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Vietnam – Daily Market Recap Oct 23 – PNJ

Daily Market Recap 23/10/2020    503


Dear Valued Clients,

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

Market Commentary: VN-INDEX reached the highest level since January after another booming trading day

The VN-INDEX closed up 1.2% at 961.3pts, led by large caps from the Real Estate and Consumer Discretionary sectors. The VN-INDEX kicked off the morning session in the green territory, following the upward momentum in the previous session. Notably, VIC became today’s top mover, rose 3.9% to VND104,000, contributing 3.7pts to the index’s movement. Other large caps from the Real Estate and Consumer Discretionary also joined the rally, including VNM (+3.1%), VHM (+2.6%), MSN (+1.2%), and SAB (+0.4%). On the other hand, the Financials blue chips became today’s laggards, including CTG (-0.6%), BID (-0.3%), and TPB (-2.2%). As major market pillars rose, the VN-INDEX ended the session at its intraday high of 961.26pts, and the HNX-INDEX also rose 0.6% to 141.7pts.

Materials (+2.8%), Real Estate (+2.4%), and Consumer Staples (+1.7%) rose, while Utilities (-0.1%) and IT (-0.1%) lost ground today. Top index movers included VIC (+3.9%), VHM (+2.6%), VNM (+3.1%), HPG (+4.4%), and VCB (+1.0%). Top index laggards consisted of CTG (-0.6%), BID (-0.4%), TPB (-2.2%), GAS (-0.3%), and SBT (-0.6%). Top three major put-through transactions were VIC with 4.9m shares (VND482.2bn), STB with 21.5m shares (VND313.7bn), and SSI with 6.9m shares (VND124.3bn).

Foreigners net sold on HOSE to the amount of VND252.3bn, and also net sold on HNX to the amount of VND2.2bn. They mainly bought STB (VND315.1bn), VIC (VND178.9bn), and HPG (VND169.1bn); and mainly sold STB (VND314.6bn), VHM (VND162.7bn), and SSI (VND143.0bn).

Market News

Oil edges up with strong manufacturing data countering virus concern

Oil rose as strong European manufacturing data helped offset concerns as a second coronavirus wave spread across the continent. Crude futures traded up 0.4% in New York, but headed for a weekly decline. Curfews in Europe widened amid virus outbreaks. Yet European factory figures beat expectations, showing industrial activity is holding up well despite restrictions on the movement of people. The dollar also slumped, boosting oil.

With futures stuck below US$41 a barrel, attention is turning to the next major events on the horizon: the imminent U.S. election and an OPEC+ meeting at the end of next month. On Thursday, Russia indicated for the first time that it’s open to delaying an oil-output hike planned for January. Meanwhile, American presidential candidate Joe Biden said fossil fuels need phasing out over time, a comment seized on by Donald Trump as a dangerous threat to the industry. (Bloomberg)

Vietnam needs a credible local rating agency for the corporate bond market

The report which evaluated the attractiveness of the Vietnam bond market pointed out that the Vietnamese corporate bond market grew rapidly since 2019 and issues of US$12.8bn in 2019 were larger than those for Indonesia and the Philippines. Private placements accounted for 94% of corporate bond issuance in 2018 and 2019 following the easing of disclosure requirements and issuance conditions. “However, the lack of a credit culture poses significant risks to the bond market and the financial sector, particularly as individual investors currently own almost a fourth of all bond issues,” the report said.

The report pointed out that the lack of demand for credit ratings in the past had been the limiting factor for domestic crediting rating agencies in Vietnam. Two domestic rating agencies have been licensed by the Ministry of Finance, Phattinh Rating in 2017 and FiinGroup in March 2020. Both are yet to become operational. The recently approved 2019 Securities Law requires some public bond issues (but not private placements) to be rated by a domestic rating agency from January 2021. (

Coverage Universe Update

Phu Nhuan Jewelry JSC (PNJ) – Update – ADD (+17.8%)

3Q20 results: recovery underway

  • In Sep 20, PNJ reported VND1,239bn (-1.5% yoy) in revenue and VND94bn (-0.4% yoy, +80.1% mom) in net profit, signaling a strong rebound from the performance of Aug 20 (-11.5% yoy in NP). These 3Q20 results were positive amid the impacts of the second Covid-19 outbreak in Vietnam, in our view.
  • 3Q20 revenue stayed flat at VND3,962bn (-0.1% yoy) thanks to the 19.1% yoy/9.5% yoy respective revenue growth of gold bar and retail sale segments, offseting the 40% yoy drop of wholesale channel.
  • 3Q20 gross margin contracted 5% pts yoy due to higher contribution of gold bar sales at 28.7% of total revenue (+4.6% pts yoy).
  • 3Q20 financial expenses increased 37% yoy on increasing short-term debts since 2H19 to support PNJ’s expansion and inventory stocking.
  • Altogether, 3Q20 NP slightly fell 2.8% yoy to VND202bn. For 9M20, net profit sank 20.3% yoy to VND642bn, making up 66% of our forecast.

Unveil the new concept – STYLE by PNJ

On 18 Oct 20, PNJ launched a new concept – STYLE by PNJ – which targets to offer young generation a wide range of products (gold, silver jewelry, watches,…) at reasonable prices. We believe the new concept is attractive as it leverages on customers’ jewelry experience with new and modern spaces in the STYLE by PNJ areas and customer-oriented products based on their personality to create their lifestyle. Thereby, this new concept can support the sales of PNJ’s stores, especially PNJ silver stores. PNJ plans to re-design its silver stores (38 stores, or 11% of total stores at end-9M20) with this new concept.

Hope on the upcoming wedding season (4Q20-1Q21)

According to PNJ, its revenue in Vietnamese women’s day (20 Oct 2020) increased 50% yoy thanks to big sales promotion program, better brand awareness after mass media advertising in 9M20. The peak seasons of PNJ’s sales are usually winter and spring, combined with the pent-up effects after many weddings have been delayed due to the social distancing in two waves of Covid-19 (in Apr 20 and Jul-Aug 20), thus PNJ expects a stellar performance in 4Q20. We expect VND340bn for 4Q20 net profit (-12% yoy), making up the remaining 34.3% of our full-year forecast.

Reiterate ADD with unchanged TP of VND78,800

Potential re-rating catalysts include 1) a faster-than-expected store opening speed, 2) better-than-expected demand recovery after the pandemic, and 3) the launch of new products which is expected to boost sales. Downside risk to our call is the next wave of COVID-19 outbreak in Vietnam which could lead to another social distancing period.

Read the full report: HERE

Notable Corporate Events

Licogi 16 JSC (LCG VN, HOSE) – Business results: LCG’s 9M20 revenue rose to VND2,273bn, with after-tax profit climbed 18% yoy to VND181bn, completing 86% of FY20F profit plan. (

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