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PVT – Positive 1H21 performance as expected – Earnings Update

Company Note 02/08/2021    147

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  • 2Q21 revenue and net profit slightly rose 2.4% yoy to VND1,873bn and 4.4% yoy to VND213bn, respectively.
  • PVT posted a 35.5% yoy growth in 1H21 net profit to VND354bn, in line with our expectations at 46.5% of our full-year forecasts.
  • PVT continued its expansion fleet plan with a recent purchase of VLGC.

Market Price

Target Price

Dividend Yield

Rating

Sector

VND18,500

N/A

2.85%

N/A

INDUSTRIALS

2Q21 GPM improved on the recovery of core businesses

  • PVT reported a 2.4% yoy increase in 2Q21 revenue to VND1,873bn thanks to the sharp increase of trading&services (+16.0% yoy) while transportation remained stable (+1.8% yoy) and FSO/FPSO decreased by 11.4% yoy.
  • Transportation gross profit margin (GPM) expanded 6.8% pts on the back of: (1) the recovery of charter rate in 2Q21, and (2) no cost incurring to share the Covid-19 burden with domestic customers like 2Q20. This leads to the 5.2% pts amelioration in 2Q21 blended GPM.
  • Net financial income dropped 66% yoy to VND24.8bn in 2Q21 as lower interest income (-43% yoy to VND32.5bn) and higher interest expenses (+86% yoy to VND20.7bn).
  • 2Q21 pretax profit grew 11.5% yoy, but net profit only rose 4.4% yoy to VND213bn due to a 27% yoy/33% yoy surge in tax expense and minority interest, respectively.

1H21 results: in line with our expectation

  • 1H21 net profit increased by 35.5% yoy to VND354bn on the back of the charter rate recovery, earnings contribution from newly acquired tankers and other income from vessel liquidation in 1Q21. This positive bottom line is in line with our expectations, fulfilling 46.5% of our FY21F forecasts.
  • Notably, PVT has aggressively expanded its fleet in 1H21 with a disbursement of over VND1,400bn to acquire four new vessels, compared to the minimal capex of VND6.3bn in 1H20.

New vessels – new growth engines
Besides acquiring two new clean tankers in 1Q21 and a dry bulk vessel in May, PVT continues announcing a purchase of very large gas carrier – VLGC (NV Aquamarine – 81,605 cbm) with the est. capex of US$40m on 1 Jul. After purchasing, this vessel has been contracted to transport LPG in the international voyages for 2 years, promising to contribute significantly to PVT’s performance in coming times. Hence, we maintain our positive view on PVT outlook with a net profit CAGR forecast of 10.2% in FY21-23F. We note that PVT has a capex plan of over VND7,400bn to rejuvenating its fleet in coming times, particularly included the purchase of a very large crude carrier (VLCC) and a VLGC.

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