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Vietnam Daily Market Recap Dec 14 – Navigating Vietnam 2021 & KDH

Daily Market Recap 14/12/2020    326


Dear Valued Clients,

We would like to send you our Daily Market Recap for today.

Market Commentary: The VN-INDEX continued its streak gain by rising 18.1pts

The VN-INDEX jumped 1.7% – the strongest gain in nearly one month as investors sought to buy Real Estates and Financials’ large caps. After the opening bell, the VN-INDEX started in a positive sentiment across all segments and stayed in the green territory for the whole session. The largest supports came from Real Estates sector with VIC (+2.0%), VHM (+2.4%), and VRE (+4.9%), together contributing 4.5 pts to the index’s move. Market pillars from Financials and other sectors also join the rally including VCB (+2.8%), GVR (+6.9%) BID (+1.5%), VJC (+3.9%) CTG (+1.9%), and TCB (+2.1%). On the contrary, top laggards today included SAB (-0.3%), VIB (-0.8%), DGC (-1.9%), HRC (-6.7%), and NLG (-0.9%). At the end of the session, the VN-INDEX rose 1.7% to close at its intraday high of 1,064.1pts, and the HNX-INDEX also surged 2.1% to land at 165.7pts.

All sectors rose today, led by Energy (+2.7%), Real Estate (+2.1%), and Industrials (+2.0%). Top index movers included VCB (+2.8%), VIC (+2.0%), VHM (+2.4%), GVR (+6.9%), and VRE (+4.9%). Top index laggards consisted of SAB (-0.3%), VIB (-0.8%), DGC (-1.9%), HRC (-6.7%), and NLG (-0.9%). Top three major put-through transactions were TMS with 16.9m shares (VND563.9bn), TCB with 10.7m shares (VND273.9bn), and VJC with 1.5m shares (VND188.5bn).

Foreigners net sold on HOSE to the amount of VND643.2bn, while net bought on HNX to the amount of VND0.1bn. They mainly bought FUEVFVND (VND210.5bn), CTG (VND158.4bn), and VNM (VND98.2bn); and mainly sold TMS (VND560.8bn), GMD (VND153.9bn), and VRE (VND139.5bn).

Market News

Oil advances above US$47 after tanker explosion near Saudi port
Oil climbed past US$47/barrel after another tanker explosion in the Middle East raised concerns over the region’s stability and as the first Covid-19 vaccine was poised to be distributed across the U.S. Futures rose 1.4% in New York after losing 0.5% on Friday. A ship was hit by an explosion at the Saudi Arabian port of Jeddah, with no casualties reported. It comes three weeks after an oil tanker was damaged in a possible attack at the Saudi terminal of Shuqaiq, highlighting the potential for supply to be disrupted. First deliveries of the Pfizer Inc.-BioNTech SE vaccine will be made Monday after the drug gained emergency authorization last week, with President Donald Trump and other top officials being offered the shot as part of a plan to ensure continuity of government. (Bloomberg)

Renewable energy to become a trend in Vietnam
According to experts, the dominant energy technology in the future will be energy storage devices, solar panels, clean hydrogen and wind energy. The advantages of these energy sources are being clean, available in nature, not causing pollution and not running out. The development of renewable energy such as wind, solar power, and hydrogen will be an inevitable trend to create a clean, low-cost, stable and environment friendly source of energy, said Tran Anh Tuan, Secretary of the World Energy Council. It takes hundreds of millions of years to obtain fossil fuels such as coal, oil, gas to form so they are considered to be non-renewable energy. With the development of science and technology, more and more alternative energy sources have been found. According to a newly-released survey in 100 countries about energy usage and energy technology trends conducted by the World Energy Council, small capacity vehicles such as taxis, passenger cars, pickup trucks will be powered by electricity by 2040. Vehicles that have high capacity such as heavy trucks, buses, trains, ships, planes will use hydrogen fuel. Secretary Tran Anh Tuan said an effective energy solution had been selected by more than 100 countries and became the solution having the biggest impact on energy usage by 2040. That solution will save power in production and living as well as renovate technology in manufacturing to save electricity. The dominant energy technology in the future will be energy storage devices, solar panels, clean hydrogen and wind energy. The advantages of these energy sources are being clean, available in nature, not causing pollution and not running out. Hydrogen, for example, is a source of energy for the future because it has large reserves, does not generate emissions and can be stored in many forms such as gas or liquid. It can be also transported in long distances and easily converted to other forms of energy. Hydrogen production technology from water electrolysis has been commercialised and applied in many places. Dinh The Phuc, director of the Department of Energy under the Committee for Management of State Capital at Enterprises, said there needed to be mechanisms to encourage the development of renewable energy to ensure transparency and balance between socio-economic and environmental benefits. It would be necessary to develop financial support mechanisms such as loans with preferential interest rates, tax incentives to promote green and clean energy development. (

Coverage Universes Updates

Khang Dien House T&I JSC (KDH) – Update – HOLD (+4.6%)

Potential growth largely priced in

Strong 9M20 net profit growth, thanks to huge delivery
KDH’s 3Q20 net revenue surged 187.8% yoy, bringing 9M20 net revenue to VND3,292bn (+76.8% yoy), forming 93.4% of our FY20F forecast, driven by the delivery of 96 units from Verosa and 821 units from Safira. KDH’s 9M20 blended gross profit margin (GPM) narrowed 9.9% pts yoy to 39.4% due to low-margin Safira condo properties. 9M20 net profit increased by 50.8% yoy to VND770bn, coming in at 65.1% of our forecast and 69.9% of the company’s FY20F target.

We project strong presales in FY20-21F
As of 30 Sept 20, KDH’s three key projects recorded high take-up rates (Safira 100%, equivalent to 1,593 units sold; Verosa Park 90%, equivalent to 265 units sold; Lovera Park, 86% equivalent to 1,129 units sold), thanks to bulk sales in FY19. We expect the rest of Lovera Vista and Verosa Park units to be sold in 4Q20F, bringing FY20F presales to VND3,737bn (-21% yoy). We expect FY21F presales to remain strong on the launch of two potential projects in eastern HCMC (Armena and Clarita) in 4Q20-FY21F.

Solid FY20-21F earnings backed by strong presales in FY19-21F
We project FY20F revenue to rise 23.9% yoy to VND3,526bn, driven by more than 800 units delivered from Safira in 2H20F. We expect KDH to report net profit of VND1,183bn in FY20F (+29.2% yoy), implying core EPS growth of 24.6% yoy. We believe KDH’s earnings will retain its strength in FY21F, thanks to the delivery of c.VND2,451bn from Lovera Vista in 3Q21F.

Downgrade from Add to Hold with unchanged TP of VND29,100
KDH’s stock price has rallied 18.1% since Oct 19 and is now trading close to our target price. Given the limited upside of 3.9%, we downgrade our rating from Add to Hold. Our RNAV-based target price is unchanged at VND29,100. Upside risks in the short term could come from higher-than-expected ASPs for the Armena project in District 9 and the Clarita project in District 2; our mid- to long-term investment thesis includes a sooner-than-expected launch of the Tan Tao project. Potential downside risks to our call include: 1) a new wave of Covid-19 infections, which may restrict sales and marketing activities; and 2) delays in obtaining building permits, which could delay new launches.

Read the full report: HERE

Navigating Vietnam 2021

Envisaging a new high

Moving into 2021 with confidence
Successfully containing the Covid-19 outbreak has helped Vietnam to dodge an economic recession with a positive GDP growth in 2020. We expect the economy to grow 7.1% yoy in 2021F, underpinned by 8.8% yoy expansion in manufacturing and 7.1% yoy growth in service. We expect export to accelerate 12% yoy in FY21F, driven by the meaningful recovery of global demand post vaccine discovery. The Vietnam dong is likely to strengthen, facilitated by a trade surplus and strong FX reserve. We see no downward pressure on inflation amid the oil price hike as foodstuff price is cooling down.

Earnings growth is on the mend
As Covid-19 casted shadow over all aspects of our economy, aggregate earnings of VN-Index dipped 9.5% yoy in 9M20. However, 3Q20 aggregate earnings edged down 5.9%, much better than the sharp declines seen in 6M20. With macro momentum rebounding and 3Q20 earnings performing a V-shaped recovery, we estimate listed corporate earnings across the VN-Index will grow 23% yoy in FY21F.

We identify four investment themes beyond pandemic
First, growing domestic consumption alongside consumer confidence bounce-back will propel the retail and food & beverages sectors to recover faster than others. Second, robust state investment expansion, mainly in infrastructure, could buoy construction materials and aviation infra developers. Third, country manufacturing sectors are broad plays given the gradual recovery of global demand, led by the rebound of China economy. Last, benign interest rates will bode well for banks and residential property developers.

The time to act is now
We expect VN-Index to reach 1,180 pts within 2021, based on 15.9x FY21F P/E and 23% yoy aggregate earnings growth. Our top stock picks are VHM, MWG, HPG, VPB, TCB, SCS, ACV and FPT. Downside risks to the market include the uncertainty of Covid-19 outbreak and slower-than-expected recovery of listed companies’ FY21F earnings. Market catalysts include sooner-than-expected mass availability of Covid-19 vaccines and earlier-than-expected MSCI EM upgrade of Vietnam.

Read the full report: HERE

Notable Corporate Events

Dong Hai JSC of Bentre (DHC VN, HOSE) – Dividend payment: DHC has set 31 Dec to be the record date for paying the 2020 cash dividend of VND2,000/share. The payment will be made on 29 Jan 2021. (

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