to the
new Noi Bai Terminal 2 (commenced operation from the end of 2014).
Amid overcapacity at TSN, ACV expanded the international terminal, increasing
capacity by 25% and commenced operation from November 2016. This enables the
airport to receive 25 mn passengers per year. Nevertheless, ACV expects that TSN
may achieve more than 30 mn passengers in 2016, surpassing 20% of designed
capacity. As the new Long Thanh Airport may not be ready until 2025, the Ministry of
Transportation (MoT) recently guided for a plan of expanding TSN by another 60% in
2018 and 100% in 2020 in order to ease the bottleneck. Further detailed information is
still not announced.
95.40%
0.14%
2.93% 0.34%
1.18%
Ministry of Transportation(MoT)
ACV's Trade Union
Foreign Institutions
Local Institution
Individual Investors
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In 9M16, ACV commenced operation on expansion projects of Tho Xuan Airport by 2x
to 1.2mn passengers/year (Thanh Hoa province), Cat Bi International Airport by 4.6x to
4mn passengers/year (Hai Phong City) and Cam Ranh Airport (Nha Trang city) with
total CAPEX of VND 4,433bn (including TSN and Phu Quoc International Airport).
Long Thanh International Airport project has no new development since our IPO report.
2. Company’s business plan
2016 Consolidated business plan
2016P 2015 %YoY
Net sales (VND bn) 14,860 13,173 +12.8%
PBT (VND bn) 2,388 2,277 +4.8%
PBT Margin 17% 17.3% -0.3%
PBT/Charter capital 9.44% - -
Dividend 5% - -
ACV, SAS, SGN, NAFCO, SSI Research
3. 2015 and 3Q16 business updates
Historical business performance
Source: ACV
In the past 4 years, EBITDA grew at a 33% CAGR, driven by (1) average passenger
growth of 25% per annum (2) establishment of Vietjet Air, a low cost carrier in 2012,
and (3) Noi Bai Terminal 2 commenced operation at the end of 2014, increasing both
passenger capacity and commercial area in 2015.
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
0
2,000
4,000
6,000
8,000
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12,000
14,000
2011 2012 2013 2014 2015
VN
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n
Net sales EBITDA PBT Sales growth
GPM EBITDA margin PBT growth PBT margin
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Historical passenger through terminal Historical Cargo volume
Source: ACV, Civil Aviation Authority of Vietnam(CAAV)
3Q16 business update
In 3Q16, ACV reported VND 4,060bn in net revenue (+5% QoQ) and VND 804bn in net
income (vs a loss of VND 16bn in 2Q16). The company recorded VND 267bn in FX
loss due to 1.9% appreciation of JPY against VND on JPY dominated ODA loan of
JPY72 bn (~USD 713mn as at 30 September 2016) (vs a loss of VND 1,379 bn amid
9.5% appreciation of JPY against VND in 2Q16). If excluding FX effects, 3Q16 PBT
would decline by 9.6% QoQ.
Accumulatively, for 2 quarters from 04 April 2016 to 30 September 2016, net revenue
achieved VND 7,919bn, completing 53.3% of 2016 target and PBT achieved VND
968bn, completing 40.5% of 2016 target. In total, ACV recorded a significant FX loss of
VND 1,646bn (vs a loss of VND 705bn for entire 2015). ACV only announced 2016
quarterly business results without 2015 figures; therefore, we are lack of absolute
numbers for YoY comparison. We believe that the actual YoY growth of 2016 revenue
is encouraging thanks to increasing passengers, cargo and commercial flight growth
reported in 9M16.
In 9M16, total passengers through ACV’s terminals reached 70.5mn, increasing 29.6%
YoY and completing 80% of 2016 target. 2 largest airports totaled roughly 55mn
passengers, equivalent to 78% of total passenger traffic. International passengers
reached 17.5 mn, increasing 25.2% YoY and domestic passengers recorded 43mn, up
31.5% YoY. Cargo and parcels totaled 765.7 mn tons, increasing 6.9% YoY (~ 69.4%
2016 target). Commercial flights were 417.8K flights, up 25.9% YoY (~79% of 2016
target). GPM of international business is higher than domestic one thanks to higher
charging fees of roughly 2.5x-6.4x.
0%
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Th
ou
san
d t
on
s
Freight Growth
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OUTLOOK
22% passenger capacity addition plan by 2020
According to IPO plans, ACV planned to increase total designed capacity by 22%,
receiving 90.8 mn passengers by 2020. Especially, because TSN and Noi Bai
International Airport contribute roughly 50% to ACV’s total revenue, expansion of TSN
as above mentioned and the new Terminal 2 in Noi Bai Airport Airport will enable ACV
to enjoy clear earnings growth driven not only by passenger growth but also non-
aeronautical revenue growth over the next 5 years.
Possible increases in domestic aeronautical charge from 01 January 2017
In August 2016, ACV coupled with Civil Aviation Authority of Vietnam CAAV proposed
to the MoT to increase domestic passenger charge at 7 airports including TSN, Noi Bai,
Da Nang, Cam Ranh, Phu Quoc, Vinh and Phu Bai Airport since 01 January 2017.
Specifically, domestic passenger charge may increase by 43% (from VND 70K/pax to
VND 100K/pax) and domestic landing charge may increase by 43% and equivalent to
50% of international flights. In 2015, total passengers of those 7 airports accounted for
90% of total passengers, and domestic passenger charges accounted for roughly 40%
of net revenue. According to ACV, this may be approved by the MoT as CAPEX for
international terminals and airports are similar to domestic ones yet current domestic
charging fee is lower by roughly 2.5x-6.4x compared with international ones. This will
help improve GPM of domestic segment of ACV, which enjoy higher growth rate than
the international segment.
Vietnam is ranked as the 5th
fastest growing market in terms of additional
passengers per year and the 7th fastest growing industry in percentage terms
from 2016-2035 by the International Air Transport Association (IATA). According
to the most updated forecast by IATA, forecasted passenger numbers of world aviation
is expected to reach 7.2 billion in 2035 with a 3.7% annual CAGR, roughly doubling the
3.8 bn air travelers in 2016. IATA also projects overall Vietnam aviation will continue to
grow at an annual rate of 7.3%, being the 7th fastest growing market in terms of
percentage. Also, according to the organization’s previous forecast in 2015, Vietnam’s
international freight will grow at an annual rate of 6.6% from 2015-2017.
In terms of regional air traffic growth, IATA forecasts future growth for the period from
2015-2035 specifically as follows:
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Annual CAGR growth by 2034 by region 5 largest countries in terms of additional pax per year by
2035
Source: IATA, Boeing
The surge in low-cost carriers (LCC) will strongly support efficiency and industry
growth. According to a report by the Centre for Asia Pacific Aviation (CAPA) in
Jan 2016, Vietnamese privately owned LCC Vietjet Air which was established in 2012
strongly boosted domestic air travels at a CAGR of 23% from 2013-2015. Vietjet Air
projects 50% YoY passenger growth in 2016, to 15 mn pax with loading factor of nearly
90% (being the largest domestic carrier with 40% market share, surpassing Vietnam
Airlines in 2016). Vietjet Air plans to add 12 aircrafts in 2016, reaching a fleet of 42 and
may reach 200 in 2023. As such, with aggressive expansion plan both in domestic and
international routes of Vietjet Air, it should boost air traffic growth in the coming time
amid a rising middle class in Vietnam.
Aviation industry will be strongly supported by free trade agreements between
Vietnam and partners. FTAs between Vietnam and partners (For example FTA VN-
EU, FTA Vietnam-Korea and etc…) and the adoption of the ASEAN Single Aviation
Market will also strongly support industry growth. The ASEAN Single Aviation Market
will liberalize the region’s air services, specifically among ASEAN countries, benefiting
both passengers and airlines Nevertheless, global trade tends to slower in the coming
years, ACV’s cargo and parcel may grow at a slower pace than recent years. We are
opinion of international freight may remain a CARG of 6.6% per year to 2035 in line wih
IATA forecasts.
EARNINGS ESTIMATES
As the increase in charging fee proposal is still not approved by the MoT, we
conservatively assume that ACV’s fees for aeronautical services will remain stable
moving forward. Any increases in passenger volume, air cargo volume and flight
6.60%
4.70%
2.80%
2.50%
3.80%
4.80%
5.10%
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%
Southest Asia
Asia Pacific
Norther America
Europe
Latin America
The Middle East
Africa
annual CAGR growth by 2034
5.20%
3.10%
6.70%
4.80%
7.20%
0%
1%
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7%
8%
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China UnitedState
India Indomesia Vietnam
Additional x mm pax per year by 2035 Annual % growth
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movements will boost revenue growth. 3 major airports are Tan Son Nhat, Noi Bai and
Danang International Airport, whose revenue accounts roughly 80% to total revenue,
will primarily contribute to the company’s earnings. The remaining airports will still
record losses or breakeven in the coming years due to high depreciation expenses and
low capacity utilization.
Source: ACV parent company, consolidated FS, SSI Research
In 2016, we forecast that ACV’s consolidated revenue may reach VND 17,581 bn
(+33.5% YoY). Based on fore-mentioned 9M16growth in air passenger, cargo volume
and flight movements, our assumption for 2016 are anchored on the following:
Passengers through ACV’s terminals will increase by 28% YoY, receiving 80 mil
passengers in 2016. Cargo and parcel volume will increase by 7%% YoY, reaching
1.04mn tons. Commercial flights will record 567 movements, up 26.5% YoY
We expect that ACV will book VND 4,327bn in depreciation expense in
aeronautical COGs, increasing by 20% YoY accounting for 69% of aeronautical
COGs and 37% of total COGs due to the expansion of Tan Son Nhat Airport and
other above mentioned expansion of the airports which commenced operation in
2016
GPM will stay at 35.3%, improving 8.6% pts YoY thanks to the increasing in sales
volume
As of 30 September 2016, the JPY appreciated by roughly 16% against the VND.
Hence, we think that ACV may incur exchange rate loss of VND 2,500bn in 2016,
equivalent to a 16% appreciation of JPY against VND for the entire year.
As a result, 2016 PBT may reach VND 3,106bn, increasing 36% YoY. If excluding FX
affects in both 2015 and 2016, 2016 PBT would have increase by 87% YoY. 2016 EPS
-100%
-50%
0%
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8,000
10,000
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2011 2012 2013 2014 2015 2016F
VN
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Aeronautical Non-aeronautical Retails
Others Aeronautical growth Non-aeronautical growth
Retails growth Others growth
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will achieve VND 1,059 Core EPS(excluding FX loss) may achieve VND 1,896. We
revise up 2016 EPS by ~50% compared with our previous report owing to (1)
increasing 2016 GPM to 35.3% (from 32%) as we believe that higher passenger
volume will yield higher GPM than we expected; (2) In 2016, ACV will also record VND
150 bn in provision reversion for SAS on bad debt provision in 2015 involving in Viet
House Joint Venture (see our report) (3) ACV will record VND 150bn as income from
divestment of SGN in November 2016.
In 2017, we expect ACV’s revenue will reach VND 20,031bn (+13.9% YoY) and PBT to
reach VND 4,838 bn (+56% YoY). Our upbeat revenue and PBT projections are
derived on the following assumptions:
Increases in passenger volume and cargo and parcel volume of 17.2% YoY and
7% YoY, respectively, thanks to the commencement of Tan Son Nhat Airport
International Terminal expansion in 4Q16 and expansion of other airports
commencing operation in 2016
SGN’s business results will not be consolidated into ACV’s FS since December
2016. We estimate that ACV may record roughly VND 105bn income from
associates from SGN in 2017
GPM will improve to 36.8% in 2017 thanks to: i) increasing capacity at Noi Bai
International Airport thanks to the commencement of Terminal 2, ii) an increase at
Tan Son Nhat International Airport’s capacity after its expansion in 2016.
Based on our assumption for conservative reason on JPYUSD that JPY may
continue to strengthen against USD in 2017, we assume that JPY will appreciate
by 10% against VND in 2017, implying that ACV may continue incur FX loss of
VND 1,700bn in 2017.
Accordingly, in 2017, ACV’s PBT and net income may reach VND 4,838bn (+56% YoY)
and VND 3,870bn (+56% YoY) (assuming that ACV is applied CIT of 20% in 2017),
translating to an EPS of VND 1,649. Excluding FX effects, 2017 PBT should have
increased by 16% YoY. Core EPS (excluding FX loss) may achieve VND 2,318.
From 2018-2020: we assume that international passenger will grow at 7.3% per year
and international cargo will grow at 6.6% per year in line with IATA’s forecasts. As a
result, net revenue and net profit will increase at CAGR of 10.8% and 12%, respectively
from 2018-2020.
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VALUATION AND INVESTMENT VIEW
Comparable companies
Companies Market Revenue in 2015(mn USD) P/E P/B EV/EBITDA
Belgrade Nikola Tesla Airport (AERO SG) Serbia 84 10.7 1.47 6.67
Vienna International Airport (FLU AV) Austria 802 13.85 1.66 7.1
TAV Airport Holding (TAVHL TI) Turkey 1,116 9.39 1.57 5.7
Beijing Capital International Airport Co Ltd (694 HK) China 1,334 16.27 1.53 12.8
Airport of Thailand Pcl(AOT TB) Thailand 1,385 25 4.5 16
HNA Infrastructure Company Ltd (357 HK) HongKong 166 7.6 0.93 9.27
Average
815 13.8 1.9 9.59
Median 959 12.3 1.6 8.2
Airport Corporation of Vietnam Vietnam 584 23 1.9 7.2
Source: ACV, Bloomberg
DFC Calculation
Consolidated (VND million) 2015 2016F 2017F 2018F 2019F 2020F Terminal
EBIT 2,367,292 3,210,135 4,952,540 5,679,648 6,388,688 7,132,933 11,099,158 Abnormal adjustments
0 0 0 0 0 0
Adjusted EBIT 2,367,292 3,210,135 4,952,540 5,679,648 6,388,688 7,132,933 11,099,158 Effective CIT rate (%) 23.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% EBIT(1-T) 1,822,278 2,568,108 3,962,032 4,543,718 5,110,950 5,706,346 8,879,326 Add: Depreciation 3,611,285 4,492,115 5,095,864 5,699,644 6,303,363 6,907,203 4,862,140 Less: CAPEX 1,686,087 5,800,000 5,800,000 5,800,000 5,800,000 5,800,000 5,800,000 Less: Change in WC (503,151) 763,161 (20,855) (429,559) (741,201) (901,738) (2,002,214)
Free cash flow to firm 4,250,626 497,061 3,278,751 4,872,921 6,355,514 7,715,287 9,943,680 Terminal growth 2.0%
Terminal value 94,314,395
Discount period
0.14 1.14 2.14 3.14 4.14
Discount factor
0.99 0.90 0.81 0.74 0.67
Present value
490,453 2,939,668 3,969,915 4,704,837 5,189,769
Terminal PV 63,441,568
PV of FCFF - Operating 80,736,210 Cash & cash equivalents 4,466,482
ST Investments 12,864,252
Total Firm Value 98,066,943
Debt 13,426,638 Equity Value 84,640,306
No. of shares 2,177,173,236 Value of a share (VND) 38,876
At the reference price of VND 25,000/share, ACV is being traded at 2016 and 2017 P/E
of 23x and 15x; 2016 and 2017 P/B of 2x and 1.9x, 2016 and 2017 EV/EBIDA of 7.1x
and 5.4x respectively, which are quite attractive. We believe that ACV desires a P/B of
1.9x and EV/EBITDA of 8.5x at end 2017 (a discount of 10% compared with average
international peers of 9.5x due to lower revenue size). Based on combined methods
(end 2017 target EV/EBITDA: 8.5x; end 2017 P/B: 1.9x, DCF model: WACC:
10.05%, terminal growth: 2%), end 2017 target price for ACV arrives at VND
37,700/share, or 51% higher than the reference price. We recommend BUY ACV.
We like ACV thanks to: (1) a monopoly airport manager and operator in Vietnam and
has been guaranteed investment capital by the State budget and low bearing interest
loan sources. (2) Increasing air travel and airfreight demand in the next 20 years. (3)
Experienced management team
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Risks: (1) Significant depreciation expense for expansion projects and the mega Long
Thanh International Airport project will impact ACV’s GPM and bottom line. (2) After
2018, Long Thanh International Airport will be mainly funded by ODA. Accordingly,
ACV’s debt ratio will thus significantly increase ( ACV may own 51% stakes in Long
Thanh Airport). However, interest expense will be capitalized until the project
commences operation. (3) Substantial foreign exchange loss due to heavy dependent
on Japanese ODA loans. Currency risk is difficult to forecast and measure.
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APPENDIX: HISTORICAL FINANCIAL STATEMENTS
VND Billion 2014 2015 2016F 2017F
VND Billion 2014 2015 2016F 2017F
Balance Sheet
Income Statement
+ Cash 3,897 4,466 8,261 8,452
Net Sales 10,555 13,173 17,581 20,031
+ Short-term investments 10,669 12,864 14,106 14,106
COGS -7,489 -9,656 -11,368 -12,658
+ Account receivables 3,376 3,478 5,364 6,111
Gross Profit 3,066 3,517 6,214 7,373
+ Inventories 540 712 796 886
Financial Income 2,504 960 1,222 1,177
+ Other current assets 519 295 390 443
Financial Expense -501 -811 -2,575 -1,818
Total Current Assets 19,002 21,815 28,917 29,999
Income from associates 0 0 0 0
+ LT Receivables 442 179 176 200
Selling Expense -416 -428 -615 -701
+ Net Fixed Assets 23,568 20,661 23,027 23,881
Admin Expense -1,296 -1,203 -1,319 -1,502
+ Investment properties 38 32 32 32
Income from business operation 3,358 2,055 2,926 4,633
+ LT Assets in progress 0 1,054 1,055 1,202
Net Other Income 49 223 179 204
+ LT Investments 284 642 720 720
Profit Before Tax 3,408 2,277 3,106 4,838
+ Other LT Assets 439 467 319 357
Net Income 2,634 1,753 2,485 3,870
Total Long-Term Assets 24,771 23,036 25,329 26,391
NI attributable to shareholders 2,632 1,712 2,427 3,780
Total Assets 43,772 44,852 54,246 56,390
Minority interest 2 41 58 90
+ Current Liabilities 7,540 8,151 9,373 10,310
In which: ST debt 250 308 227 253
Basic EPS (VND) 0 0 1,059 1,649
+ Non-current Liabilities 15,742 16,086 18,305 16,919
BVPS (VND) 12,081 11,601 11,816 12,965
In which: LT debt 12,268 13,119 15,347 16,881
Dividend (VND/share) 0 0 500 500
Total Liabilities 23,282 24,237 27,678 27,230
EBIT 3,474 2,367 3,210 4,953
+ Contributed capital 16,274 17,093 21,772 21,772
EBITDA 5,602 5,979 7,699 10,046
+ Share premium 0 0 0 0
+ Retained earnings 2,904 1,807 3,024 5,526
Growth
+ Other capital/fund 1,312 1,714 1,772 1,862
Sales 10.5% 24.8% 33.5% 13.9%
Shareholders' Equity 20,490 20,615 26,568 29,160
EBITDA 5.9% 6.7% 28.8% 30.5%
Total Liabilities & Equity 43,772 44,852 54,246 56,390
EBIT 8.4% -31.9% 35.6% 54.3%
NI 14.5% -33.4% 41.7% 55.8%
Cash Flow
Equity 20.0% 0.6% 28.9% 9.8%
CF from operating activities 2,691 4,213 5,176 5,519
Chartered Capital 53.4% 5.0% 27.4% 0.0%
CF from investing activities -6,656 -2,814 -7,119 -5,800
Total assets 26.3% 2.5% 20.9% 4.0%
CF from financing activities 5,336 -833 5,737 472
Net increase in cash 1,371 566 3,794 191
Valuation
Beginning cash 2,516 3,897 4,466 8,261
P/E N/A N/A 23.6 15.2
Ending cash 3,897 4,466 8,261 8,452
P/B 0.0 0.0 2.1 1.9
P/Sales N/A N/A 3.1 2.7
Liquidity Ratios
Dividend yield N/A N/A 2.0% 2.0%
Current ratio 2.52 2.68 3.09 2.91
EV/EBITDA -0.4 -0.7 6.9 5.3
Acid-test ratio 2.38 2.55 2.96 2.78
EV/Sales -0.2 -0.3 3.0 2.7
Cash ratio 1.93 2.13 2.39 2.19
Net debt / EBITDA 1.34 1.47 1.06 0.80
Profitability Ratios
Interest coverage 52.31 26.34 30.76 43.14
Gross Margin 29.0% 26.7% 35.3% 36.8%
Days of receivables 34.4 36.5 38.0 41.1
Operating Margin 24.0% 10.4% 12.7% 17.9%
Days of payables 106.0 56.5 44.0 45.0
Net Margin 25.0% 13.3% 14.1% 19.3%
Days of inventory 25.4 23.7 24.2 24.2
Selling exp./Net sales 3.9% 3.3% 3.5% 3.5%
Admin exp./Net sales 12.3% 9.1% 7.5% 7.5%
Capital Structure
ROE 14.0% 8.5% 10.5% 13.9%
Equity/Total asset 0.47 0.46 0.49 0.52
ROA 6.7% 4.0% 5.0% 7.0%
Liabilities/Total Assets 0.53 0.54 0.51 0.48
ROIC 9.1% 5.4% 6.7% 9.0%
Liabilities/Equity 1.14 1.18 1.04 0.93
Debt/Equity 0.61 0.65 0.59 0.59
ST Debt/Equity 0.01 0.01 0.01 0.01
Source: Company, SSI Research
WWW.SSI.COM.VN
SAIGON SECURITIES INC. Member of the Ho Chi Minh Stock Exchange, Regulated by the State Securities Commission
HO CHI MINH CITY 72 Nguyen Hue Street, District 1 Ho Chi Minh City Tel: (848) 3824 2897 Fax: (848) 3824 2997 Email: [email protected]
HANOI 1C Ngo Quyen Street, Ha Noi City Tel: (844) 3936 6321 Fax: (844) 3936 6311 Email: [email protected]
Page 12
1. ANALYST CERTIFICATION
The research analyst(s) on this report certifies that (1) the views expressed in this research report accurately reflect
his/her/our own personal views about the securities and/or the issuers and (2) no part of the research analyst(s)’
compensation was, is, or will be directly or indirectly related to the specific recommendation or views contained in
this research report.
2. RATING
Within 12-month horizon, SSI Research rates stocks as either BUY, HOLD or SELL determined by the stock’s
expected return relative to the market required rate of return, which is 18% (*). A BUY rating is given when the
security is expected to deliver absolute returns of 18% or greater. A SELL rating is given when the security is
expected to deliver returns below or equal to -9%, while a HOLD rating implies returns between -9% and 18%.
Besides, SSI Research also provides Short-term rating where stock price is expected to rise/reduce within three
months because of a stock catalyst or event. Short-term rating may be different from 12-month rating.
Industry Rating: We provide the analyst’ industry rating as follows:
Overweight: The analyst expects the performance of the industry over the next 6-12 months to be attractive vs.
the relevant broad market
Neutral: The analyst expects the performance of the industry over the next 6-12 months to be in line with the
relevant broad market
Underweight: The analyst expects the performance of the industry over the next 6-12 months with caution vs.
the relevant broad market.
*The market required rate of return is calculated based on 5-year Vietnam government bond yield and market risk premium derived
from using Relative Equity Market Standard Deviations method. Our rating bands are subject to changes at the time of any significant
changes in the above two constituents.
3. DISCLAIMER
The information, statements, forecasts and projections contained herein, including any expression of opinion, are
based upon sources believed to be reliable but their accuracy completeness or correctness are not guaranteed.
Expressions of opinion herein were arrived at after due and careful consideration and they were based upon the
best information then known to us, and in our opinion are fair and reasonable in the circumstances prevailing at the
time and no unpublished price sensitive information would be included in the report. Expressions of opinion
contained herein are subject to change without notice. This document is not, and should not be construed as, an
offer or the solicitation of an offer to buy or sell any securities. SSI and other companies in the SSI and/or their
officers, directors and employees may have positions and may affect transactions in securities of companies
mentioned herein and may also perform or seek to perform investment banking services for these companies.
This document is for private circulation only and is not for publication in the press or elsewhere. SSI accepts no
liability whatsoever for any direct or consequential loss arising from any use of this document or its content. The use
of any information, statements forecasts and projections contained herein shall be at the sole discretion and risk of
the user.
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HO CHI MINH CITY 72 Nguyen Hue Street, District 1 Ho Chi Minh City Tel: (848) 3824 2897 Fax: (848) 3824 2997 Email: [email protected]
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4. CONTACT INFORMATION
Institutional Research & Investment Advisory
Kim Nguyen
Analyst, Industrials
Tel: (848) 3824 2897 ext. 2140
Phuong Hoang Hung Pham Giang Nguyen, ACCA
Deputy Managing Director, Associate Director Associate Director
Head of Institutional Research & Investment Advisory [email protected] [email protected]