OUTLOOK 2022 - VCBS

By Research Department

Dec 2021

OUTLOOK 2022

MACROECONOMY

FIXED INCOME MARKET

EQUITY MARKET

INDUSTRY AND STOCK PICKS

MACROECONOMY EQUITY MARKET INDUSTRY & STOCK PICKS FIXED INCOME

3

Source: IMF, WB, Bloomberg, VCBS Research

Economic prospects have diverged further across countries with the

advantage of developed economies having strong policy support

measures.

New variants show up, which prevent lives from returning to post-

pandemic period. However, the impact on the economy will diminish

compared to the previous waves.

Demands shift for “work from home” related products.

Gaining momentum for commodity prices is weak. Even there is a

probability that commodities price may decrease compared to the

average level recorded in 2021.

Inflation gradually cooled down as transitory shortages are resolved.

=> In general, still Vietnamese economy shall benefit from the recovery of

the world economy, plus the supportive policies going on the right track.

Phenomena and assumption post-pandemic period. Outlook: Economic prospects have diverged further across countries and

appeared to extend through 2022.

Central Banks aim to put an end to pandemic’s easy money era.

However, there will be a break before an interest rate hike.

regarding the speed of this procedure, Fed is likely to take the lead

while others may still struggle for the timeline.

According to VCBS, it is hard to neutral the loosening monetary

policies as method used is unconventional loose monetary policy.

In case the central banks begin to neutralize the loosened

monetary policy, (1) this is a positive signal when the world

economy gradually recovers, minimizing the risk of global

economic crisis. (2) Note that, the negative impact on Vietnam is

faint and weak as it is indirect effect.

WORLD ECONOMY- AN IMPORTANT FOUNDATION

0

100

200

300

400

500

600

700

0

1000

2000

3000

4000

5000

6000

7000

8000

01/1

2/1

0

01/0

7/1

1

01/0

2/1

2

01/0

9/1

2

01/0

4/1

3

01/1

1/1

3

01/0

6/1

4

01/0

1/1

5

01/0

8/1

5

01/0

3/1

6

01/1

0/1

6

01/0

5/1

7

01/1

2/1

7

01/0

7/1

8

01/0

2/1

9

01/0

9/1

9

01/0

4/2

0

01/1

1/2

0

01/0

6/2

1

Monetary base in some countries

US, $bn (LHS) Europe, €bn (LHS) Japan, ¥ tril (RHS)

0

30

60

90

120

150

180

Commodities indexes, 2019=100

Energy Agriculture Metals Precious metals


EXPECTATION OF VIETNAM ECONOMIC REBOUND POST- PANDEMIC

4

Vietnam's success in recent years has been to ensure

macroeconomic stability, create attractiveness for private and

international investment flows so as to utilize the resource to

restore production activities in the post-pandemic period.

A bright spot from the SBV's operating policy that they have

flexibility and clear forward guidance to market participants. With

resources available on hand, the SBV has enough tools and policy

measures space to control inflation and stabilize the macro-

economy in the coming period.

In 2022, Vietnam is forecast to continue to benefit from the trend of

(1) shifting production from China to Asian countries; and (2) Free

Trade Agreements are signed. However, some risks may arise from

a lower-than-expected recovery in world demand. Similarly, the

domestic economic recovery is fragile against the threat of new

strains.

Source: IMF, GSO, CEIC, VCBS Research

44.8

23.1

14.6

3.6

8.7 5.4 6.1

15.6

1 2.2

8.7 6.4

Fiscal response to the Covid-19 crisis in some

Asian countries (%GDP)

0

5

10

15

20

25

2015 2016 2017 2018 2019 2020 11T.2021

Foreign Direct Investment (bn USD)

FDI Registered FDI Implemented

30

35

40

45

50

55

60Manufacturing PMI

Manufacturing PMI PMI threadhold (50)


GROW REBOUNDS BUT STILL VULNERABLE TO NEW WAVE OF THE

PANDEMIC

5

Vietnam is on the right track in the process of safely adapting to the

epidemic.

Compared with other countries in the region, Vietnam, although

lagging behind, has made many remarkable achievements in the

vaccination campaign.

The economic stimulus package will have a significant amount of

money for the health sector.

Risks: New variants emerge (Omicron variant is expected to account

for a quarter of new global cases early next year).

2021: GDP growth is estimated at 2.58%

Economic activities continued to recover despite the degree of

divergence, the Government showed a quick response in management.

A bright spot in the coordination of monetary and fiscal policy.

2022: GDP growth will reach 6.8%-7.2%.

Growth in public spending can have a positive impact on consumer

spending and private investment. Consumer demand gradually

recovered.

A reasonably sized economic stimulus package targeting the right

sectors and before the Lunar New Year will help Vietnam keep up with

the world's recovery. The risk, if any, is that the world economic

recovery slows down, reducing the growth rate of import and export

turnover.

Expectations of bright spots on monetary policies and a harmonious

combination with fiscal policies will continue to be prolonged in the

coming years.

Source: Ourworldindata, VCBS Research

75.0

80.0

85.0

90.0

95.0

100.0

105.0

110.0

Q4 Q1 Q2 Q3 Q4 Q1

2019 2020 2021

GDP index , 2019Q4=100

Philippines

Malaysia

Việt Nam

-10

-5

0

5

10

15

200

250

300

350

400

450

500

550

01/19 05/19 09/19 01/20 05/20 09/20 01/21 05/21 09/21

Tn

. V

ND

Retail Sales

Trade Hotel & Restaurant Services & Tourism Growth rate (%)


VCBS assesses that in 2022, the operator still has the tools in hand

and demonstrate the determination to stabilize the price level:

The government continued to delay the time of increasing basic

salary, instead of the July 2022 plan.

Risk for food groups: short-term supply shortages due to supply

chain interruptions after the pandemic; However, in general, we

believe that Vietnam with its agricultural strength can control the

supply.

Flexible and policy-oriented messages from the operator are clear

and consistent.

Prices of public goods and services, electricity, water, and

healthcare are under the control of the Government

However, there are some factors that put upward pressure on inflation

in 2022:

Domestic demand may record a significant improvement in non-

essential consumption.

Fuel prices may stay at high levels and these levels can be

maintained until the first half of 2022.

Upward pressure may record on medical group in the next year.

To sum up, with all the factors, VCBS forecasts inflation to

increase by 4.0% - 4.5% for the whole year 2022.

ECONOMIC STABILITY – INFLATION

6

Source: CEIC, GSO, VCBS estimates

Inflation may increase higher than the average of previous years, but still under control

Food

Eating out of the

family

Food Housing and

building

materials Traffic

Household appliances

and appliances

Garment, hats, shoes

Education

Medicines and

medical services

Culture, entertainment

and tourism

Beverages

and

cigarettes Other

supplies and

services

Post and

Telecommunication

CPI

-2%

0%

2%

4%

6%

8%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

01/1

8

04/1

8

07/1

8

10/1

8

01/1

9

04/1

9

07/1

9

10/1

9

01/2

0

04/2

0

07/2

0

10/2

0

01/2

1

04/2

1

07/2

1

10/2

1

01/2

2

04/2

2

07/2

2

10/2

2

CPI forecast 2022

CPI (mom) CPI (yoy)


The foreign exchange market is expected to have stable movements:

Domestic factors: Investment inflows may choose countries that ensure

macroeconomic stability and positive growth. Vietnam, with its ability to

control the pandemic, will maintain its attractiveness to investment flows,

especially FDI.

The SBV still demonstrates flexible and consistent policies to control

inflation and stabilize the macro-economy in general and the exchange

rate in particular.

External factors: The highlight that makes a difference is the tendency of

gradually narrowing easing programs of the world's central banks. In

particular, if the Fed narrow faster than the ECB, the BOJ (relatively high

probability) will lead to the possibility of USD appreciation more than

other foreign currencies; thereby putting pressure on VND.

VND is forecasted to depreciate against USD, with a fluctuation of no

more than 2% for the whole of 2022.

ECONOMIC STABILITY – EXCHANGE RATES

7

Source: CEIC, Bloomberg, SBV, VCBS estimates

VND may depreciate against USD in the next year.

0

20

40

60

80

100

120

2012 2013 2014 2015 2016 2017 2018 2019 2020 11T.2021

Foreign reserve (USD bn)

85

90

95

100

105

01/18 04/18 07/18 10/18 01/19 04/19 07/19 10/19 01/20 04/20 07/20 10/20 01/21 04/21 07/21 10/21

DXY

21,000

21,400

21,800

22,200

22,600

23,000

23,400

23,800

24,200

03/18 06/18 09/18 12/18 03/19 06/19 09/19 12/19 03/20 06/20 09/20 12/20 03/21 06/21 09/21 12/21

Exchange rate USD/VND

Central exchane rate Ceiling exchange rate

Floor exchange rate VCB spot bid exchange rate


ECONOMIC STABILITY – DEPOSIT AND LENDING RATES

8

Source: GSO, VCBS compiles

Credit growth

The State Bank of Vietnam maintains a consistent orientation in 2022: requires

commercial banks to support capital for businesses to recover after the pandemic.

Therefore, credit growth may be higher than in 2021, reaching 13% - 15%.

The main target is still focused on controlling bad debts in the banking system,

leading to a further divergent credit growth trend. Credit will focus on credit

institutions with good asset quality, and credit will be less favorable for credit

institutions that have not finished handling bad debts, or have alarmed levels of

bad debts after the pandemic.

Deposit rates

Deposit rates may move sideways in the next year

The process of narrowing easing programs of major central banks in the world

will take place at a slow pace, the time when the Fed starts to raise interest rates

may appear at the end of 2022.

The SBV's overall orientation is to ensure liquidity, keep deposit rates at low

levels, and dedicate resources to deal with bad debts.

Risks: Upward pressure on deposit rates may appear at the end of the year, when

banks usually boost credit growth; However, VCBS believes that this pressure, if

any, will not be large.

Lending rates

The goal of reducing lending interest rates to support businesses in recovering from the

pandemic can be achieved thanks to factors:

Foreign inflows may create favorable conditions for the State Bank to proactively

regulate money supply and liquidity when necessary.

The exchange rates are stable, with reasonable fluctuations of VND compared to

other currencies in the region.

Deposit rates stay at low levels, which is basis for the downtrend of lending rates.

Interest rate levels are forecasted to move sideways in a narrow range, the

upward pressure on deposit rate, if any, shall be small and transitory.

4%

9%

14%

19%

24%

29%

34%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 E2021 E2022

Credit growth

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

Average deposit rates (Unit: %)

D.R (1 month) D.R (3 months)D.R (6 months) D.R (above 12 months)

MACROECONOMY EQUITY MARKET INDUSTRY & STOCK PICKS FIXED INCOME 9

Source: VCBS Research

Macroeconomic indices 2022

CPI

Deposit rate: remain low

Lending rates: there is

still room to decrease

GDP

6.8% - 7.2%

Exchange rates Depreciate ≤ 2%

Inflation

4% - 4.5%

MACROECONOMIC OUTLOOK 2022

2.91%

2.58%

6.8%-7.2%

0%

1%

2%

3%

4%

5%

6%

7%

8%

2013 2014 2015 2016 2017 2018 2019 2020 E2021 E2022

GDP growth

2022: GDP growth will reach 6.8%-7.2%, but economy rebounds still vulnerable to new wave of the pandemic.

Commodities price may cool down and settle at a lower level in 2022;

Central banks: tapering process begin though there shall be divergence between central banks.

Global economic recovery continues but at a slower speed due to pandemic resurging, policy support proves to boost the

process.

Inflation may be under certain upward pressure, but still within control; VCBS forecasts that inflation may increase by 4%-4.5%

for the whole year 2022.

The foreign exchange market will still observe favorable condition thank to inflow. However, VND is expected to depreciate less

than or roughly 2% against USD for the whole of 2022 due to external factors.

Deposit interest rates may move sideways in a narrow range. The upward pressure, if any, shall be small and transitory. Lending

rates remain low.

MACROECONOMY

FIXED INCOME MARKET

EQUITY MARKET


MACROECONOMY EQUITY MARKET INDUSTRY AND STOCKS PICK FIXED INCOME

BOND MARKET - Overview

11

DIVERSIFICATION INTO CORPORATE BONDS

Source: MOF, VCBS

25,000

28,707

34,412

48,047 42,769

97,413

115,416

146,039

296,713

432,157

503,153

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

The amount of bond issued

Gov Bond Gov-Backed Bond Muni Bond Corp Bond

3.3% 2.0%

2.7% 2.5%

3.4%

5.3% 6.2% 8.6% 12.4%

15.1%

16.1%

0%

10%

20%

30%

40%

50%

60%Bond outstansding/GDP

Gov Bond Gov-Backed Bond Muni Bond Corp Bond


GORVERNMENT BOND - Recap 2021

12

Source: HNX, VCBS estimates

The downtrend in yields continues to dominate. Market liquidity decreased

slightly compared to 2020.

Bond yields for short tenors inched up, because the interbank rate levels

this year were higher than the same period last year.

Although there was no shortage of liquidity, the decline in bond yields

for long tenors was quite modest, especially in Q3. Because bond yields

had dropped quite sharply for a long time before, investor’ sentiment is

quite sensitive to potential factors that may impact macro stability.

Reasons for the decline in bond yields: (1) Central banks still showed a

consistent and flexible move so as to support the economy's recovery.

(2) The government shows efforts to control the pandemic. (3)

Government bonds are the first choice for liquid assets with fixed

income.

-

50

100

150

200

250

300

350

Jan-1

9

Mar

-19

May

-19

Jul-

19

Sep

-19

Nov

-19

Jan-2

0

Mar

-20

May

-20

Jul-

20

Sep

-20

Nov

-20

Jan-2

1

Mar

-21

May

-21

Jul-

21

Sep

-21

Nov

-21

VN

D T

ril

lio

n

Secondary market

Outright Repo

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

01

/20

02

/20

03

/20

04

/20

05

/20

05

/20

06

/20

07

/20

08

/20

09

/20

10

/20

11

/20

12

/20

01

/21

02

/21

03

/21

04

/21

05

/21

06

/21

07

/21

08

/21

09

/21

10

/21

11

/21

12

/21

Bond Yields

1Y 2Y 3Y 4Y 5Y7Y 10Y 15Y 20Y 30Y

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

5Y 7Y 10Y 15Y 20Y 30Y

Goverment bond issuance 2021

Offering volume Winning volume

Winning-to-offering ratio Issuing plan


INTERBANK RATES – Forecast 2022

13

Source: Bloomberg, VCBS estimates

In 2022, we expect stable liquidity, interbank rates may increase slightly by 20-50 bps compared to the levels in 2020-2021

Liquidity will be stable and abundant when Vietnam is an ideal destination for foreign capital flows.

The macroeconomic stability (inflation under control, stable exchange rate) will be factors to support liquidity.

However, liquidity is unlikely to be redundant as in 2020-2021 when resources in the next year will be focused on economic

activities to support businesses to recover from the pandemic.

Interbank rates are highly dependent on the SBV's management and orientation in the open market through repo and bills.

We expect liquidity will be stable and abundant, interbank rate levels may increase slightly, especially around certain times,

such as inflation pressure, seasonal effect.

Liquidity in the interbank market will remain stable and abundant. However, the average interest rates may increase slightly

Recap 2021

Interbank rates are under slight upward pressure,

but still at low levels and far away from OMO rate

(2.5%/year).

Liquidity in the market in 1H.2021 is not too

abundant when new resources can only appear on

the market from July after the forward contracts

are due and the State Bank changes the method of

buying foreign currency. Accordingly, in the

2H.2021, interbank rates have decreased again.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

02

/12/2

0

17

/12/2

0

01

/01/2

1

16

/01/2

1

31

/01/2

1

15

/02/2

1

02

/03/2

1

17

/03/2

1

01

/04/2

1

16

/04/2

1

01

/05/2

1

16

/05/2

1

31

/05/2

1

15

/06/2

1

30

/06/2

1

15

/07/2

1

30

/07/2

1

14

/08/2

1

29

/08/2

1

13

/09/2

1

28

/09/2

1

13

/10/2

1

28

/10/2

1

12

/11/2

1

27

/11/2

1

12

/12/2

1

27

/12/2

1

ON 1W 2W 1M

Interbank rates


GOVERNMENT BOND– BOND YIELDS PROJECTION 2021

14

We forecast that the demand for bond issuance may increase in 2022, but

the supply-demand imbalance will not occur.

It is forecast that the issuance volume will be around 350-370 billion VND

(unchanged compared to 2021).

The State Treasury will continue to demonstrate its ability to properly

regulate the supply in order to optimize benefits for the State Budget in

each period.

In addition, the volume of government bonds to maturity decreased sharply

compared to 2021, reducing the pressure of debt restructuring.

Bond yield movements: Bond yields have room to decrease, but the level of

reduction and volatility will not be as large as 2020. Bond yields may

increase slightly in

Policy of central banks: gradually narrow easing programs. The upward

trend in asset price shall be slowed (however, the possibility of a deep

decline is unlikely).

The money market in VN: interbank rate levels may inch up 0.2%-0.5%

(higher than the average years 2020-2021), resources should focus on

economic activities. Vietnam maintains its attraction with foreign inflows,

thereby creating an abundant source of liquidity in the banking system.

Bond yields for 10Y may fluctuate between 2.0% – 2.5%

The most liquid tenors shall be 7Y-10Y and it shall gradually move to

higher tenors.

Source: HNX, VCBS Research

Stable

macroeconomic

indicators

Attracting inflows

(FDI, FII,

remittances)

Stable exchange

rates USD/VND

Abundant

liquidity

Govt bond

yields

Tracking factors: An unexpected factor in the market, if any, shall be an

event causing the operator to tighten the liquidity of the banking system:

Inflation may rise dramatically out of control.

The world market experienced shocks/strong fluctuations, creating

systemic risks globally

0

2,000

4,000

6,000

8,000

10,000

12,000

01

02

03

04

05

06

07

08

09

10

11

12

VND Billion Maruted bonds in 2022

ST VDB VBSP Other


Source: Fiinpro, VCBS compiles

CORPORATE BOND MARKET – 2021 HIGHLIGHTS

Enterprises promoted

issuing bonds

Decree 81/2020

with stricter

conditions took

effect from Sep 1

Vietnam saw some

first Covid-19 cases

A time before

many new legal

documents take

effect in 2021

The market gets used to

new procedures Enterprises promoted

issuing bonds

0

20,000

40,000

60,000

80,000

100,000

120,000

01/20 02/20 03/20 04/20 05/20 06/20 07/20 08/20 09/20 10/20 11/20 12/20 01/21 02/21 03/21 04/21 05/21 06/21 07/21 08/21 09/21 10/21

Issued bonds (VNDbn)

Legal documents related to corporate

bonds take effect from Jan 1, 2021

Law of securities 2019

Law on Enterprises

Decree 153/2020/ ND-CP

Decree 155/2020/ND-CP

Dated Legal documents issued by the State Bank to guide corporate bonds Take effect

31/03/2021 Circular No. 01/2021/TT-NHNN prescribing the domestic issuance of promissory notes, treasury

bills, deposit certificates and bonds by credit institutions and foreign bank branches 17/05/2021

30/07/2021

Circular No. 12/2021/TT-NHNN prescribing purchase and sale by credit institutions or foreign

bank branches of promissory notes, treasury bills, deposit certificates and bonds issued

domestically by other credit institutions or foreign bank branches

27/10/2021

10/11/2021 Circular No. 16/2021/TT-NHNN prescribing the purchase and sale of corporate bonds by credit

institutions and foreign bank branches 15/01/2022


Bank & Real estate are the sectors that account for a large proportion in the volume of issued bonds.

Source: Fiinpro, VCBS compiles

0%

2%

4%

6%

8%

10%

12%

0

1

2

3

4

5

6

7

8

Real estate Bank Energy Finacial instution

Average tenor and yields in 2020

Average tenors Average yields

CORPORATE BOND MARKET – 3Q.2021 HIGHLIGHTS

0%

2%

4%

6%

8%

10%

12%

0

1

2

3

4

5

6

7

8

Real estate Bank Energy Finacial instution

Average tenor and yields in 3Q.2021

Average tenors Average yields

Real

estate

30%

Banks -

FI

29% Energy

7%

Others

34%

Corporate bonds issued by sector

2020

Real

estate

34%

Banks -

FI

36%

Energy

6%

Others

24%

Corporate bonds issued by sector

3Q.2021

Some businesses issue large volumes in 3Q.2021

Enterprises Industry Value

(VNĐ bn)

Vingroup Jsc Group 15,966

Vietnam Prosperity Commercial Bank Bank 13,000

Asia Commercial Bank Bank 9,700

Orient Commercial Bank Bank 7,000

Novaland Real estate 6,826

Golden Hill Investment Corporation Real estate 5,760

Tien Phong Bank Bank 5,000

BIM Land Jsc Real estate 4,635

MACROECONOMY

FIXED INCOME MARKET

EQUITY MARKET


UPDATES ON

COMMODITIES PRICE

BRENT OIL PRICE

19

Daily Weekly Monthly Quaterly Yearly YTD

4.61% -4.55% -10.20% 4.36% 60.42% 46.85%

Data as of November 29th, 2021

• In 2021, despite the impact of the Covid-19 pandemic with

many variants of concern, the price of Brent oil has

continuously set new highs and reached a 7-year high in early

October 2021.

• There are many factors driving the rise in oil prices. The

main factor is due to tight supply, with the Organization of the

Petroleum Exporting Countries (OPEC) maintaining its plan

to gradually increase supply instead of intervening to extract

more oil for the market and when the US demand increases. In

addition, Reuters said that the lack of coal and gas in China

also stimulated the oil market when many people feared that

factories would switch to gasoline.

• In its Short-Term Energy Outlook released on November

09th, 2021, the US Energy Information Administration (EIA)

said that supply will increase next year from OPEC countries

and from oil producers. of the United States, and this will put

downward pressure on oil prices. Accordingly, WTI crude oil

price may reach as low as USD 62 per barrel by the end of

2022 and Brent oil price will reach an average of USD 72 per

barrel in 2022.

• However, contrary to the forecasts from EIA, the Wall Street

banks are forecasting high oil prices in the short and medium

term. Specifically, Goldman Sachs predicts Brent oil price to

reach USD 90 per barrel by the end of this year, higher than

the previously expected price of USD 80 per barrel, as global

oil demand recovers in the context that the supply from

suppliers non-OPEC+ oil production remains limited. Sharing

the same view, Morgan Stanley (USA) raised its long-term oil

price outlook by USD 10 per barrel to USD 70 per barrel.

10

30

50

70

90

110

US

D/b

arre

l

Brent oil price movements

2021 2020

STEEL

20


-0.40% 1.49% -9.44% -9.66% 21.43% 13.16%

• China's spot steel price has increased sharply since Q4.2020

and maintained this upward trend until May 2021, reaching the

highest level since mid-2008. Recently, although it has slowed

down, the average steel price worldwide demand has reached

USD 711 per ton, more than 21% higher comparing to the price

of only USD 582 per ton last year.

• Meanwhile, iron ore prices in 2021 and the following years are

forecasted to continue to decline due to increased supply but

reduced demand. Iron ore prices on the Chinese market on

November 18th, 2021, fell to the lowest level in more than a

year due to the gloomy demand outlook for steel and steel

materials in the world's second largest steel producer.

• Many different opinions on the prospect of steel prices in the

coming period was made. Specifically, the international

financial rating agency of Fitch Solutions forecasts an average

global steel price of USD 600 per ton in 2022 and USD 535 per

ton in 2023-2025. Steel demand growth will slow down in

China and increasing protectionism in the global steel market

will boost steel production in affected countries. The

combination of these two factors will help the steel market

loosen and drag prices down in the medium term

• The World Steel Association (Worldsteel) forecasts the steel

demand to grow 4.5% in 2021 and reach 1,855 million tons

after 0.1% growth in 2020; will then increase by 2.2% to 1,896

million tons in 2022. These figures assume that positive

progress in COVID-19 vaccination programs will weaken the

epidemic, the spread of variants of the SARS-CoV-2 virus will

cause less damages and disrupting supply chains than previous

waves.


450

550

650

750

850

950

1,050

CN

Y/t

on

Steel price movements

2021 2020

NATURAL RUBBER

21


-0.57% -2.34% 1.10% 3.30% 6.31% 16.50%

• In the first months of 2021, rubber prices at key exchanges

increased due to increased demand and the market's expectations

for the world economic recovery after the 2020 epidemic.

However, the price continued to decline after that due to a

shortage of shipping containers and countries such as India, South

Korea and Thailand faced an increase in the number of people

infected with the SARS-CoV-2 virus, reducing expectations of an

economic recovery of the region. By the beginning of October,

the decline of rubber had clearly weakened and is now returning

to an impressive recovery progress.

• The Association of Natural Rubber Producing Countries

(ANRPC) said that the worldwide exploitation of natural rubber

in 2021 is expected to be 13.86 million tons while the

consumption demand is expected to be 14.166 million ton. Thus,

the data shows that the world will be short of 240,000 tons of

natural rubber in 2021. This is the main reason for the sharp

increase in rubber prices this year. In addition, due to the shortage

of supply, the rising oil prices also led to an increase in the price

of synthetic rubber, because this is an input material for synthetic

rubber production.

• ANRPC forecasts that the upward trend in rubber prices will

continue in the coming months, as global supply remains tight

largely due to irregular, non-seasonal rains that have affected key

rubber growing regions in India, Thailand and Malaysia. In

particular, Thailand and the main rubber growing areas of

Malaysia have experienced a long rainy season due to the

influence of La Nina. On the other hand, the easing of restrictions

related to the Covid-19 pandemic such as the reopening of

international borders of some countries and the resumption of

more economic activities have significantly contributed to the

revival of the high-tech industry.


80

100

120

140

160

180

200

220

JPY

/kg

World’s natural rubber price movements

2021 2020


MARKET RECAP IN 2021

22

Source: Fiinpro, VCBS

VN Index +31.94% HNX Index +122.05%

GDP Q3 -6.17% yoy

150

200

250

300

350

400

450

500

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

04/01 19/01 03/02 18/02 05/03 20/03 04/04 19/04 04/05 19/05 03/06 18/06 03/07 18/07 02/08 17/08 01/09 16/09 01/10 16/10 31/10 15/11 30/11VN-Index HNX-Index

4th wave of COVID-19

pandemic in Viet Nam

New securities accounts

continued to increase

Commodity prices are

increasing in the world

Vietnam speeded up vaccination

campaign against Covid-19

The Fed signaled to gradually

reduce asset purchase programs

Package of tax exemptions,

reductions for businesses and

individual business households

Cities reopen, but still

ensure safety for people

3rd wave of COVID-19

pandemic in Viet Nam

GDP Q2 +6.61% yoy

GDP Q1 +5.64% yoy

The elections of deputies to the 15th

National Assembly and all-levels

People's Councils

Circular 03/2021/TT NHNN extend debt

moratorium for loans affected by Covid-19


COMPARATIVE VALUATION OF VIETNAM’S STOCK MARKET

27

Source: Fiinpro, Bloomberg, VCBS

15.95

11.07

28.88

23.05 20.71

2.05 1.74 1.39 1.43 1.43

0

5

10

15

20

25

30

35

VN Index IDX Composite Index FTSE Bursa Malaysia

EMAS Index

PSE All shares Index SET Index

Vietnam Indonesia Malaysia Phillipines Thailand

P/E & P/B ratio in ASEAN stock market

P/E

P/B

1.85

2.44 2.68

3.54

2.37 2.27

3.16

2.35

3.96

00.5

11.5

22.5

33.5

44.5

P/B valuation

2020 2021

18.54

11.67

25.35 23.43

18.59 16.41

21.21

13.56

24.57

0

5

10

15

20

25

30

P/E valuation

2020 2021


HIGHLIGHTS OF VN INDEX

25


VN Index maintained a positive upward momentum in

2021 and officially surpassed the 1,500-point threshold

on November 25th, 2021, despite experiencing two

severe waves of Covid-19 epidemic at the end of January

and May 2021. In general, the cash flow continued to

pour into the market, showing that investors still have

certain faith in the prospect of Vietnam's stock market

with the expectation that the epidemic will be controlled

and the economy will gradually recover after that.

The new trading system of HSX has been officially put

into operation since the beginning of July 2021, helping

to relieve the liquidity bottleneck in the previous period

and make the average liquidity per session on the HSX

increase steadily. both in terms of transaction value and

volume. As of November 25th, 2021, the average trading

volume per session reached 972.04 million shares per

session, more than 126% higher comparing to the

average of 2020. The average trading value per session

also increased by more than 3.5 times comparing to 2020

and reached VND 25,745.91 billion.

Following the bullish trend of VN Index, most stocks

recorded a price increase comparing to the beginning of

this year. Contributing mostly to the index's overall gain

were the shares of HPG, VPB, NVL, MSN, TCB. In

contrast, VNM, SAB, BID, HNG recorded a downward

trend and contributed mostly to the downtrend of VN

Index, although the loss was not significant.

150

300

450

600

750

900

1,050

1,200

1,350

1,500

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400

1,450

1,500

Mil

.shar

es

VN-Index

Volume VN - Index

-1.50%

-1.00%

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Top index contributions


FOREIGN INVESTORS’ HIGHLIGHTS

25

Source: Fiinpro

In 2021, foreign investors maintained the main net selling

trend, with the total net selling price on all 3 exchanges

reaching VND 54,928 billion on all three exchanges, 3.6 times

higher than the total net selling volume of foreign investors in

2020. On average, foreign investors net sold VND 1,144

billion per week. Foreign investors only net bought in April

and July, corresponding to the time when VN Index surpassed

the thresholds of 1,200 and 1,400.

HPG shares were strongly sold by foreign investors with more

than 17 million shares, followed by VPB, VNM, VIC and

CTG, respectively. On the other side, STB was the strongest

net bought with more than 4 million shares, followed by VHM,

MWG and PLX. In addition, the FUEVFVND ETF certificates

were also purchased with more than 3.5 million certificates.

(20,000,000)

(15,000,000)

(10,000,000)

(5,000,000)

0

5,000,000

10,000,000 Top 5 net bought/sold 2021

(60,000)

(40,000)

(20,000)

0

20,000

40,000

60,000

Foreign investors' trading values on HSX, HNX

and UpCOM (VND bn)

Buying value Selling value Net value


VN30 INDEX HIGHLIGHT

26


• By the end of November, VN30 index closed at 1,537.59 points, an increase of 43% since the beginning of 2021. VN30 Index surged

from February to July with a growth of 53%, then accumulated sideway from 1,450 to 1,500 levels. The next rally started from

August until now, liquidity has been weaker since market cash flow tended to rotate toward mid-cap stocks outside the stock basket

constituting VN30 Index. The average transaction value per session reached VND 10,200 billion, up by 3x times compared to 2020.

• By the end of November 2021, foreign investors net sold constituent stocks in the VN30 Index at VND 44,960 billion in value.

Particularly, the week from May 24th to 28th recorded a peak net selling value of 5,883 billion. However, from July to the beginning

of August, foreign investors were strong net buying contrary to the general trend throughout 2021, with a total net buy value of VND

7,616 billion.

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

450,000,000

500,000,000

1,000.00

1,100.00

1,200.00

1,300.00

1,400.00

1,500.00

1,600.00

1,700.00

VN30 Index

VN30 Index Đóng cửa

(7,000)

(6,000)

(5,000)

(4,000)

(3,000)

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

(120,000,000)

(100,000,000)

(80,000,000)

(60,000,000)

(40,000,000)

(20,000,000)

0

20,000,000

40,000,000

60,000,000

80,000,000

1 6 11 16 21 26 31 36 41 46

Foreign investors trading value & volume

Khối lượng ròng(CP) Giá trị ròng(tỷ VNĐ) Volume

Volume (shares) Value (VND billion)


DERIVATIVE MARKET HIGHLIGHT

27


• The derivatives market grew positively in 2021. In terms of VN30 futures, the average trading value per session in 2021 reached

VND 26,553 billion, up 106% compared to 2020’s. Liquidity of the future market increased the most from June to early August,

falling into the correction of the VN30 index from the historical peak of 1,560 points to below 1,400 points and then stayed flat in

about 2 months.

• The liquidity of the Covered Warrant (CW) market continued to flourish in 2021. Specifically, the average trading value per session

has increased to VND 74.4 billion, which was 3.5 times higher than that in 2020. There are currently 64 CWs being traded in the

market and based 16 underlying stocks.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1,000.00

1,100.00

1,200.00

1,300.00

1,400.00

1,500.00

1,600.00

VN30 Futures – 1 months settlement

KLGD (Hợp đồng) VN30F1M

0

50

100

150

200

250

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

Covered Warrant

KLGD GTGD (tỷ đồng) Contract volume Contract volume Trading value (VND billion)

STOCK MARKET

OUTLOOK IN 2022


In 2022, we forecast that Vietnam's economy will gradually regain the economic growth momentum as in the pre-

epidemic period, but along with higher inflation. Deposit rates may increase slightly; however, still stay at low levels

thanks to abundant liquidity in the banking system.

In such a context, the stock market continues to be an attractive investment channel - especially for individual

investors. Although we expect inflow from domestic investors to have a certain growth in 2022, it will be less

exciting than in 2021. It is because the price level of stocks is already at a higher level than that at the beginning of

2021, and the recovery of the economy also opens up other options for domestic investors to invest. Thus, we

forecast that the highest peak of VN Index in 2022 may reach 1,580 – 1,600 points, equivalent to an increase of

6-8% compared to the peak of 2021.

The new trading system of HSX has been officially put into commission since July 2021, which has helped remove

the "bottleneck" in order-matching liquidity on the HSX. It is difficult to record an "explosive" increase like in the

second half of 2021. However, we forecast that the upward trend in liquidity will continue in 2022. In specific,

2022’s average trading volume is forecasted to increase slightly compared to 2021’s, reaching over 1 billion

shares per session on all three exchanges, equivalent to an increase of about 8-10% yoy. The average trading

value in 2022 is expected to increase by 17-20% compared to 2021, corresponding to about 28,000-30,000

billion VND per session on all three exchanges.

FORECAST OF VN INDEX IN 2022

29


INVESTMENT SUGGESTIONS IN 2022

30

“PANNING FOR GOLD”

Covid-19 epidemic has put the Vietnam’s economy through a period of changes, both inside the domestic economy as well as

in the global economic context. Vietnam’s government has been implementing many measures to both restore production in the

context of the "new normal" and reform the nation’s economic development model. On the other hand, major economies in the

world are also gradually innovate their "growth engines" towards the goal of a more environment-friendly economy as well as

bringing better equality among people. In such a scenario, we expect that Vietnam’s stock market will face a high level of

volatility in 2022 with many short bullish waves interspersed with bearish shocks, although the overall trend is still going up.

We also expect that the polarization among stocks - which started

in Q4.2021 - will continue. Therefore, investment opportunities

in 2022 will need to be more selective and go deeper into each

listed company, based on business results as well as growth

prospects in the context of "new normal" economy. Some of the

investment suggestions that we introduce in 2022 will be:

Real estate businesses with a big land bank and strong finance,

as well as having a clear growth target in 2022;

Private joint stock commercial banks maintained a growth rate

higher than the industry average - especially small-sized ones;

Retail businesses of luxury goods witnessing customers’

demand bounce back after social distancing period;

A number of companies operating in resource-exploitation-related industries such as crude oil extracting, cement, mining and

processing of non-ferrous metal,...

Finally, a few large-cap stocks can lead the trend of the overall market for some time and create short bullish waves of VN

Index.

STOCK PICK

31

• BID MBB MSB TCB BANK

• VHM AGG RESIDENTIAL REAL ESTATE

• TIP NTC INDUSTRIAL PARK SECTOR

• VGC VCS CONSTRUCTION MATERIALS

• QTP HND POWER SECTOR

• VHC MPC SEAFOOD

• PLX GAS OIL & GAS

• PET DPR OTHERS

BANKING SECTOR

MACROECONOMY EQUITY MARKET INDUSTRY & STOCK PICKS FIXED INCOME Back

BANKING SECTOR – CREDIT

Credit slowed down as Vietnam’s economy suffered from the 4th wave of

Covid-19:

- In Q3, credit growth was almost flat due to the impact of the pandemic outbreak.

By the end of October 2021, credit growth reached 8.72%, higher than the growth

rate of 7.55% in the same period of 2020, thanks to social distancing measures

being loosen.

- Current credit demand remains positive. Credit growth is expected to reach 13%

for the whole year of 2021. In which, dynamic private banking group continues to

have outstanding growth rate of 15-25%.

SBV has loosened the credit growth room twice in Q3 and Q4 as the credit

room level at the beginning of the year was relatively low. We believe that

banks with high CAR and good risk management models such as TCB, TPB,

VPB, MBB, ACB, HDB, VIB, MSB, etc. will be granted a higher-than-average

credit limit than the industry average in the long run.

8.72%

0.00%

5.00%

10.00%

15.00%

20.00%

T1 T2 T3 T4 T5 T6 T7 T8 T9 T10 T11 T12

Credit growth ytd

2016 2017 2018

2019 2020 2021

Source: SBV, Banks, VCBS Research

12.0% 12.5% 15.0%

21.0%

17.1%

14.3%

22.1%

15.0%

19.3% 18.1%

23.4% 22.0%

15.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

BID CTG VCB STB MBB ACB VPB SHB TCB HDB VIB LPB TPB MSB OCB

Credit growth limit 2021

Room granted at beginning Room raised in Q3 Room raised in Q4 CAR 2020 (RHS)

33



The credit growth rate of the whole industry is forecasted to remain at a high level in the long

term: Vietnam is among the countries with the highest GDP growth rate in the world. Economic growth

and the uptrend of retail credit will continue to be the drivers for credit growth in the long term.

Retail credit is the main driving force of credit in Vietnam's banking system in the past 5 years:

- The proportion of retail credit has increased from 31% in 2015 to 42% of total outstanding loans at the

end of Q3.2021, of which 2 retail products with the largest balances are currently home loans and car

loans.

- Retail and SME credits are also preferred by banks when the risk coefficient used in calculating CAR is

lower than that of large corporate loans according to Circular 41.

10%

4%

6%

5%

9%

4%

6% 7%

14%

00%

02%

04%

06%

08%

10%

12%

14%

16%

Private sector credit growth rate

2016 - 2020 CAGR

30.6% 32.6%

34.7% 37.5%

39.8% 40.7% 41.9%

20%

30%

40%

50%

Vietnam proportion of retail credit


6.4%

7.6%

7.9%

8.0%

9.1%

9.8%

10.2%

10.7%

10.9%

11.6%

11.6%

15.2%

17.0%

17.0%

-5.0% 5.0% 15.0% 25.0%

CTG

HDB

VPB

ACB

BID

SHB

OCB

LPB

VIB

VCB

TPB

MBB

TCB

MSB

9M.2021 Credit growth

Loan to customers Corp bond

40% 40% 44%

48%

0%

10%

20%

30%

40%

50%

60%

Việt Nam ASEAN-3 TQ Mỹ

Proportion of retail credit, 2020

34



35

9.1% 6.4% 11.6% 8.0% 15.2% 7.9% 17% 7.6% 10.9% 11.6% 10.2% 17%

Credit

growth

Q3.2021


5%

10%

15%

20%

25%

30%

35%

BID AGRB CTG VCB ACB MBB VPB TCB HDB VIB TPB OCB MSB

Customer loan growth CAGR 2018 - 2020

Average: 17,6%

Average: 23,9%

Average: 26,4%

Average: 11,9%

Credit growth is highly differentiated among banks

- The group of private banks with abundant equity capital, dynamic market approach, rich data acquisition and complying with

international risk management standards are granted a higher credit room and have higher credit growth rates than the industry

average.

- Credit market share of private banks continuously improved from 42% in 2015 to 46% in Q3.2021. Besides, thanks to efficient

operating models, the profit contribution ratio of the private banking group also increased from 39% to 64% in the same period.



Lending rates recorded a decrease of about 1.5% compared to the

period before the pandemic, compared to an average decrease of

1.7% in deposit rates. The decrease in lending rates is somewhat

slower than the decrease in deposit rates and is the main reason for the

increasing NIM of the whole industry in H1.2020.

State-owned commercial banks recorded a sharp drop in lending

rates right from Q2.2020 due to the reduction in interest rates to

support the economy, while private banks only recorded a clear

decrease from Q1 .2021.

In the long term, we expect lending rates to remain at a relatively

high level, helping NIM of the industry to remain positive, as the

form of credit management by granting credit growth room somewhat

limits the competition among banks, while the demand for loans of

retail customers will remain high for many years to come.


9.19% 9.30% 9.40%

9.75% 9.54%

8.92%

9.39% 9.09%

8.77% 8.96%

8.55%

7.8% 8.0% 8.1% 8.1% 8.0%

7.3% 7.5% 7.6%

6.9% 7.2%

6.8%

9.7% 9.8% 9.9%

10.1% 10.1%

9.6% 9.9%

9.6% 9.3% 9.3%

9.0%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

Lending rate

Lending rate of TCB, VPB, MBB, ACB

Lending rate of VCB, BID, CTG

Lending rate of private owned bank

36


BANKING SECTOR – DEPOSIT

At the end of September 2021, deposits from customers increased by

5.31% ytd, lower than credit growth of 7.42%.

The whole banking system recorded an increase in CASA ratio to

20.1% in Q3.2021 due to the sharp drop in term deposit interest rates to

a level that is no longer attractive enough, along with the boom of

securities and real estate markets attracting a large amount of cash flow.

We believe the interest rate trend will remain at a low level in the near

future, causing CASA ratio of the whole industry to continue to increase.

- The competition for CASA is increasingly fierce as many banks accept

to sacrifice part of service fees and invest in digital transformation to

attract new customers. Banks that have recorded a rapid increase in the

number of regular customers such as TCB, MBB, TPB, MSB... will have

more abundant deposits and reduce costs of fund in the long term.

Banks look to low-cost funding in the international market to make

more room to lower lending rates:

- International funding organizations such as IFC and ADB often require

funded banks to use capital for good purposes, have a good risk

management system, etc. The interest rates of these loans are usually set

pegged to international interbank interest rates and is currently around

1%/year.

- The cost of converting foreign currency into VND is now sharply

reduced, helping to promote capital raising from international credit

institutions.

Funding

organizations Limit Announcement time

VND billion USD million

VIB ADB 5,980 260 Q4.2021

IFC 3,312 144 Q1.2020

TPB IFC Q1.2020

OCB IFC 6,440 280 Q3.2021

VPB IFC 2,300 100 Q2.2020

HDB ADB 3,450 150 Q3.2021

MSB Commerzbank 2,300 100 Q4.2021

Seabank ADB 690 30 Q2.2021


18.7%

17.5% 17.2%

17.8%

16.9%

19.9% 19.4% 19.4%

20.1%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

15%

16%

17%

18%

19%

20%

21%

Demand deposit growth thanks to low term

deposit rate

CASA ratio Sum of listed banks' CASA

37


BANKING SECTOR – DEPOSIT

The average term deposit rate in the system decreased by 1.5 - 2% depending on the term compared to the time before the

pandemic, and there is no pressure to increase interest rates in the short term. We believe that at the moment, deposit costs

are not under upward pressure due to:

- System liquidity is still abundant after the SBV made spot foreign currency purchases with the amount of VND added to the banking

system in H2.2021 is estimated at VND 200-300 trillion.

- Credit growth room is not high, leading to low demand for deposits in banks.

- Related ratios such as LDR, Short-term capital for medium and long-term loans are still at safe levels.

- The industry-wide CASA ratio continued to increase in the context of low term deposit interest rates, along with the excitement of the

asset investment markets.

- Some banks can use low cost funding from international credit institutions to replace domestic mobilization.


3.00

4.00

5.00

6.00

7.00

8.00


D.R (1 month) D.R (3 months)

D.R (6 months) D.R (above 12 months)

4.96% 4.89%

3.09%

4.68% 4.88%

3.33%

5.50% 5.63%

4.06%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

Deposit cost yield

Deposit yield of group TCB, VPB, MBB, ACBDeposit yield of group VCB, BID, CTGDeposit yield of private owned banks

82.2

74.2

76.7

80.2

65.5

71.8

65.3

60

65

70

75

80

85

CTG VPB TCB ACB HDB OCB MSB

LDR (%)

LDR Q3.2021 Upper limit (85%)

38


BANKING SECTOR – NIM

NIM of the whole industry is in a long-term uptrend thanks to (1) increasing proportion of retail loans; (2) low credit room

reduces competition in credit extension and (3) strict management restricts external interest lending activities. Along with the

increasing trend of NIM, the decreasing trend of risk cost also caused the return on the same asset size of banks to increase sharply

in the past few years.

NIM hit a short-term peak in the first half of 2021 when lending rates fell slower than deposit rates. In particular, the group

of private banks benefited more at this stage when there was no significant pressure to reduce interest rates from SBV.

NIM decreased slightly in Q3.2021 compared to the first half of the year after SBV called on banks to lower lending rates to

support the economy.


3.30%

2.72%

5.51%

3.68%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

NIM on upward trend since 2014

NIM - whole system

NIM of group VCB, CTG, BID

NIM of group TCB, VPB, MBB, ACB

9.1% 9.3% 9.4% 9.5% 9.4% 8.8% 9.0% 8.9%

8.4% 8.5% 8.1%

5.1% 5.2% 5.3% 5.2% 5.2% 5.0% 4.6%

4.1% 3.8% 3.7% 3.7%

3.5%

3.7%

3.9%

4.1%

4.3%

4.5%

4.7%

4.9%

2.5%

3.5%

4.5%

5.5%

6.5%

7.5%

8.5%

9.5%

10.5%

Gap between lending and deposit rate

Gap (RHS) Lending rate Deposit rate

39


BANKING SECTOR – NON-INTEREST INCOME

Non-interest income increased positively with the main contribution from service income:

- Non-interest income increased, accounting for an average of 24.9% of total operating income of banks. In which, service income

increased strongly thanks to bancassurance fee (including the Upfront fee booked), transaction fees via digital bank and card service

fees.

Prospects of non-interest income: continue to be promoted in the long term to spread risks and diversify income sources

- Expanding digital banking and card services: The percentage of Vietnamese population with a bank account is currently at 31% and

the percentage of population using credit cards is at 2%, lower than other countries in the region.

- Reducing resources for payment activities and focus on developing services with better premium such as bancassurance and

investment banking: Bancassurance has a lot of growth potential when only 10% of the population has life insurance, while the

participation rate in developed countries can reach up to 90%. Investment banking services such as brokerage, underwriting, asset

management, etc. will continue to be promoted in the context of low interest rate environment boosting investment demand and the

stock and bond markets becoming more developed.

49%

21%

10% 4% 2% 2%

0%

10%

20%

30%

40%

50%

60%

Percentage of population using

credit cards


5% 6%

8%

9%

10%

11% 12%

12%

27%

Market share by new banca APE,

9M.2021

VCB

VPB

STB

TCB

ACB

MBB

SCB

VIB

Others

TCBS

17%

TPBS

10%

ABS

9% VND

8% HDBS

6%

Others

50%

Corp bond underwriting market

share H1.2021 (Exc FI Bond)

40


BANKING SECTOR – DIGITIZATION & OPERATING COSTS

The process of digital transformation accelerated during the pandemic:

- Cashless payment trend: the number of transfer transactions increased by 106%yoy in 2020

and increased by 40%yoy in 9M.2021. From March 2021 to October 2021, more than 1.8

million payment accounts are opened by eKYC.

- Commercial banks actively invest in promoting comprehensive digital transformation:

eKYC, open API, automate procedures, provide online services such as opening accounts,

granting credit, buying bonds, issuing L/ C, international money transfer...

- Some banks are ahead in digitization and in other activities such as increasing credit,

attracting customers, etc. by capturing large amounts of customer data.

CIR of the whole industry decreases year by year: with the largest proportion of

operating expenses being staff salaries and the size of staff at banks decreasing relative to

the size of assets, banks are becoming more efficient as asset size increases.

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2017 2018 2019 2020

Number of employee /1 VND trillion

customer loans

BID CTG

VCB ACB

MBB VPB và công ty con

TCB TPB

MSB


462 448

1,382

607 680

598

808 746 760

942

414 539

0%

10%

20%

30%

40%

50%

0

200

400

600

800

1,000

1,200

1,400

1,600

VP

B

BID

TC

B

CT

G

OC

B

TP

B

MS

B

AC

B M…

VC

B

HD

B

VIB

VN

D m

illi

on

Operating performance 9M.2021

EBT/Employee CIR

0%

50%

100%

150%

200%

0

500

1,000

1,500

2,000

2,500

3,000

Mil

lio

n t

ransa

ctio

ns

Number of money transfer

transaction

Number of transaction Growth yoy

41


BANKING SECTOR – ASSET QUALITY

NPL and potentially NPL is expected to reach 7.1-7.7% by the end of 2021 according to the SBV's estimate. However, the

increase in bad debt has a clear level of differentiation among banks:

- Total estimated NPL including: about 2-2.5% comes from SCB, 0.5% comes from STB; about 4% are restructured debt according to

Circular 01, Circular 03 and Circular 14. In 2020, the amount of restructured debt once reached 4% and decreased sharply in the

later period when economic activities returned to normal levels.

- Real estate is the main collateral for most loans, whose market currently sees an uptrend in price and therefore bad debt recovery is

easier than in the previous period. Other banks with high proportion of loans secured by cars also did not have much difficulty in

recovering assets as cars are registered in the bank's name.

Q3.2021 NPL

Restructured

loans at peak

2020

Restructured

loans

Q3.2021

Allowance LLCR

BID 21,433 36,000 27,000 30,055 140%

CTG 18,097 NA 46,000 21,464 119%

VCB 10,884 11,000 9,000 26,432 243%

ACB 2,822 9,000 13,000 5,580 198%

MBB 3,186 7,000 3,400 7,418 233%

VPB 12,702 27,000 15,900 6,217 49%

TCB 1,829 7,900 2,800 3,373 184%

HDB 2,679 7,900 200 2,169 81%

VIB 3,986 600 NA 2,155 54%

TPB 1,378 8,400 6,500 1,590 115%

MSB 1,907 1,532 1,759 1,183 62%

OCB 1,475 NA 2,003 1,105 75%

*Note: Banks have different ways of calculating and announcing restructured debt balances


10.6%

7.4%

5.9%

4.4% 3.8%

2.5% 2.0% 1.9% 1.6% 1.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2016 2017 2018 2019 2020 2021E

NPL and Potential NPL ratio

(calculated by SBV)

NPL and Potential NPL ratio NPL ratio

Estimated by SBV

at 7,1 – 7,7%

42


BANKING SECTOR – OUTLOOK 2022

Credit demand remains positive, industry credit growth rate will likely reach 13-14% in 2022. Banks with high CAR and dynamic

operating model will continue to be granted a high credit room than the industry average.

NIM may be slightly adjusted or remain unchanged in 2022, but can improve strongly in case the interest rate support packages are no

longer implemented when the pandemic is well controlled.

Bad debt and restructured debt depend a lot on the situation of the pandemic. In the base scenario, we forecast that the industry NPL will

increase when restructured debt reaches maturity and the rate of restructured debt decreases rapidly from Q4.2021. However, banks that we

consider having good asset quality will not face much pressure on provisioning.

EBT will still increase positively in 2022, however, there will be a clear level of differentiation with the potential of private banks able

to further lower the costs of fund. Banks that can achieve high profit growths of above 20% include: BID, MBB, TCB, ACB, TPB, MSB.

Share prices of banks in 2022 are expected to have a strong divergence according to growth rates and specific corporate events.

0.80

1.30

1.80

2.30

2.80

Historical median P/B of top listed banking

stocks

Present:

2,08x

Historical

Average :

1,49x

42,719

52,177

46,916

39,445

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

Q1 Q2 Q3 Q4

Total EBT of listed banks

2019 2020 2021


43


2022 BANKING STOCKS RECOMENDATION

9M.2021 Asset quality Earning trend Recommendation Total asset Equity EBT 9M NIM ROE NPL LLCR

Unit VND Billion VND Billion VND Billion % % % %

BID Average Increasing Buy 1,685,678 86,018 10,733 3.0% 12.0% 2.0% 140.2%

CTG Average Increasing Outperform 1,447,809 95,601 13,911 3.0% 18.0% 2.0% 118.6%

VCB Good Increasing Outperform 1,385,235 109,527 19,311 3.0% 20.0% 1.0% 242.9%

MBB Good Increasing Buy 555,595 58,847 11,885 5.0% 20.0% 1.0% 232.8%

TCB Good Increasing Buy 541,625 88,384 17,098 6.0% 21.0% 1.0% 184.4%

STB Average Sideways Outperform 494,295 33,383 3,249 3.0% 11.0% 2.0% 112.2%

VPB Average Increasing Neutral 479,432 62,322 11,736 8.0% 21.0% 4.0% 48.9%

ACB Good Increasing Outperform 479,309 42,483 8,968 4.0% 25.0% 1.0% 197.7%

SHB Average Increasing Neutral 464,595 28,680 5,055 4.0% 18.0% 2.0% 55.4%

HDB Good Increasing Outperform 346,355 29,270 6,084 4.0% 21.0% 1.0% 80.9%

VIB Good Increasing Neutral 285,035 22,159 5,339 4.0% 28.0% 2.0% 54.1%

TPB Good Increasing Outperform 260,328 24,759 4,394 4.0% 23.0% 1.0% 115.4%

LPB Average Sideways Neutral 254,623 16,157 2,802 3.0% 18.0% 1.0% 98.2%

SSB Decreasing Sideways Sell 197,629 16,035 2,530 2.8% 16.9% 1.7% 73.3%

MSB Good Increasing Buy 195,513 21,289 4,129 3.7% 20.8% 1.9% 62.1%

OCB Average Increasing Buy 167,596 20,425 3,768 3.8% 23.9% 1.5% 75.0%

EIB Decreasing Sideways Sell 162,526 17,645 966 2.2% 5.7% 2.2% 42.8%

NAB No rating No rating No rating 145,477 7,730 1,423 2.9% 22.7% 1.9% 54.8%

ABB No rating No rating No rating 113,876 9,984 1,599 2.8% 17.4% 2.9% 45.6%

BAB No rating No rating No rating 111,351 8,886 702 2.2% 8.6% 0.8% 135.8%

VBB No rating No rating No rating 94,316 5,564 395 1.0% 6.2% 2.6% 41.9%

VAB No rating No rating No rating 83,677 6,119 522 1.6% 9.8% 2.0% 62.5%

NVB No rating No rating No rating 81,102 4,427 206 2.7% 3.3% 1.9% 75.7%

KLB No rating No rating No rating 75,741 4,574 879 2.8% 15.5% 2.0% 48.5%

BVB No rating No rating No rating 65,821 4,698 386 2.3% 8.3% 2.9% 53.2%

PGB No rating No rating No rating 36,793 6,136 272 2.2% 6.2% 2.8% 30.9%

SGB No rating No rating No rating 22,678 3,780 194 2.8% 3.0% 2.0% 38.8%


44


JSC BANK FOR INVESTMENT AND DEVELOPMENT OF

VIETNAM (BID)

Source: SBV, BID, VCBS Research

Overview:

BID is the leading bank in the industry in terms of size and market share, with

good resources and is in the final stage of active restructuring to improve asset

quality and the bank's profit is expected to increase. in the upcoming period.

Shareholder structure:

81% owned by SBV, 15% by Keb Hana Bank, and the rest by other shareholders.

Business results:

9M.2021, BID recorded EBT of VND 10,796 billion (+52.9% yoy). Positive

income growth came from expanding NIM, growing service fees and

accelerating off-balance sheet debt collection, along with reducing pressure on

bad debt provisioning.

45

38%

27%

12%

15%

8%

Loan structure

Big corp

SME

Retail - mortgage

Retail - business

Retail - others

81%

15%

3% 1%

Shareholder structure

SBV

KEB Hana Bank, Co.,Ltd

Foreign funds

Others

2,152

3,396

4,726

2,674

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Q1 Q2 Q3 Q4

EBT BID

2019 2020 2021



46

INVESTMENT THESIS

Strong profit growth in the long-term thanks to improving asset quality: BID has completed provisioning for all VAMC bonds and is expected

to complete provisioning for all bad debts under the Restructuring Project in 2021. Because most of the outstanding bad debts have been written

off, the pressure of provisioning from 2021 onwards will be significantly reduced, helping BID’s profits grow strongly.

Positive credit growth is expected in 2021 when the pandemic is well-controlled and the focus gradually shifts to the retail segment.

Good control of operating costs: CIR ratio is low compared to industry average thanks to the application of technology as well as the support

from strategic investor.

Capital raising roadmap 2021-2023:

- In 2021, BID plans to increase its charter capital through a stock dividend of 25.7% and private placement to foreign shareholders at the rate of

8.5% in 2021-2022.

- In the next 2 years, SBV will reduce its ownership to 65%, foreign room remaining will be about 15%.


VIETNAM (BID)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

NIM

NIM Int generating asset yield Cost of fund

36.2%

35.9%

35.4%

33.4%

42.5%

41.8%

46.6%

40.6%

21.3%

22.3%

18.0%

26.1%

0% 20% 40% 60% 80% 100%

2018

2019

2020

2021F

Total operating expense structure

Operating expense Provision expense EBT

81%

66% 75%

89%

101%

2%

22%

42%

62%

82%

102%

122%

0

5,000

10,000

15,000

20,000

25,000

2017 2018 2019 2020 2021F

VN

D b

illi

on

Provision expense

Provision expense LLCR



FORECAST

53,545 VND

TARGET PRICE

+21% UPSIDE

VND Billion 2020 2021F 2022F

Total operating income 50,037 57,059 63,361

+/- yoy (%) 4.0% 14.0% 11.0%

Earning before tax 9,026 14,881 23,071

+/- % -15.9% 64.9% 55.0%

BVPS (VND/share) 18,998 22,746 24,578

47

VALUATION

P/B Multiple 54,071

Residual Income 53,019


VIETNAM (BID)

30,000

40,000

50,000

60,000

70,000

STOCK PRICE

BID Relative VN-Index


MILITARY COMMERCIAL JOINT STOCK BANK (MBB)

Source: SBV, MBB, VCBS Research

Overview:

MBB is a large-scale commercial joint stock bank with a dynamic

business model, including many subsidiaries operating in the banking

and finance sector. MBB has special advantages thanks to being a

member of the Military bloc.

Shareholder structure:

14% owned by Viettel, 9% by SCIC, 23% by foreign ownership, and

the rest by other shareholders.

Business results:

9M.2021, MBB recorded EBT of VND 11,885 billion (+46.1% yoy).

Total income reached VND 26,818 billion (+36.5% yoy) thanks to good

growth in credit and income from investment activities.

48

14%

9%

7%

7%

4% 3%

55%


Viettel

SCIC

Vietnam Helicopter

Corporation

Saigon New Port

Vietcombank

Viettelimex

4%

36%

11%

48%

Loan structure

M-Credit

Individual

State owned companies

Other companies and

institution

2,554

4,580

3,406

3,898

0

1,000

2,000

3,000

4,000

5,000

Q1 Q2 Q3 Q4

EBT MBB

2019 2020 2021



INVESTMENT THESIS

Credit has room for good growth in the long term: MBB has a capital adequacy ratio (CAR) of 12.4% in Q3.2021 and belongs to the group

of banks with optimal capital adequacy ratio to balance between credit growth and profit target.

The number of customers increases rapidly thanks to effective sales & marketing strategies and with the support of digital banking.

Low cost of fund advantage and abundant liquidity help net profit margin remain high: The advantage of CASA and low interest rate

environment help MBB continue to be among the banks with the lowest cost of fund in the system.

Subsidiaries operating effectively help non-interest income grow strongly.

Operating costs reduce thanks to the application of technology and digitization.

Low provisioning pressure thanks to the early start of bad debt write-off process.

49


5.2% 5.4% 5.1% 5.5% 5.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

NIM

NIM

Int generating asset yield

Cost of fund

2.3 3.0 4.0

5.5 7.4

6.0 6.6

7.6

8.8

10.5

33.5%

37.0%

34.0% 34.6%

36.1%

30%

32%

34%

36%

38%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Mil

lio

n c

ust

om

er

Customer base and CASA

App users Total customers CASA ratio

269 298

324 331 336 28

27

29 29

39

200

250

300

350

400

VN

D b

illi

on

Strong credit growth

Customer loans Corporate bonds



P/B Multiple 37,522


FORECAST

VALUATION

38,571 VND

TARGET PRICE

+33% UPSIDE



+/- yoy (%) 11.0% 25.2% 17.5%


+/- % 6.5% 39.5% 25.3%

BVPS (VND/share) 17,117 15,835 18,761

50


10,000

20,000

30,000

40,000

50,000

STOCK PRICE

MBB Relative VN-Index


Overview:

MSB is a dynamic private bank with medium size, high growth rate,

low deposit cost advantages and strength in interbank activities.


Including 6% owned by VNPT group, 29.2% owned by 7 foreign

funds, the rest are other shareholders..

Business results:

9M.2021, MSB recorded EBT of VND 4,129 billion (+147.8% yoy).

Total income reached VND 7,670 billion (+59.6% yoy) with

impressive growth in interest income and service fees.

51

Source: SBV, MSB, VCBS Research

VIETNAM MARITIME COMMERCIAL JOINT STOCK BANK

(MSB)

48%

26%

26%

Loan structure

Big corp

Individual

SME

857

1,147

1,972

1,009

0

500

1,000

1,500

2,000

Q1 Q2 Q3 Q4

EBT MSB

2019 2020 2021

6%

29%

65%


VNPT

Foreign funds

Others



(MSB)

INVESTMENT THESIS

Growth drivers coming from individual and SME segments.

Rapid growth in credit market share: with 5-year CAGR of 23%. Credit room 2021 is 22%, among the highest in the industry .

NIM is expected to improve by optimizing LDR, penetrating higher yielding segments, and maintaining low cost of fund advantage

from CASA.

Service income increases strongly thanks to bancassurance contract.

Extraordinary income from divestment of subsidiaries: can earn about 1,800-2,000 billion dong in profit from transferring 100% of

shares at FCCOM in 2022.

Focusing on investing in technology infrastructure and digitization to attract new customers and improve operational efficiency.

52

Source: SBV, MSB, VCBS Research

9.5%

8.4% 9.2% 9.2%

8.5%

0%1%2%3%4%5%6%7%8%9%10%

0

10,000

20,000

30,000

40,000

50,000

60,000

VN

D b

illi

on

Individual & SME loans

Individual loans SME loans Yields on customer loans

3.6% 4.1%

3.6% 3.7% 3.9%

0.0%

2.0%

4.0%

6.0%

8.0%

NIM

NIM Int generating asset yield Cost of fund

73 79

89 91 98

4

6

4 2

1

60

70

80

90

100

VN

D b

illi

on

Strong credit growth

Customer loans Corporate bonds


P/B Multiple 33,535


FORECAST

VALUATION

34,461 VND

TARGET PRICE

+32% UPSIDE



+/- yoy (%) 52.3% 54.1% 16.1%


+/- % 95.9% 111.5% 26.1%

BVPS (VND/share) 14,362 14,970 17,496

53

10,000

15,000

20,000

25,000

30,000

STOCK PRICE

MSB Relative VN-IndexSource: SBV, MSB, VCBS Research


(MSB)


VN TECHNOLOGICAL AND COMMERCIAL BANK (TCB)

Overview:

TCB is among the largest private banks. TCB implemented a strategy of

optimizing customer experience from an early age and thus attracted a

large number of customers. That helped reduce the bank's cost of fund.

Shareholder structure :

15% owned by Masan, 13.9% by the family of President Ho Hung Anh,

22.5% by foreign funds and the rest by other shareholders.

Business results:

9M.2021, TCB recorded EBT of 17,098 VND billion (+60% yoy) thanks

to the healthy growth of TOI while CIR decrease and provision expenses

decreased yoy.

5,518 6,018

5,562

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 Q2 Q3 Q4

EBT

2019 2020 2021

15.0%

13.9%

22.5%

44.3%

Share holder structure

Masan Ho Hung Anh familyNguyen Canh Son family Phu Si investing & consultingForeign funds Others

Corp bond

14%

WB

37% SME

16%

Retail

33%

Credit structure

Source: SBV, TCB, VCBS summary

54


INVESTMENT THESIS

High credit growth speed: TCB has CAR of 15.8%, much higher than the requirement of 8% in Circular 41. Therefore, TCB has a

higher credit room than the industry average and we expect TCB's high credit growth rate to be maintained in the future.

Plan to build ecosystem model that keeps cost of fund low in the long term: TCB moves towards an ecosystem model with visible

initial directions such as (1) strengthen investment banking activities ; (2) plan to combine financial services with One Mount Group,

Vinmart and Vinshop; (3) building a new App to increase customer experience;… Retaining old customers and attracting new

customers is a key factor to help TCB maintain a low cost of fund in the long term.

Low provisioning pressure: TCB's NPL ratio and restructured debt ratio are both low as the bank has strongly increased provisioning

in recent quarters. The pandemic situation in Vietnam is also gradually being controlled in major cities after mass vaccination of

people is carried out. Therefore, provisioning pressure in the last quarters of 2021 and 2022 is low.



0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2019 2020 Q3.2021

VN

D T

rill

ion

Credit

Loans to customer Retail

SME Corporate

4.4% 4.5% 4.7%

4.4%

5.6% 5.6% 6.0%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

NIM

NIM

Int generating asset yield

Cost of fund

1.8%

1.3%

1.1%

0.9%

0.6% 0.5%

0.6%

0.00%0.20%0.40%0.60%0.80%1.00%1.20%1.40%1.60%1.80%2.00%

NPL

Net NPL ratio Overdue loan ratio

55


FORECAST

P/B 64,800


64,636 VND

TARGET PRICE

+23% UPSIDE

VALUATION


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

STOCK PRICE

TCB Relative VN-Index



TOI 27,043 35,978 41,487

+/- yoy (%) 28.4% 33.0% 15.3%

EBT 15,800 22,274 26,693

+/- % 23.1% 41.0% 19.8%

BVPS (VND/share) 21,151 26,268 32,400

56

RESIDENTIAL

REAL ESTATE

MACROECONOMY EQUITY MARKET INDUSTRY & STOCK PICKS FIXED INCOME Back 58

Source:VNRea, VCBS

THE MARKET WAS NEARLY FREEZE IN Q3.2021

During the period of strong Covid-19 outbreak and high-level of

distancing measures being implemented, sales activities at

projects were severely affected with low transaction volume and

low level of market interest:

Supply of new products witnessed a record low in Q3.2021,

especially in the southern region when: (1) Construction of

projects was affected by the pandemic and lock-down measures;

(2) Developers actively suspended the sale schedule to wait for

a favorable market period.

▪ People's travel, project review and transactions were limited

due to social distancing measures.

▪ Real estate sold through online channel has not been able to

change the home buying habits of the majority of people.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q3.2020 Q4.2020 Q1.2021 Q2.2021 Q3.2021

0

1,000

2,000

3,000

4,000

5,000

6,000

Q3.2020 Q4.2020 Q1.2021 Q2.2021 Q3.2021

Apartment supply in HCMC (unit) Low-rise products supply in HCMC (unit)

-26%

-16%

-41% -40%

-54%

-62% -70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Hanoi Da Nang HCMC

Apartment Low-rise

The decrease in real estate interest level in some areas in Q3.2021

compared to the previous quarter


Source: CBRE, VCBS

TRANSACTION ACTIVITIES RECOVERED SINCE Q4.2021

▪ Traveling limitation measures are gradually lifted, which helps

people review projects and carry out transactions more easily.

▪ Adjustment in government's anti-Covid strategy is

transitioning to a state of safe coexistence with the pandemic

through improved vaccine coverage and local control.

▪ People's pent-up demand for housing and investment during

the lockdown period increases.

Although transaction activities and projects implementation

progress were stagnant due to the pandemic and lock-down,

housing demand are still enormous, shown by:

Market interest level and real estate transaction activities

rebounded strongly from Q4.2021 :

▪ High absorption rate at projects open for sale.

▪ Price levels continued on the uptrend even during the social

distancing period.

1,542

2,271

1,200

1,400

1,600

1,800

2,000

2,200

2,400

Q1.2020 Q2.2020 Q3.2020 Q4.2020 Q1.2021 Q2.2021 Q3.2021

Hanoi HCMC

Average primary selling price of apartment in Hanoi and HCMC

(USD/m2)

48%

89%

69% 65%

73%

94%

18%

0%

20%

40%

60%

80%

100%

Hanoi HCMC Binh

Duong

Dong Nai Vung Tau Da Nang Quang

Ninh

The increase in real estate interest level in some areas in 10/2021

compared to the previous month


Source: VSA, CBRE, VCBS

EXPECT A NEW SURGE IN PRICE LEVEL IN 2022

▪ Prolonged supply shortage, especially in big cities.

▪ Low saving interest rates promote demand for real estate as an

attractive investment channel.

▪ People's tendency to favor real estate, especially during periods

of inflation.

▪ Large-scale economic stimulus measures and infrastructure

projects were speeded up.

▪ High level of raw materials prices and land cost partly reflects in

real estate prices in 2022.

Real estate price level is forecasted to maintain the uptrend in

2022 thanks to:

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2016 2017 2018 2019 2020 9M.2021

Apartment supply in Hanoi and HCMC (units)

Steal price trend (VND/ kg)

660

200

300

400

500

600

700

800

3.00

4.00

5.00

6.00

7.00

8.00


D.R (1 month) D.R (3 months)

D.R (6 months) D.R (above 12 months)


Source: GSP, World Bank, VCBS

MAINTAIN LONG-TERM POSITIVE OUTLOOK

▪ Favorable demographic environment with: (1) Large population

size and young population structure; (2) A large part of the

population is entering the age of getting married and buying

houses.

▪ The urbanization rate has increased rapidly over the years and

there is still plenty of room for further expansion in the coming

period.

▪ The rapid growth of the middle-income class.

Housing demand and the real estate market maintain a positive

outlook in the coming years:

Urbanization rate of countries in the area

[VALUE] 31%

36% 37% 47% 51%

57% 61%

77%

100%

0%

20%

40%

60%

80%

100%

120%

Increase in Vietnam’s popupation (people)

Unrbanization rate of Vietnam

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

196

1

196

4

196

7

197

0

197

3

197

6

197

9

198

2

198

5

198

8

199

1

199

4

199

7

200

0

200

3

200

6

200

9

201

2

201

5

37.3%

28%

29%

30%

31%

32%

33%

34%

35%

36%

37%

38%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021


Source: Ministry of Transport, VAMA, VCBS

NEW SUPPLY CONTINUES TO CONCENTRATE IN SURBURD AREAS

Suburbs/ satellite cities around big economic centers continues

to concentrate the majority of new supply and possesses great

growth prospects:

▪ Shortage of supply, along with congestion and pollution in

inner cities promote housing demand in periphery areas.

▪ Transportation infrastructures are being completed, narrowing

the distance between suburban areas and inner city areas.

▪ Rapidly increasing car ownership has expanded the radius of

living in urban areas.

▪ Land prices are still low in the suburbs/ satellite cities.

Important transport infrastructure projects being

developed in South East region

Ring Road 4 of Hanoi

Noi Bai – Lao

Cai highway

Starting point

Noi Bai – Ha

Long highway

Ending point

Ha Noi

Hung Yen

Bac Ninh

To Bien Hoa

Route 51

To Binh Duong To Da Lat

Dau Giay – Phan Thiet highway

To Phan

Thiet

Ring Road 4

To Phu My

To Long An To Vung Tau

Ben Luc – Long Thanh highway

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Car sales in Vietnam (unit)


Source: VCBS

Ha Noi Quang Ninh

Hai Phong

Thanh Hoa

Binh Phuoc

Tay Ninh

Long An

Tien Giang

Vung Tau

Đong Nai

GREAT POTENTIAL IN LOCAL REAL ESTATE MARKET

Binh Duong

HCMC

Ecomonic quadrangle in Northern region

Southern key economic zone

The local real estate market in many provinces/ cities is

forecasted to record a boom in the coming years:

▪ Industrial development and FDI attraction promotes economic

development and job opportunities in localities instead of

concentrating in big cities.

▪ The reallocation of labor force and population density (no

longer concentrated so much in Hanoi and Ho Chi Minh City)

was promoted by the Covid-19 pandemic.

▪ Transportation infrastructure and utilities have been strongly

improved in many provinces and cities.

▪ The promulgation of specific development mechanisms for 4

provinces and cities (Hai Phong, Thanh Hoa, Nghe An, Thua

Thien Hue) promotes the trend of more power being given to

local governments, which strengthens flexibility in

infrastructure planning and project development in the area.

Great opportunity for real estate developers:

▪ Prestigious developers possess large land banks in the areas

thanks to market knowledge, support from local authorities and

are likely to accumulate land funds in favorable locations with

low cost.

▪ Developers having been ahead of the development strategy in

the provinces have also accumulated large land banks in the

locality.


Source: VHM, VCBS

OVERVIEW

Vinhomes is the largest residential real estate developer in

Vietnam with a huge land bank of 164 million m2 with

outstanding construction quality and capability to develop

large-scale and high-efficiency projects.

VHM also owns 29 million m2 of industrial real estate and

operates 120.000 m2 of office space for lease.

As a member of Vingroup, VHM enjoys many advantages

from Vingroup's ecosystem in the long term.

BUSINESS RESULTS 9M.2021

In 9M.2021, net revenue reached VND 61.681 billion,

increased 24.9% over the same period. Revenue in Q3

did not decrease much compared to the same period last

year thanks to: (1) Continuing to record revenue from

block sale transactions; (2) The delivery and revenue

recognition for previously sold products are not affected

much.

NPAT was VND 27.244 billion (+58,3% yoy). Gross

profit margin increased strongly in Q3.2021 and

reached 66% due to: (1) Block sale transactions (with

higher gross margin than retail) accounted for a high

proportion of revenue; (2) During the period many low-rise

products with high profit margin were handed over.

VINHOMES JOINT STOCK COMPANY - VHM

Business results of VHM (VND billion)

49,378

61,681

18,488

34,309

17,208

27,245

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

9M.2020 9M.2021

Revenue Gross profit NPAT

Gross profit margin of VHM

45.2%

39.2%

34.4% 33.9%

47.8% 50.0%

66.0%

20%

30%

40%

50%

60%

70%

Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Q3/2021


Source: VHM, VCBS

Sales progress at mega-city projects is promoted through block sale

transactions: the negotiation process for block sale transactions for 3 mega-

cities Vinhomes Grand Park, Ocean Park and Smart City is entering the final

stage, expected to significantly help VHM complete the transfer of the above

projects in the period of 2022 - 2023.

The new mega-city projects Dream City, Wonder Park and Vinhomes Co

Loa will be deployed from 2022 and will benefit from the strong upward

trend of land prices in the region, expected to contribute greatly to VHM's

revenue and profit prospects in at least the next 3 years.


Retail sales in VHM’s real estate projects

recovered strongly after the lock down period.

From Q4.2021, VHM has witnessed a dramatically

improvement in retail projects with sales in the first

few weeks of October reaching 40% of the sales in

the whole of Q3.

Mega cities expected to be opened for sale

Vinhomes

Wonder Park

Vinhomes

Dream City

Vinhomes Co

Loa

Location Dan Phuong,

Hanoi

Van Giang,

Hung Yen

Dong Anh,

Hanoi

Area (ha) 133 460 385

Investment capital

(VND billion) N/A 33,000 42,215

Popupation (people) 12,248 65,000 38,100

80,900

92,100

105,000

118,550

132,400

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Q1.2021 Q2.2021 Q3.2021 Q4.2021 F 2022 F

Number of products delivered in 3 mega-cities Grand Park,

Ocean Park and Smart City


(unit: VND billion) 2020 2021F 2022F

Revenue 71,547 86,563 96,670

+/- yoy (%) 38.58% 20.99% 11.68%

NPAT 28,206 39,469 38,264

+/- % 15.99% 39.93% -3.05%

EPS (VND/ share) 8,315 9,064 8,787

FORECAST STOCK PRICE

106,841 VND

TARGET PRICE

+32% UPSIDE


RNAV Method 106,841

VALUATION

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

VHM Relative VN Index


An Gia Real Estate Investment & Development JSC (AGG) – Overview

67

CORE BUSINESS

AGG is a professional real estate developer mainly located

in HCMC. The product is apartments in the affordable and

mid-end segments with a moderate project size and diverse

area. Some outstanding projects have been implemented by the

company: River City, River Panorama, Sky89, The Wave, The

Standard Binh Duong, Westgate...

9M 2021 BUSINESS RESULTS

9M2021, AGG achieved net revenue of VND 687 billion (8

times higher than the same period)). Net Income– MI reached

VND 205 billion (+3% yoy) due to a sharp increase in SG&A

expenses over the same period. With this result, AGG has

completed 19% and 41% of the revenue and profit plan for

2021 respectively

Customer paying in advance grew well to VND 3,337 billion

(+30.7% ytd) accounting for 28% of total resources. D/E is

0.96x which is safe level

Sources: AGG, VCBS summarized

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

2016A 2017A 2018A 2019A 2020A 2021F 2022F 2023F 2024F 2025F

ROE ROA Gross margin Net margin

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

1,000

2,000

3,000

4,000

5,000

6,000

2016A 2017A 2018A 2019A 2020A 2021F 2022F 2023F

Net sales Net income-MI Net profit margin


An Gia Real Estate Investment & Development JSC (AGG) – Outlook

68

INVESTMENT THESIS

In the period of 2022-2024, the company is capable of launching

from 9,000-12,000 products

Total expected revenue of 3 projects The Wave, West Gate and

Standard BD is likely to collect nearly VND 12,500 billion

AGG maintains a healthy structure with a Debt/Equity ratio around

the 1-time mark. The company has a transparent and clear legal

framework

STRATEGY

• With a clean land fund mainly concentrated in Ho Chi Minh City,

AGG will continue to cooperate with experienced partners and

industry resources to anticipate trends in housing demand moving to

suburban areas such as Binh Duong, Dong Nai, Long An…

RISKS

• COVID-19 may cause delays in project implementation, sale and

handover

• The price of construction materials increased sharply, the land price

increased sharply will have negatively affecting business results

7.128 3.693

4.100 4.300

1.987 1.222 1.623

3.240 4.661

Source: VCBS summarized

Project Area (ha) Location Total

investment

Handover

timeline 2021 2022 2023 2024 2025 2026

RVP 1,2 6 District 7, HCM 1.687 2020

Sky 89 6 District 7, HCM 831 2021

The Song 1 Vung Tau City 2.790 2022

The standard 7 District Tan Uyen, Binh Duong 1.077 2022

Westgate 3 District Bình Chanh - HCM 3.611 2023-2024

BC27 26 District Bình Chanh - HCM 12.675 2026-2027

The A 6 District 7, HCM 1.050 2025

D7 project 5 District 7, HCM 7.919 2026-2027

The Gio 3 Binh Duong province 4.000 2024-2025

Total 64


An Gia Real Estate Investment & Development JSC (AGG) – Valuation

69

VALUATION

RNAV Method 60,400 60,400/CP

TARGET PRICE

+35% UPSIDE

FORECAST

(Unit: VND bns) 2020 2021F 2022F 2023F

Net Sales 1,754 1,313 5,678 5,037

+/- yoy (%) +355.9% -25.1% +332.4% -11.3%

Net income- MI 415 466 349 479

+/- % +27% +12% -25% 37%

EPS (VND per share) 5,027 2,403 1,498 1,891

4/13/2020 10/13/2020 4/13/2021 10/13/2021

Stock price fluctuation

AGG VN VNindex

Source: VCBS forecast

INDUSTRIAL PARK

SECTOR


INDUSTRIAL PARK SECTOR: LONG-TERM GROWTH FUNCTION

71

Experiencing 3 waves of Covid 19 and we are still in the 4th wave of Vietnam. The industrial real estate industry is taking benefit but this industry

is not completely "immune" to the Covid-19 Pandemic. The long-term outlook of the industry will depend on the following function:

Covid 19 infection control

Infrastructure improvement

Sector planning, policies

Production shifting, FDI

Demand of customers

Good infrastructure connection is

one of the most important

conditions, it affects investment

costs, product rental prices....

Infrastructure is being rapidly built

thanks to public investment,

planning work, newly promulgated

mechanisms, mobilizing other

social resources...

It is a factor that has an

overarching effect on other

factors. Besides, it changes the

actual needs of customers and

the business results of

enterprises in the industry

Development orientation and

creating business environment

for enterprises. Policies in

general are still supporting the

development of the real estate

industry

Changing towards more

carefully in decision-making

due to the great impact of the

Covid 19 Pandemic. Focusing

on safety, cost, processing of

requests more than before the

Pandemic…

The outbreak of Covid 19

created a push and shifting

production from a "labour-

intensive" country to Vietnam

thanks to its good location and

some unique "comparative

advantages".


INDUSTRIAL REAL ESTATE: NATIONAL INDUSTRY CHANGES

72

According to data from the Ministry of Planning and Investment, as of September 2021, Vietnam has a total of 397 industrial zones

established, 291 IPs put into operation with total area of 87.100 ha, of which industrial land area is 58.700 ha (accounting for 67%). There are 106

Ips in construction with industrial land of 23.800 ha. the leased area is 43.300 ha (+400 ha, (the occupancy rate is 70,9% compared to 75% in 30th

June 2021)

300

335 394 397

-

100

200

300

400

-

20,000

40,000

60,000

80,000

Total available land lease Total industrial park of Vietnam

CAGR +2%

CAGR+12

%

58%

16%

7%

19%

54%

9%

23%

14%

Processing and manufacturing industry

Real Estate

FDI by sectors

Inside circle: 2010-

2020

Outside: 10M 2021

9,970

32,260 30,830

2,180

24,770

14,980

-

10,000

20,000

30,000

40,000

50,000

Northern

midland and

mountainous

region

Red river

delta

North

Central +

Central Coast

Highlands South East East Mekong

Delta

Land use planning by regions 2021-2030

Difference

Sourrce: TMoP&I, VCBS summaried

64% 59% 57%

73%

50%

70% 67% 64%

0%

30%

60%

90%

0

20

40

2015 2016 2017 2018 2019 2020 10T202010T2021

FDI registerd FDI disbursement % FDI disbursement


INDUSTRIAL REAL ESTATE: CHANGES BY REGIONS

73

Updates on the general situation, supply and demand, prices of the industry: The rising in rental prices was a result of increasing in

demand and limited supply.

Southern region: According to JLL, the market did not record new supply in IPs and Ready-built factory (RBF) in the third quarter of

2021. The total supply of industrial land is maintained at 25,220 hectares. In the South, the rental price of industrial zones still maintained

an upward momentum and reached an average of 114 USD/m2/cycle (+7.3% YoY), the price of Ready built factory (RBF) was stable due

to abundant supply at 4.5 USD/m2/ month (+1.4% YoY). The occupancy rate of IPs and RBF is maintained at 85% and 87%, respectively

Northern region: The northern market was more active, recording new supply in Pho Noi A IP expand and Yen Phong 2C Industrial Park

(completed 70% clearance + basic construction). Accordingly, the supply of the whole Northern region increased to 9,900 ha of industrial

land and 2.1 million m2 of RBF (additional from Nam Dinh Vu Industrial Park). Industrial land rental price reached a new peak of 108

USD/m2/lease cycle (+6.1 % yoy), RBF also continued to record an increase of 4.7% to 4.5 USD/m2/month. The occupancy rate of

temporary IPs decreased to 72% and RBF reached 89%

Soures: JLL, Cushman, Savills, CBRE, VCBS summarized

85% 95%

84% 90% 95%

66%

89%

62%

55%

0%

20%

40%

60%

80%

100%

120%

-

2,000

4,000

6,000

8,000

10,000

12,000

HCMCHa Noi Dong

Nai

Binh

Duong

Binh

Phuoc

Ba

Ria-

Vung

Tau

Long

An

Hai

Phong

Bac

Ninh

Total supply Occupancy rate

180

125 100

70 90

175

60 80 75

300

245

150

200

125

250

100 125

90

TPHCM Long An Binh

Duong

Dong Nai Bac Ninh Ha Noi Hai

Duong

Hai

Phong

Hung Yen

Rental price in Q3 2021

(USD/m2/rental cycle)

Highest rental price Lowest rental price


BUSINESSES OUTLOOK

74

We offer 4 criteria for selecting businesses with long-term prospects: (1) Favorable geographical location (2) Having projects that will be approved

in the near future (3) Healthy financial structure (4) Good products and services

Financial rations table of enterprises in the industry Sources: FiinPro, VCBS summarized

Ticker Company Net income growth

(9M2021) ROE trailing

Cash payout

ratio Diluted P/E P/B

EBITDA/(Short

-term

debt+Loan

interest)

D/E

LHG Long Hau IP 102% 25% 0.14 7.61 1.78 8.99 0.14

SZC Sonadezi Chau Duc 57% 21% 0.17 20.41 4.08 1.26 1.58

TIP Tin Nghia IP 10% 22% 0.47 9.39 2.10 0.00 0.00

TID Tin Nghia Corporation 233% 7% 0.40 52.29 6.48 0.47 1.11

BCM Becamex IDC -17% 11% 0.14 34.78 4.02 0.41 1.01

GVR Vietnam Rubber

Corporation 75% 10% 0.83 29.06 3.24 3.65 0.18

PHR Phuoc Hoa Rubber -56% 21% 0.14 15.36 3.34 10.48 0.11

NTC Nam Tan Uyen IP -11% 33% 0.03 18.88 6.45 0.59 0.25

MH3 Binh Long Rubber

Industrial Park -23% 25% 0.33 12.32 3.16 0.00 0.00

KBC Kinh Bac Urban

Corporation 1803% 6% 0.79 28.75 1.86 0.90 0.48

ITA Tan Tao Investment -6% 2% 0.01 70.01 1.05 4.20 0.02

IDC IDICO 112% 12% 0.41 45.93 6.13 1.16 0.61

SIP Saigon VRG 8% 35% 0.72 13.81 5.35 3.47 0.09

IDV Vinh Phuc Infrastructure -2% 32% 0.21 9.04 2.71 7.30 0.05

DTD Investment and

Development Thanh Dat 5% 17% 0.06 12.23 2.64 5.04 0.14

VGC Viglacera Corporation 61% 13% 0.17 25.92 3.53 1.63 0.29

DPR Dong Phu Rubber 19% 8% 0.71 17.88 1.92 20.23 0.03

TRC Tay Ninh Rubber 29% 7% 0.66 12.96 0.87 2.86 0.17

D2D Urban Development No. 2 5% 27% 0.11 7.04 1.85 0.00 0.00

SZL Sonadezi Long Thanh 4% 19% 0.91 11.39 2.13 36.83 0.03

Average

18%

0.37

22.75

3.23

5.47

0.31


TIN NGHIA IP DEVELOPMENT JOINT STOCK (TIP-HOSE)- OVERVIEW

75

CORE BUSINESS

TIP is a long-time industrial park investor in Dong Nai province, TIP is

operating Tam Phuoc Industrial Park with an area of 325.01 hectares which has

100% occupied.

Main products and services include: (1) land, industrial park infrastructure (2)

residential real estate (3) Kios rental, market business, waste collection


9M 2021, net revenue is 185 billion dong (+28% yoy), gross profit is VND

129 billion (+32% yoy) and NI-MI is VND 65.7 billion (+10.2% yoy). In

which, revenue from main segments such as industrial zone land lease,

wastewater fee, land use right transfer of Tin Khai (subsidiary)

At the end of the third quarter of 2021, the remaining long-term unrealized

revenue is VND 168 billion, the company does not borrow from banks.

Investment balance in joint ventures and associates is nearly 336 billion VND.

They have a healthy financial position with the proportion of cash and cash

equivalents + short-term investment accounting for nearly 20% of total assets

Sources: TIP, VCBS summarized

7% 5% 3% 5% 5%

10%

36% 38% 38% 38% 7%

5% 4% 15% 4%

18%

16% 17% 11%

12% 20%

18% 15% 16%

17%

23% 10% 7% 13%

20%

2018A 2019A 2020A 6T2021 9T2021

Fixed assets & CIP Long-term invesment Other assets

Receivables Inventories Cash & ST investments

Sources: TIP, VCBS summarized

190 197

217

145

185

76

106

132

98

129

56

92 87

60 66

2018 2019 2020 9T2020 9T2021

Net sales Gross profit Net income-MI

Unit: VND bns


TIN NGHIA IP DEVELOPMENT JOINT STOCK (TIP-HOSE)- OUTLOOK

76

BUSINESS OUTLOOK

Industrial zone segment: Highway 25 project is expected to be approved (located in Thong Nhat district, Dong Nai province, with a total

area of 249.19 hectares of natural land). In addition, the company will participate in the bidding process of the Long Duc 3 Industrial Park

Project (Long Thanh District, Dong Nai Province) with an area of 293.9 hectares. The Tam Phuoc IP maintain VND 50 billion in revenue, the

Long Khanh IP brings in more than VND 10 billion cash dividend each year

Residential real estate segment: Thanh Phu KDC project has 586 plots of land, equivalent to 56,779 m2 which have not been transferred.

The Long Mountain Project (Paradise Riverside, Phuoc Tan Commune, Bien Hoa City) still has great potential for implementation with a

commercial area of 19.2 hectares (6,774 products).

Other segments: other segments are bringing stable cash flow except for coffee segment

RISKS

Risk of Covid 19 disease: The prolonged Covid pandemic affects all industries, in which the industrial real estate industry is not immune.

The prolonged epidemic caused a delay in the approval of the project policy and the higher risk of infection to industrial zones

Risk of rising raw material prices: it affects total investment, thereby affecting product prices in case selling prices do not keep up.

Legal risks: The lengthy process of policy approval, bidding and other legal types can change the company's financial position in a more

unfavorable direction.


TIN NGHIA IP DEVELOPMENT JOINT STOCK (TIP-HOSE)- VALUATION

77

VALUATION

P/E, P/B Method 44,535 40%

DCF, RNAV Method 44,219 60%

44,346

TARGET PRICE

+29% UPSIDE

FORECAST

(Đơn vị: tỷ đồng) 2020 2021F 2022F

Net sales 261 248 217

+/- yoy (%) 20% -5% -12%

Net income- Minority interest 135 140 120

+/- % 56% 4% -14%

EPS (VND per share) 5,196 2,152 1,846

Source: VCBS forecasted

(80)

(60)

(40)

(20)

-

20

40

60

80

100


TIP VN-Index

Note: The closing price of the stock after the issue is VND34,840/share


NAM TAM UYEN INDUSTRIAL PARK JSC (NTC-HOSE)- Overview

78

CORE BUSINESS

Nam Tan Uyen (NTC) is a member of the Vietnam Rubber

Industry Group and the investor of the Nam Tan Uyen Industrial Park

with a total area of 2 phases more than 620 hectares (100% filled).

Currently, NTC is continuing to apply for a license to deploy Nam Tan

Uyen Industrial Park to expand phase 2 with an area of 346 hectares,

bringing the total area of exploitation and operation to 1,066 hectares.

Products: (1) leasing land and infrastructure of industrial zones (2)

residential areas (land plots) (3) leasing factories (4) other activities

associated with industrial zones


9M2021, NTC achieved revenue of VND 165 billion (-15% yoy),

Gross profit reached VND 111 billion (-21% yoy) and NI-MI reached

VND 212 billion (-11% yoy) – completing 68% of the total target

revenue and 94% of the target NPAT of 2021

The one-time cumulative rental price of NTC 1 is currently 47.49

USD/m2, NTC 2 is 47.85 USD/m2. Service land ranges from 150-195

USD/m2 for 2.07 ha for lease in 2020

Sources: NTC, VCBS summaried

4%

15%

27%

97%

1.00

0.26

2015 2016 2017 2018 2019 2020 2021F

ROA ROE D/E

Sources: NTC, VCBS summaried

47%

89% 98%

88%

122% 110%

123% 129%

0%

50%

100%

150%

-

200,000

400,000

600,000

2015 2016 2017 2018 2019 2020 9T20209T2021

Unit: VND millions

Net sale Gross profit Net profit Net profit margin


NAM TAM UYEN INDUSTRIAL PARK JSC (NTC-HOSE)- Outlook

79

INVESTMENT THESIS

The growth engine in the next 5 years will come from NTC Industrial Park expanding phase 2 with a commercial area

of 259 hectares. Expected rental price is in the range of 110-150 USD/m2/cycle

NTC2 residential area with an area of 19.5 hectares has been approved for 1/500 planning and is in the process of applying for a

policy

Revenues from 2 existing IPs remain stable

Good cash dividend in 2021 at 8,000 VND/share

The company plans to move the exchange to HOSE and divest from GVR and its members

INVESTMENT RISKS

Slow progress of land allocation: The application for land lease has been submitted to the Department of Natural Resources and

Environment since September 4, 2020 but has not been approved so far. In the context of the remaining land for lease is no longer

available. The delay in land allocation will affect NTC's business result

Covid19 epidemic: the outbreak may affect the investment attraction of NTC


NAM TAM UYEN INDUSTRIAL PARK JSC (NTC-HOSE)- Valuation

80

VALUATION

DCF Method 350,646 30%

RNAV Method

280,005 70%

301,197/CP

TARGET PRICE

+56% UPSIDE

FORECAST

(Unit VND bns) 2021F 2022F 2023F

Net sales 216 1,059 1,991

+/- yoy (%) -18% 390% 88%

Net income - MI 276 635 1,056

+/- % -5% +130% 66%

EPS (VND/share) 11,502 26,449 43,980


1/15/2019 7/15/2019 1/15/2020 7/15/2020 1/15/2021 7/15/2021


NTC VNINDEX

CONSTRUCTION

MATERIALS


DOMESTIC OUTLOOK

82

Public investment continues to boost domestic consumption

- Planned public investment capital in 2020 and 2021 reached a record high

of 542 billion VND and 585 billion VND (55.8% higher than the average

of 2017-2019 periods). However, disbursement progress slowed down in

Q3/2021 due to the social distancing enforcement. As a result, we expect

construction industry to recover quickly after the restriction eases.

Construction progress recovery

- The social distancing measure in Q2 and Q3 has disrupted real estate

projects. We expects that from Q4/2021 when the policy has been

loosened, real estate developers will speed up their process which promotes

material consumption demand.

308

400 377

542 585

0%

10%

20%

30%

40%

50%

60%

-

100

200

300

400

500

600

700

2017 2018 2019 2020 2021

Disbursement of public investment 9M.2021

Kế hoạch giải ngân cả năm (tỷ đồng) Tỷ lệ giải ngân 9T (%)

-

10,000

20,000

30,000

40,000

50,000

2019 2020 2021F 2022F 2023F

Hanoi’s apartment supply

-

10,000

20,000

30,000

40,000

2019 2020 2021F 2022F 2023F

HCMC’s apartment supply

Sources: Savills, VCBS

Sources: MPI, VCBS


EXPORT PROSPECTS

83

-40%

-20%

0%

20%

40%

60%

80%

-

100

200

300

400

500

600

700

800

900

Cement production in China

Daily Ouput (10.000 tons) Growth rate (%)

-20%

-10%

0%

10%

20%

30%

-

50

100

150

200

250

300

350

400

450

Steel production in China

Daily Output (10.000 tons) Growth rate (%)

Sources: Bloomberg, VCBS

Vietnamese competitive advantage in producing building materials

has been strengthened as China is shifting their focus on environment.

- China's economic development strategy shifts the focus to high-tech and

environmentally friendly products. China has limited the approval for new

construction material factories, closing environmentally unqualified factories.

This led to shortage supply in building materials, raising the price of basic

metal worldwide. According to China's 14th Five-Year Plan (2021-2025), it is

expected to cut energy consumption/GDP by 13.5% and CO2 emissions/GDP

by 18%.

-3%

-8%

-14%

-18% -21% -22%

-26% -26%

-34% -37%

-44%

-52%

-60%

-50%

-40%

-30%

-20%

-10%

0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020 2025P

China reduction of CO2 emissions per unit of GDP

(Base year 2005)

Sources: China Five-year Plan, VCBS


DOWNTREND RISK IN REAL ESTATE MARKET

84

China's real estate market is slowing down

- From August 2020, China imposes credit limit management based on

three criteria which commonly known as "three red lines". Credit

growth will limit the ability to refinancing of property developers.

- The Evergrande event has affected the Chinese real estate market,

decelerating the growth of this market, as well as, reducing the

demand for construction materials and causing the prices of many

building materials to go down.

-60-40-20020406080100120140160

-8-6-4-202468

101214

No

v-1

1

May

-12

No

v-1

2

May

-13

No

v-1

3

May

-14

No

v-1

4

May

-15

No

v-1

5

May

-16

No

v-1

6

May

-17

No

v-1

7

May

-18

No

v-1

8

May

-19

No

v-1

9

May

-20

No

v-2

0

May

-21

Bu

ild

ing

Flo

ors

(y

oy

)

Pri

ces

(yo

y)

China real estate market

Newly Built Commercial Residential Buildings Prices (yoy)

Sales of Building Floors (yoy)

Sources: UBS, VCBS

Regulations on credit growth limit based on 3

criteria in China

Credit limit of Vietnam real estate market

- The State Bank of Vietnam (SBV) has just issued Circular 16 in

November 2021, restricting credit institutions from purchasing corporate

bonds which are serving the purpose of restructure debts of the issuing

companies. This is showing a signal that the SBV will limit the capital

inflow into the real estate market. Especially after banks are gradually

reducing lending in the real estate sector (due to complying with Basel II

and applying a high risk coefficient to real estate).

Sources: Bloomberg, VCBS


STEEL SECTOR

85

Strong growth in steel consumption

In the first 10 months of 2021, steel consumption reached 22.7 million tons

(+23.0% yoy) with growth drivers coming from both domestic (+10.9% yoy)

and export (+72.4% yoy). This is attributable to the advantage of production

cost in the Vietnamese market and lower steel production worldwide.

Steel price have leveled off

Due to interruptions in global steel supply, steel prices have been sharply rising

since the beginning of the year. Steel prices have stayed stable at $660/ton for

bar steel and $900/ton for HRC steel, following a modest decrease since May

2021. From the peak, domestic steel prices tend to trend sideways.

Sources: LME, VCBS Sources : VSA, VCBS

Sources: VSA, VCBS

107

445

660

0

100

200

300

400

500

600

700

800

Steel price vs input material

Quặng sắt Than cốc Thép thanh

16.7

15.3

8.0 9.0

10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0

Jan

-19

Mar

-19

May

-19

Jul-

19

Sep

-19

No

v-1

9

Jan

-20

Mar

-20

May

-20

Jul-

20

Sep

-20

No

v-2

0

Jan

-21

Mar

-21

May

-21

Jul-

21

Sep

-21

Steel price

Việt Nam Trung Quốc

3.8 4.8 4.6 4.6 3.6 6.3

14.3

17.1 18.6 18.7

14.8

16.4

-

5.0

10.0

15.0

20.0

25.0

2017 2018 2019 2020 10.2020 10.2021

Vietnam steel consumption

Exports Inland

Iron ore Coal Steel bar Vietnam China


WOOD & CEMENT SECTOR

86

Wood sector - Continue to maintain export growth

- In the first 10 months of 2021, the export value of wood products in

Vietnam reached 9.1 million USD (+21.2% yoy). However, due to the

COVID-19 and the requirements of social distancing along with the

increase in transportation cost, production of wood factories has been

partially delayed. As a result, wood export growth in Q3/2021 was

negative.

- We expect that the high vaccination rate will boost export growth at the

end of the year. Especially when Vietnam gradually replaces China in

exporting to the US.

Sources: VN Customs, VCBS

5.8 6.3

7.6

9.5

7.5

9.1

0%

5%

10%

15%

20%

25%

30%

-

2.0

4.0

6.0

8.0

10.0

2017 2018 2019 2020 10.2020 10.2021

Wood product exports

Value (mil USD) Growth YoY (%)

Cement sector - Slightly growth

- Cement consumption exceeded 77.5 million tons (+3.5% yoy) in the

first 10 months of 2021, growth of which was driven by exports to China

(+19.0% yoy). The domestic market remained oversupply as many

domestic cement factories come into operation from Q4.2021.

- Clinker is Vietnam's main export commodity to China (with a poor

profit margin). At the same time, with the steep rise in coal prices (which

account for 40% of cement manufacturing costs), the selling price is

under intense competition. leading cement manufacturing companies to

record loss in Q3.2021

Sources: MOIT, VCBS

59 60 69 65

86

46 46

5 5

9 11

15

10 11

10 16

23 23

24

18 21

0%

20%

40%

60%

80%

100%

120%

-

20

40

60

80

100

120

140

2016 2017 2018 2019 2020 9T.2020 9T.2021

Uti

liza

tio

n r

ate

(%)

Mil

lio

n t

ons

Cement consumption in Vietnam

Inland Cement Export Clinker Export Utilization rate (%)


VIGLACERA CORPORATION JSC (HOSE: VGC)

87

BUSINESS ACTIVITIES

VGC operates in two main business lines: (1) building materials

(including tiles, tiles, porcelain, showers, faucets, glass, and

mirrors) and (2) industrial real estate.

OWNERSHIP STRUCTURE

Start at Q2/2021, the company's major shareholder group, Gelex

(HOSE: GEX) holds major controlling stake in the company with

an ownership rate of 50.2% and will consolidated the financial

statements of VGC into GEX from Q2/2021. The Chairman of

both GEX and VGC is Mr. Nguyen Van Tuan. The state

shareholder, the Ministry of Construction, currently holds 36% of

the company's shares.

BUSINESS RESULTS

In the first 9 months of 2021, VGC’s net revenue reached

VND7,508 billion (62.6% business plan, +5.9% yoy) and PBT

reached VND1,043 billion (104.3% business plan, +50.7% yoy)

- The industrial park real estate segment is the main contributor

to the company's revenue and profit in 2021.

- The construction materials segment is affected by the strong

impact of social distancing, causing consumption to decline. The

company still operated in time the Phu My floating glass factory,

bringing positive results to the glass and mirror segment.

Sources: VGC, VCBS

1,550 2,689 2,405

1,682 2,585

7,263

7,457 7,028

5,406 4,923

20%

22%

24%

26%

28%

30%

-

2,000

4,000

6,000

8,000

10,000

12,000

2018 2019 2020 9T.2020 9T.2021

Bil

lio

n V

ND

VGC Business Results

Bất động sản Vật liệu xây dựng Biên LNG (%)Industrial parks Construction materials GPM (%)

611

77 196

451

280

982

141 209

333

193

Industrial

Parks

Glass Sanitary wares,

faucets

Tiles Bricks tiles,

baked clay

Gross profit breakdown 9M.2021

9T.2020 9T.2021


VIGLACERA CORPORATION JSC (HOSE: VGC)

88

INVESTMENT CATALYST

- Industrial zone real estate: in 2021, VGC has completed land

clearance for many of its industrial parks. In 2022, VGC will

deploys Thuan Thanh Industrial Park with 250ha. The shift of

supply chain from China to Vietnam will lead to more business

leased Industrial Parks. For instance, Yen Phong IPs recently

have been loaded by some FDI semiconductor material

producers.

- Construction materials segment: The domestic market

recovery in tandem with the real estates market. In addition,

China is subject to a high tax rate in the US market in 2020

(>350%). This creates opportunities for other countries to enter

US market (VN export to US has increased by 40% yoy in 10

month 2021).

In addition, Phu My glass factory commencement also helps

increase revenue and profit of this segment.

RISKS

- Risk of COVID-19

- Risk of slowing down of real estate market

- Risk of China transferring the price of ceramic tiles to Vietnam

Name Location Area (ha) Leased area (ha) Clearance rate

2021

Occupancy rate

2022F

Tien Son Bac Ninh 332 256 100% 100%

Yen Phong 1 Bac Ninh 345 270 100% 100%

Yen Phong Ex Bac Ninh 314 213 100% 75%

Yen Phong II C Bac Ninh 221 141 85% 39%

Hai Yen Quang Ninh 193 120 54% 54%

Dong Van Ha Nam 300 228 100% 68%

Phu Ha Phu Tho 356 258 80% 50%

Dong Mai Quang Ninh 168 112 100% 100%

Tien Hai Thai Binh 466 330 40% 60%

Phong Điem Hue 284 77 74% 58%

Yen My Hung Yen 280 204 26% 26%

Thuan Thanh Bac Ninh 250 177 0% 11%

Viglacera’s Industrial Park Forecast

29% 31% 32% 21%

34% 36% 36% 43%

50%

28% 24% 25% 27%

29%

8% 9% 8% 9% 21%

0%

20%

40%

60%

80%

100%

2016 2017 2018 2019 2020

United States ceramic tiles imports market share

China Europe continent (Spain, Italy, Turkey)

America continent (Mexico, Brazil) Vietnam

Others

Sources: VGC, VCBS forecast

Sources: US Commerce Department, VCBS


VGC – FORECAST & VALUATION

89

70,418 VND

TARGET PRICE

+ 30.6% UPSIDE

STOCK PRICE MOVEMENT VGC & VN-INDEX

FCFF Method: 70,418

VALUATION

VND Billion 2021F 2022F 2023F

Net revenue 10,611 11,821 12,435

+/- yoy (%) 12.5% 11.4% 5.2%

Net income 1,433 1,747 1,789

+/- % 114.7% 22.0% 2.4%

EPS (VND/share) 3,050 3,727 3,811

0

200

400

600

800

1,000

1,200

1,400

1,600

0

10,000

20,000

30,000

40,000

50,000

60,000

VN

-In

dex

VG

C

VGC VN-Index

FORECAST


VICOSTONE JSC (HNX: VCS)

90

BUSINESS ACTIVITIES

VCS mainly operates in the field of exporting artificial quartz stone

with the main export market being the US. The company is the top 3

manufacturers of high-grade quartz stone in the world.

OWNERSHIP STRUCTURE

The largest shareholder of the company holding the controlling

power is Mr. Ho Xuan Nang with direct ownership of 3.74% and

indirectly through JSC Green Phoenix A&A Group owns 84.15%. W

We can see a concentration in management's ownership at VCS.

BUSINESS UPDATES

In 9M/2021, VCS's net revenue reached VND5,206 billion (+30.2%

yoy) and EBT reached VND 1,541 billion (+35.3% yoy) and

completed the business plan with 76.6% revenue and 80.3% PBT

respectively. The growth of VCS was driven by the recovery of the

US market. Especially, the demand for housing in the US increased

sharply again, exceeding the supply of material, especially the trend

of working from home leading to a sharp increase in demand for

refurbishment, aiding businesses to impressively perform in

9M/2021. At the same time, the ASP in the US market also increased

sharply and Vicostone also increased the stone selling price by 20%

YTD, but still lower than the average increase of stone exporters in

the industry.

Sources: VCS, VCBS

A&A GREEN

PHOENIX

GROUP 84%

Ho Xuan Nang

4% Others

12%

OWNERSHIP STRUCTURE

32%

33%

33%

34%

34%

35%

35%

-

1,000

2,000

3,000

4,000

5,000

6,000

2018 2019 2020 9T.2020 9T.2021

Bil

lio

n V

ND

VCS Business Results

Net revenue Net profit GPM


VICOSTONE JSC (HNX: VCS)

91

INVESTMENT CATALYST

- New product development: In 2021, Vicostone has launched a new

ultrathin stone product with a thickness of only 5mm. Thanks to the thin

and light specification, VCS's new product can participate in the interior

design of the ceramic tile market segment. The counter-top market in the

US has an estimated value of 30 billion USD, while the market for

ceramic tiles is worth up to 345 billion USD in 2019.

- Increasing export market share: In 2020, the US market has imposed

anti-dumping and anti-subsidy tax on artificial stone products from China

(297%-337% from July 1st). 2019), India (3.19%-5.15% from June 2020)

and Turkey (5.17% from June 2020), are Vietnam's main competitors

when exporting to this market.

- Expanding capacity and mastering the value chain: The company's

overall capacity has been expanded to 3 million m2/year (+500,000

m2/year) by 2020. The business also aims to invest at least two more lines

between 2020 and 2024 to assist expand capacity to 5 million m2/year.

VCS will also be self-sufficient in raw materials with (1) Quartz and

Cristobalite from the transfer of 100% Phenikaa Hue factory group. (2)

Polyester resin when Phenikaa also put into operation the chemical plant.

RISKS

- Risk of COVID-19

- Competitor risk

- The risk of the US imposing tariffs

-

200

400

600

800

1,000

1,200

1,400

Brazil India China Italy Turkey Spain Vietnam

Mil

lio

n U

SD

United States import market

2016 2017 2018 2019 2020

-

200

400

600

800

1,000

2009 2014 2019 2024 2029

Mil

liio

n S

QF

T

Counter-top demand in US

Laminate Granite Marble Engineered stone Cast polymer Tiles

Sources: Freedonia, VCBS

Sources: US Commerce Department, VCBS


VCS – FORECAST & VALUATION

92

157,995 VND

TARGET PRICE

+31.6% UPSIDE

STOCK PRICE MOVEMENT VCS & VN-INDEX

VND Billion 2021F 2022F 2023F

Net revenue 7,381 8,489 9,773

+/- yoy (%) 30.4% 15.0% 15.1%

Net income 1,870 2,158 2,492

+/- % 30.9% 15.4% 15.5%

EPS (EPS (VND/share) 11,690 13,488 15,578

FCFE Methods 154,129

P/E Multiple 161,861

0

200

400

600

800

1,000

1,200

1,400

1,600

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

VN

-In

dex

VC

S

VCS VN-Index

VALUATION

FORECAST

POWER SECTOR


Demand decreased by 4th wave of Covid 19

According to GSO and EVN, 3rd Quarter’s GDP fell 6,17% is the main driver of Power

consumption growth of -10,53% compare to Q2.2021 and -4,14% yoy. Especially in the

South, Power demand decreased 23,41% qoq and 13,59% yoy in 3rd quatre.

SECTOR’S MOVEMENT IN 2021

94

Coal and natural gas surged and peak at Oct.

Australia coal have nearly tripled since the beginning of the year from 83 USD/ton to a

peak of 236.9 USD/ton and then reduced to 154 USD/ton in mid-November 2021.

However, The domestic price of coal was stable in this year.

The HFO price as a reference for gas prices sold to the power industry also increased

significantly from 3,912 USD/mmBTU up to 5,226 USD/mmBTU (+33.6%).

Gas prices at Phu My Thermal Power Plant increased by 38% compared to the

beginning of the year and increased by 47.7% yoy due to the higher cost of exploitation

and transportation of SV – DN field compared to old fields. (Higher investment installed

cost).

Average full market price higher due to La Nina come later and weaker than last

year.

0

500

1,000

1,500

1 2 3 4 5 6 7 8 9 10 11 12

Average full market price

2021 2020 2019 2018

Source: EVNGENCO 3, VCBS

VND

0%

5%

10%

15%Power consumption, IIP and GDP

Energy Production

Source: Fiinpro, EVN, VCBS

0

1

2

3

4

5

6

7

8

9

0

50

100

150

200

250

No

v-1

8

Jan

-19

Mar

-19

May

-19

Jul-

19

Sep

-19

No

v-1

9

Jan

-20

Mar

-20

May

-20

Jul-

20

Sep

-20

No

v-2

0

Jan

-21

Mar

-21

May

-21

Jul-

21

Sep

-21

No

v-2

1

Coal and Natural price 2017 - 2021

Australia Coal Domestic coal (left)

HFO Phu My input gas price

USD/mt USD/mmBt

Source: EIA, Nasdaq, PGV



95

Wind power racing finished.

There’re 84 wind power plant operated in time with total capacity of 3.980,27 MW to get the FIT price. The other 04 projects with total capacity of

178 MW completed installation but not generate power in time.

There’re 62 remaining projects signed contract but delayed.

Those projects will wating for the new selling policy (would be auction and negotiate with EVN for each project).

Completed projects:

Sticker Projects Capacity (MW)

Total capital

(VND billion) Investment/MW Type COD capacity Place Note

PC1

Lien Lap 48 1921 40.0 Onshore 48 Quang Tri Own 55%

Phong Huy 48 1921 40.0 Onshore 48 Quang Tri Own 55%

Phong Nguyen 48 1921 40.0 Onshore 48 Quang Tri Own 55%

GEG

Tan Phu Dong 2 50 2242 44.8 Offshore 50 Tiền Giang

Ia Bang 1 50 1790 35.8 Onshore 50 Gia Lai

VPL 30 1448 48.3 Offshore 25.2 Ben Tre

REE

Loi Hai 2 28.8 987 34.3 Onshore 28.8 Ninh Thuan Own 50%

V1-3 Tra Vinh 48 2010 41.9 Offshore 48 Tra Vinh

Phu Lac 2 25.2 860 34.1 Onshore 25.2 Binh Thuan Own 50%

VNE Thuan Nhien Phong 1 32 1203 37.6 Onshore 19 Binh Thuan

HDG 7A Thuan Nam 50 1710 34.2 Onshore 50 Binh Thuan

TTA Phuong Mai 1 26.4 1076 40.8 Onshore 26.4 Binh Dinh Own 25%

TV2 Tan Thuan Dong 75 3600 48.0 Offshore 75 Ca Mau Own 25%

GEX Gelex 1,2,3 90 4057 45.1 Onshore 90 Quang Tri

Huong Phung 2,3 50 2196 43.9 Onshore 49.4 Quang Tri

SCI Huong Linh 8 25.2 975 38.7 Onshore 25.2 Quang Tri Own 20%

S99 Huong Linh 8 25.2 975 38.7 Onshore 25.2 Quang Tri Own 80%

HID Phuong Mai 3 20.79 901 43.3 Onshore 20.79 Binh Dinh Own 51%



96

The shortage of Water level in hydroelectric dam

in the North, but has improved significantly in the

South .

According to EVN, by November, water stored

at the Son La and Hoa Binh hydropower plants

only reach about 67% of the useful capacity, a

shortfall of about 4.19 billion m3. Hoa Binh

Lake is now 10.38m under the normal water

level

-6

-4

-2

0

2

4

6

Tu

yên

Qu

ang

Hò

a B

ình

Bản

Chát

Lai

Châu

Quản

g T

rị

Tru

ng S

ơn

Vĩn

h S

ơn A

Vĩn

h S

ơn C

A V

ƣơ

ng

Sô

ng H

inh

Sô

ng B

un

g 4

Buô

n T

ua

Sra

h

Sre

pok

3

Kan

ak

Ialy

Đơ

n D

ƣơ

ng

Sê

San

3

Sê

San

4

Hàm

Thuận

Đồ

ng N

ai 4

Thác

Mơ

Tây Bắc Bộ Bắc Trung Bộ Nam Trung Bộ Đông Nam Bộ

Water lever compare to last period Mét

La Nina continue but rising El Nino probability in next year.

La Nina occurring but weaken help hydropower plant in the South

and South Centre to benefit.

The possibility of El Nino coming back increases from August

2022, so the rainy season in 2022 may be less rainy, leading to water

shortages in the will decline especially in the North.

Source: IRI, VCBS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NDJ DJF JFM FMA MAM AMJ MJJ JJA JAS

El Nino, La Nina Probabilities

La Niña Neutral El Niño


La Nina weaker and later than last year help to increase rain in Mid –

Centre and South – Centre

Hydropower plant in the South and South –Centre will take

advantage from this trend in 2022 such as: SJD, TMP, DNH, SBH…

Northern Coal – fired power will be beneficiary water shortage from

4Q.2021 to 2022 combine with the recovery of the economy in 2022.

El Nino probability increase in 2022 to 2023.

El Nino come back in August, 2022 with 35% of probability

according to IRI. That’s the reason why hydropower will drop output

and increase mobilization of Coal – fired power in 2022 – 2023.

POWER PROSPECTIVE IN SHORT – TERM

97

Renewables:

Companies increase capacity to get FIT price of Wind power will

have considerable increase in revenue and Earning such as: GEG,

PC1, HDG, REE, GEX

Source: IRI, VCBS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


El Nino, La Nina probability


Source: VCBS

0

200

400

600

800

1000

PC1 REE* GEG GEX HDG

Total power capacity of some companies

Current capacity Capacity added in 2021

MW


POWER PROSPECTIVE IN LONG – TERM

98

PDP 8 draft prioritized Renewables and LNG fired thermal power.

Renewables account for 40% and 43% in total resource in 2030 and 2045,

respectively especially Wind power.

Coal-fired power is facing difficulties when international organizations

no longer support. All new projects have to use imported coal sources

higher technology. It is expected to develop another 30 GW of coal- fired

power by 2045, but about 15GW has not accessed capital yet.

Commitment to “Net zero” by 2050 at COP26 will promote strong

investment in LNG and Renewables energy, especially offshore wind power.

It is expected to phase out coal power and increase renewable energy to 88%

along with energy sources with less carbon emissions such as gas power.

Source: IEA, VCBS Source: IEA, VCBS

Source: Mof, EVN, VCBS

0

50,000

100,000

150,000

200,000

250,000

300,000

2020 2025 2030 2035 2040 2045

Power capacity base on resource 2020 - 2045

(base scenario)

Coal fired thermal Gas fired thermal Hydropower

Wind Solar PV Others

Import

MW

0%

20%

40%

60%

80%

100%

2010 2020 2030 2040 2050

Net Zero by 2050

Fossil fuel resource Renewables resource Others low carbon


POWER PROSPECTIVE– RECOMMENDATION

99

We believe that the Power sector will continue to differentiate, promising businesses with the following characteristics

In short-term: Companies taking advantage of La Nina and El Nino cycles, companies timely operate wind power

projects in 2021.

In long-term: Developer, construction contractors for LNG, Renewables and especially offshore wind power projects.

Some typical companies:

Based on the above assessment, we choose QTP and HND stocks in 2022 with the expectation of increasing the mobilization of capacity of

thermal power plants in the North due to power shortage in 2022.

# Sticker Market cap

(VND billion) P/E P/B EV/EBITDA DY Type

1 HND 9,354 13.09 1.57 4.93 12.79% Coal - fired

2 PPC 7,358 10.14 1.51 17.07 27.20% Coal - fired

3 QTP 7,858 6.54 1.31 5.30 8.33% Coal - fired

4 NT2 6,420 10.42 1.56 4.94 9.09% Gas - fired

5 GE2 41,651 24.54 1.85 7.53 0.00% Thermal and hydropower

6 PGV 39,111 12.04 2.38 9.95 2.94% Thermal and hydropower

7 POW 31,615 11.57 1.05 5.46 1.82% Thermal and hydropower

8 VSH 6,756 18.40 1.77 13.91 0.00% Hydropower

9 DNH 17,868 17.36 3.00 13.48 6.15% Hydropower, RE

10 SJD 1,483 10.34 1.66 6.59 0.00% Hydropower

11 TMP 3,493 15.08 3.01 10.46 17.14% Hydropower

12 REE 31,324 12.07 1.74 15.73 0.00% Real Estate, RE, Construction

13 PC1 8,959 12.71 1.71 15.43 0.00% Real Estate, RE, Construction

14 HDG 12,011 14.53 3.15 9.90 3.33% Real Estate, RE, Construction

15 TV2 2,962 9.20 1.98 7.89 2.50% RE, Construction

16 GEG 6,074 21.61 1.83 12.22 8.16% RE


QTP – SUMMARY

100

Core business

Company have 2 plants of coal – fired thermal power with total

capacity of 1.200 MW (4x300) started generate power from 2011

and 2014 for first plant and second plant, respectively.

Shareholder proportion

The largest shareholder is Power Generation Corporation 1 with

42%, followed by Pha Lai Thermal Power with 16.35%, SCIC with

11.42% and DTK with 10.62%, the rest are other shareholders.

9M.2021 performance:

9M.2021 revenue reached VND 6,238 billion (-7.5% yoy),

achieving 75% of the year plan with power output of 4,883 million

kWh. Net income was 29.4% yoy, only 8.3% yoy mainly due to

higher market price of electricity and reduced depreciation expense

from Q4.2020.

Financial expenses dropped sharply (-40% yoy) mainly due to a

decrease in interest rates.

Other costs do not fluctuate much

NPAT reached 396 billion VND (last period experienced a lost of 40

billion VND), 24.6% higher than the year plan.

Shareholders

Genco1

PPC

SCIC

DTK

VCG

Others

Source: fiinpro, VCBS

275 651

1,381

396

13.3% 13%

20%

29.4%

8.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

(2,000)

-

2,000

4,000

6,000

8,000

10,000

12,000

2018 2019 2020 9T.2021 9T.2020

Business performance

Total Revenue Gross profits Profit after Tax Gross Profit margin

VND Bil

Source: QTP, VCBS


QUANG NINH THERMAL JSC – QTP

101

CATALYST

Water shortage in the North in the dry season of 2022. Northern water level at large hydropower plants have been low since

June 2021 and are expected to continue in the dry season of 2022 because this year has fewer storms than average. Therefore, the

recovery of electricity demand after Covid-19 in 2023 will require maximum mobilization of the generating capacity of thermal

power plants in the dry season of 2022.

The high probability that El Nino will return to cause less rain will continue to prolong the shortage of hydropower sources in

2022-2023.

Financial expense and depreciation are reduced. QTP has extended the depreciation of equipment from 10 years to 15 years.

In addition, the company is expected to pay off all loans in 2023, helping to reduce financial costs and increase FCFE.

Increasing cash dividends. QTP has paid dividends for the first time with 2% in 2020 and increased to 10% in 2021 and is ready

for resources to be able to pay 15% - 20% dividend in the near future after all loans and amortization.

RISK

Weather

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2018 2019 2020 2021F 2022F

Depreciation, Financial expense

Source: QTP, VCBS Source: EVN, VCBS

-6

-4

-2

0

2

4

6

8

Tu

yên

Qu

ang

Hò

a B

ình

Bản

Chát

Lai

Châu

Quản

g T

rị

Tru

ng S

ơn

Vĩn

h S

ơn A

Vĩn

h S

ơn C

A V

ƣơ

ng

Sô

ng H

inh

Sô

ng B

un

g 4

Buô

n T

ua

Sra

h

Sre

pok

3

Kan

ak

Ialy

Đơ

n D

ƣơ

ng

Sê

San

3

Sê

San

4

Hàm

Thuận

Đồ

ng N

ai 4

Thác

Mơ

North West North Central South Central South East

Water level compare to last period


QTP – BUY

102

Unit: VND billion 2020 2021F 2022F

Net revenue 9,182 8,215 8,939

+/- yoy (%) -9.32% -10.54% 8.82%

NPAT 1,306 585 690

+/- % 100.56% -55.19% 17.92%

EPS (VND) 2,901 1,300 1,533

FCFF 22,672

EV/EBITDA 26,860

ESTIMATE

VALUATION

24,700

TARGET PRICE

+40.8% BUY

5,000

7,000

9,000

11,000

13,000

15,000

17,000

19,000

HISTORICAL PRICE CHANGE

QTP Relative VNINDEX

Source: VCBS


HND – SUMMARY

103

Core business

Hai Phong thermal JSC is a coal – fired thermal generator with total

capacity of 1.200 MW (4x300) located in North East. The 1 and 2

plant operated in 2011 and 2014, respectively.

Shareholder proportion

GE2 is the parent company with 51% stake, followed by PPC with

25,97% and the others.

9M.2021 performance

• 9M.2021's revenue only reached VND 6,809 billion (-19.3%

yoy, reaching 75.6% of the year plan) mainly because this

year's Alpha Qc coefficient decreased by 5% over the same

period and low water level in the North West. Pc decreased

from 610 VND to 410 VND.

• Therefore, gross profit margin decreased sharply, reaching

only 4.9% (last period reached 14.8%).

• Financial income increased by 103% mainly due to the

decrease of JPY against VND at the beginning of the year.

Financial expense decreased 43% yoy as the company is

about to complete loan repayment.

• As a result, NPAT only reached VND 183 billion (-80% yoy),

reaching 87% of the 2021 plan.

Source: Fiinpro, VCBS

Source: HND, VCBS

51.00%

25.97%

23.03%

Shareholders

Genco2 PPC

Others

425 1,173 1,381

183 921

16.7% 16%

20%

4.9%

14.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

-

2,000

4,000

6,000

8,000

10,000

12,000

2018 2019 2020 9M.2021 9M.2020

Business performance

Total Revenue Gross profits

Profit after Tax Gross Profit margin

VND Bil


Hai phong thermal JSC– HND

104

CATALYST

El Nino may return from the second half of 2022 to help

increase the mobilization of thermal power plants

The large hydropower plants in the North have low water

storage due to less rain and storms in the rainy season, helping

coal-fired power companies to increase mobilization from Q3-

Q4.2021 until at least 1H.2022

Demand recovers after Covid, but the Northern power source

has not been developed in recent years. According to EVN, it is

likely that the North will lack about 1,500 MW - 2,400 MW during

some peak hours or extreme weather (El Nino) when attracted a

large number of FDI enterprises in recent years.

Units 1&2 begin to reduce depreciation from the end of 2021;

pay off loan from 2024. These two things will help HND increase

profits for the next years and improve cash flow to continue to

maintain the ability to pay high dividends in the future.

0%

20%

40%

60%

80%

100%


El Nino, La Nina probability


Source: IRI, VCBS


HND – BUY

105

Unit: VND billion 2020 2021F 2022F

Net revenue 10,900 9,709 10,681

+/- yoy (%) -3.55% -10.93% 10.01%

NPAT 1,470 425 655

+/- % 25.33% -71.06% 54.10%

EPS (VND) 2,940 851 1,311

DCF method 23,022

EV/EBITDA 23,508

ESTIMATE

VALUATION

23,200

TARGET PRICE

+25% BUY

5,000

10,000

15,000

20,000

25,000

30,000

HISTORICAL PRICE CHANGE

HND Relative VNINDEX

Source: VCBS

SEAFOOD


SEAFOOD INDUSTRY - OVERVIEW

107

Source: Vasep. VCBS compiled. GSO

3205.6

1131.2

823.2

1857.8

Total seafood volume

Aquaculture

Capture

7.175,4

Thousand tons

0,2% yoy

Other

Marine capture

Inland capture

Shrimp

Pangasius

Export turnover of Vietnam seafood industry in

October 2021 hit USD 888.6 million, peaking

since the beginning of 2021, but still decreased by

2.92% yoy.

Accumulated10M.2021 export turnover exceeded

USD 7 billion, increasing by 1.92% yoy driven by

the strong growth of the US market of more than

24% yoy.

Export turnover of fishery industry is on the way of recovery

24%

15%

12% 9%

13%

27%

Proportion of seafood exports of Vietnam

10M.2021

US

Japan

China

Korea

EU

Other

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Total US Japan China Korea EU

Seafood export value of Vietnam

10M.2021/10M.2020

10M.2021 10M.2020

0

2

4

6

8

10

12

14

16

Korea US China Japan EU

Market share of some countries in the main

export markets

Vietnam Thailand India Indonesia


SEAFOOD INDUSTRY– OVERVIEW

108

The US played the key role in Vietnam's seafood export market with 24% of the

total export value, showing growth potential despite the covid-19 epidemic.

EU market: Vietnam is the 7th largest seafood supplier, turnover of which grew

by 3.2% yoy in volume and slightly decreased by 1.2% yoy in value.

Vietnam is the largest shrimp supplier to Korea, accounting for 51.2% in volume

and 49.5% in value.

Export turnover of fishery industry is on the way of recovery

The average shrimp export price in 10M.2021 has increased by 3.3% yoy

compared to the average in 2020 ($8.95/kg).

The average pangasius export price in 2021 has increased by 6.1% yoy

compared to the 2020 average ($1.95/kg).

Export prices is in an upward trend, reflecting recovery in demand

7

7.5

8

8.5

9

9.5

10

10.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Export price of shrimp of Vietnam, period 2019-2021

2019 2020 2021

1.50

1.70

1.90

2.10

2.30

2.50

2.70

2.90

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Vietnam's pangasius export price, period 2019-2021

2019 2020 2021

-

5.00

10.00

15.00

20.00

25.00

30.00

3/1

-9/1

30

/1-5

/2

27

/2-5

/3

27

/3-2

/4

24

/4-3

0/4

22

/5-2

8/5

19

/6-2

5/6

17

/7-2

3/7

14

/8-2

0/8

11

/9-1

7/9

9/1

0-1

5/1

0

6/1

1-1

2/1

1

4/1

2-1

0/1

2

1/1

-7/1

29

/1-4

/2

26

/2-3

/3

25

/3-3

1/3

16

/4-2

8/4

20

/5-2

6/5

17

/6-2

3/6

15

/7-2

1/7

12

/8-1

8/8

9/9

-15/9

7/1

0-1

3/1

0

4/1

1-1

0/1

1

2/1

2-8

/12

30

/12-5

/1

30

/3-7

/4

27

/4-4

/5

26

/5-2

/6

15

/7-2

2/7

10

/8-1

7/8

07

/9-1

4/9

05

/10-1

2/1

0

2/1

1-9

/11

Difference in shrimp export prices between markets, period 2019-2021

US China JapanSource: Vasep, VCBS compiled


SEAFOOD INDUSTRY– HIGHLIGHTS

109

MANUFACTURING ACTIVITIES AND MOVEMENT OF INPUT MATERIALS

Domestic raw material prices are showing signs of gradual increase,

reflecting bounce in demand.

- The average price of raw pangasius in 11M.2021 (VND 21,342/kg) has

increased by 11.9% compared to the average price in 2020.

- The average price of black tiger shrimp and vannamei shrimp in 11M.2021 also

increased by 8.7% and 7.2% respectively compared to the average price in

2020.

Risk of supply shortage. The operating capacity of many businesses was

only 30-40% during the period of social distancing while the price of raw

pangasius and shrimp remained at low level. If the above situation is

prolonged, it may lead to the risk of shortage of raw materials at the end of

the year.

The price of raw shrimp in competitor nations is on the rise

- Indonesia: stocking activities have returned to normal situation since August

2021, the purchasing demand is quite large to meet the delivery of export orders

in time, causing an increase in the price of raw materials.

- India: Problems related to unfavorable weather and quality of seed have caused

a lot of damage to the second shrimp crop of the year, as a result, the supply of

raw shrimp was low. Mainly small shrimps are harvested, which is expected to

remain low until Q1.2022.

- Thailand: Also affected by unfavorable weather conditions (most areas across

the country are on flood alert while much of the harvest has been completed,

resulting in overall shrimp supply) expected to decline in the short term.

Source: Vasep, VCBS compiled

Average cost of producing raw

pangasius: 22,500 VND/kg

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

December 10,

2015

December 10,

2016

December 10,

2017

December 10,

2018

December 10,

2019

December 10,

2020

Price movement of raw pangasius in Dong Thap province (VND)

Price of pangasius type 1 (size 0.7-0.8kg) Price of fingerlings (powder)

250

300

350

400

450

500

550

600

650

700

Price movements of raw shrimp in Khanh Hoa province

White leg shrimp (size 60-80 shrimps/kg)

Black tiger shrimp (size 40 shrimps/kg)


SEAFOOD INDUSTRY– OUTLOOK

110

Export prices are expected to keep increasing in 2022, due to:

- Export prospects from major markets. In general, the main

markets are recovering thanks to the widespread vaccination

rate and the implementation of post-covid support packages.

- Raw material prices in the producing countries have

increased, creating a basis to push export prices.

- Horeca channel is gradually reopening. The trend of favoring

deeply processed foods continues to be popular after the

epidemic.

Shrimp - strong and sustainable increase.

Vannamei shrimp: Consumption in the retail channel still

maintains a good growth rate.

Black tiger shrimp increased more strongly when the demand

was great while the supply was scarce..

- We believe that the epidemic period may cause many farmers

to harvest early.

- The reserve of shrimp in many markets is not too large in the

context of the big festivals of the year coming.

- Global shrimp supply in the last months of the year is forecast

to decrease, and prices are expected to increase, especially for

large shrimp.

Pangasius- in the recovery trend but not spike. mainly targeting

the US market when the horeca channel in this market recovers.

The potential comes from free trade agreements.

- EVFTA Agreement in the EU market: The EU is Vietnam's third largest

seafood export market, after the US and Japan. This market always

accounts for over 17-18% of Vietnam's total seafood export value; in

which shrimp products alone, EU accounts for 22%, pangasius 11%,

seafood products accounts for 30-35%. According to the EVFTA

Agreement. there are about 220 tax lines for aquatic products with the

base tax rate of 0-22%; in which most high taxes from 6-22% will be

reduced to 0% as soon as the Agreement comes into effect, the remaining

tax lines will be reduced to 0% according to the 3-7 year roadmap.

- RCEP Agreement, effective from January 1, 2022, is expected to create a

boost for seafood exports, especially in the markets of Japan, Korea,

Australia...

Competition

- India :

+ In the recovery phase of production after being heavily affected by the

Covid-19 epidemic.

+ China has imposed tariff barriers and tightened inspection of shipments.

Increased product inspection time leads to large inventory costs.

- Ecuador:

+ faced obstacles due to China suspending imports for some companies

supplying from this country to prevent covid-19 epidemic.

+ advantage geographical location near the US, convenient for export

activities to this market. Currently trying to increase hiring of female

workers from other countries to improve processing skills, instead of just

focusing on selling whole shrimp as in the previous period.


• The demand for shrimp from Vietnam has been quite stable since the

outbreak of the Covid-19 epidemic in the world. In the fourth epidemic

wave in Vietnam, exports to the US only decreased in September and

recovered quickly in September. 2021

• Demand for large shrimp is recovering. In October. 2021, Vietnam's

shrimp exports to the US reached 117.7 million USD, increased by

19% yoy.

• Accumulated in the first 10 months of this year, Vietnam's shrimp

exports to this market reached $892.7 million, increased by 22% yoy.

EU Market

• In October 2021, Vietnam's shrimp exports to the US

reached nearly $74 million, up 13% compared to October

2020. Accumulated 10M.2021, Vietnam's shrimp exports to

this market reached nearly 482 million USD, increased by

10.4% yoy.

• The three main import markets for Vietnamese shrimp in

the EU are Germany. Netherlands and Belgium. As of

October 2021, shrimp exports to Germany and the

Netherlands increased by 17% and 0.6%, respectively.

Exports to Belgium increased by 7%. We think that after

the EVFTA agreement, Vietnam will gradually gain market

share from the EU market.

• The last months of this year, many supply partners for the

EU are struggling with the covid-19 epidemic, leading to

limited supply, along with sea freight rates, although they

have cooled down, they are still high compared to the

previous year while consumer demand in the last months of

the year usually remains high.

China Market

• In October.2021, Vietnam's shrimp exports to China reached USD 43.5

million, decreased by 36.5% yoy.

• Accumulated 10M.2021, Vietnam's shrimp exports to this market

reached USD 341.5 million, decreased by 25% yoy. Vietnam's shrimp

exports to China have decreased continuously since the beginning of

the year until now. The reason is due to the strict control policy of

corona virus on imported seafood, causing congestion at ports in

China.

• China's seafood production and export industry has been negatively

affected by the Covid epidemic, so it seems that their government also

wants to protect domestic seafood product, should find ways to limit

imports.

US Market

SEAFOOD INDUSTRY– OUTLOOK


Q3.2021 Net revenue NI Equity %yoy Rev GPM NPM ROE ROA EPS BVPS

Pangasius

AAM

13.757

142

190.028 -43,28% -5,00% -11,19% -6,09% -5,76% -1.118 18.182

ABT

70.960

1.078

417.652 -7,02% 14,28% 7,12% 4,90% 3,72% 1.770 36.326

ACL

223.876

3.521

719.723 24,97% 12,12% 3,36% 5,60% 2,56% 792 14.349

ANV

655.800

(13.169)

2.408.347 -18,87% 15,29% 4,77% 6,73% 3,29% 1.265 18.944

DAT

399.815

2.793

678.527 -34,65% 4,49% 1,97% 6,84% 2,90% 992 14.749

IDI

1.110.944

9.910

3.056.398 -26,65% 7,94% 1,48% 2,73% 1,10% 363 12.751

VHC

2.230.522

256.210

5.728.937 23,93% 16,13% 9,66% 14,72% 10,49% 4.396 31.291

Shrimp

BLF

114.500

2.859

154.153 -15,56% 25,78% -1,60% -4,38% -1,31% -591 13.405

CMX

526.856

27.588

920.933 30,85% 14,02% 4,52% 9,16% 3,66% 1.717 11.669

FMC

1.625.322

63.629

1.544.524 0,31% 9,73% 4,84% 16,75% 10,12% 4.030 23.030

MPC

2.784.811

289.186

5.404.263 -36,73% 14,73% 5,34% 12,96% 7,27% 3.431 26.396

SEA

271.231

52.038

3.016.142 29,44% 11,22% 23,36% 7,46% 6,27% 1.760 23.299

THP

645.165

1.981

341.991 0,00% 9,26% 1,13% 8,89% 2,23% 1.391 15.825

Vaue – added products

KHS

192.064

7.990

228.216 -34,00% 11,04% 4,24% 23,19% 8,21% 4.169 16.503

SJ1

330.270

5.058

291.040 24,05% 8,24% 1,15% 4,42% 1,32% 582 13.137

SPD

168.780

1.018

116.171 -12,00% 7,81% -2,83% -18,28% -5,25% -1.758 9.681

SSN

3.385

168

452.108 -23,58% 46,21% 0,15% 0,01% 0,00% 1.000 11.417

TS4

4.545

(15.553)

108.755 -96,35% 1,99% -7,71% -14,69% -2,07% -1.267 6.775

COMPANY FINANCIAL STATISTICS IN SEAFOOD INDUSTRY


VINH HOAN CORPORATION– OVERVIEW

Main businesses:

VHC is among the leading company in the pangasius processing and exporting basa

in Vietnam with a current capacity of up to 250 tons of raw fish/day. The company

has the advantage of raw material self-sufficient because it is located in Dong Thap

province, which is in Mekong Delta region with the environment and conditions

considered to be the most favorable for the pangasius and raw basa. They are

possessing 8 pangasius aquatic farms, total area of which reach 136.5 ha, providing

34% of raw material demand. The company's products are eligible for export to

many countries around the world, including the US and EU countries. the most

demanding market in the food export industry from overseas markets and gradually

becoming a reputable brand both at home and abroad.

Business result:

- October, 2021, export revenue reached VND 780 billion (+6% yoy, +19% mom)

- Accumulated 10M.2021, VHC recorded net revenue of VND 6,899 billion

(+15% yoy). In which, the US market reached VND 3,014 billion, contributing

43.4%.

- 9M.2021 net profit margin reached 10.2%, slightly down from 10.7% in the same

period of 2020.

113

0

1000

2000

3000

4000

5000

6000

Pangasius By -product C&G Value -added

products

Other

Revenue structure by business segment

10M.2020 10M.2021

0

500

1000

1500

2000

2500

3000

3500

US Europe China Other \

Revenue structure by market

10T.2020 10T.2021

43.16%

6.50% 4.98% 4.92%

33.26%

VHC's shareholder structure

Truong Thi Le Khanh

Mitsubishi Corporation

Vietnam Asset Management

Red River Holding

Vo Phu Duc

DC Developing Markets

Strategies Public Limited

Company

Source: Vasep, VCBS compiled


VINH HOAN CORPORATION– OUTLOOK

114

Benefiting from the US market's recovery by maintaining the top position of the largest pangasius exporter in Vietnam. The US market

accounts for more than 40% of VHC's total export value. Demand of this market should increase in the last months of the year and early 2022 to

serve major festivals, especially when the Horeca channel has been canalized, which currently accounts for about 60% of VHC's export revenue

in the US market.

Perfecting the ecosystem and production chain. It is expected to spend 700 billion VND to build an aquatic feed factory, hatchery and own

land for the high-tech agricultural and aquaculture complex. Investments have been made in many agricultural fields: shrimp chips (Sa Giang

Import-Export JSC), fruit and vegetable processing (Thanh Ngoc Agricultural Products Co., Ltd.), protein products (Vinh Technology).

The long-lasting effects of the covid-19 epidemic caused supply chain disruptions, We expect that VHC can capture market share from

small exporters.

Collagen and Gelatin array continues to achieve high growth with the new collagen line. The line is currently operating at about 60%

capacity, which can be increased to 80% by 4Q.2021, depending on the demand in the main markets. We estimate that we will contribute about

VND 250-300 billion in revenue and VND 100 billion in profit.

Fingerling

A q u a t i c f e e d

Raw fish FACTORY

INPUT

ABT. HVG. VHC

VHC. HVG. IDI. ANV. ABT. ACL

VHC. HVG. IDI. ANV. ABT. ACL

Frozen pangas ius s l i ce

IDI. VHC. HVG. ACL

Frozen panagas ius f i l l e t

IDI. VHC. HVG. ACL

Seasoned pangas ius f i l l e t

IDI. VHC

Col lagen . ge la t in

VHC

B y - p r o d u c t

ID I . V H C . AN V . H V G

OUTPUT


P/E 75,976

FCFF 77,454

FORECAST

VALUATION

76,962 VND

TARGET PRICE

24% UPSIDE

Unit: VND bil 2020 2021F 2022F

Net revenue 7,037 8,913 11,119

+/- yoy (%) -10,5% 26.7% 24.8%

Net income 704.82 958.20 1,420.19

+/- % -40.22% 35.95% 48.22%

VINH HOAN CORPORATION– VALUATION

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

STOCK PRICE MOVEMENT

VHC Relative VN Index


MINH PHU SEAFOOD JSC– OVERVIEW

Business overview:

After 23 years of non-stop development, MPC has become a seafood corporation

with the largest seafood export turnover in the country and has a stature in the

region and the world, Minh Phu has not only built a consumption network across

the country but also expanded to major markets in the world such as the US,

Canada, EU, and Australia….

Business results

In Q3.2021, revenue reached VND 2,785 billion (-37% yoy) but NI reached VND

290 billion (+20% yoy) due to the impact of the covid-19 epidemic disrupting the

supply chain, leading to a reduction in shrimp processing capacity of 30-70%,

making them unable to meet the orders.

Meanwhile, the increase in export price helps to improve the GPM and NPM of

the company. Accumulation 9M.2021. MPC recorded revenue of VND 8,887

billion (-11% yoy) and EAT of VND 544 billion (+14% yoy).

116

30.00%

17.54%

16.05% 5.68%

4.18%

4.09%

3.26%

19.200%

MPC’s shareholder structure

MPM Investments Pte., Ltd.

Chu Thị Bình

Lê Văn Quang

Phạm Ngọc Hồng Thu

Earls Court Enterprises

Limited

Công ty Cổ phần Đầu tƣ

Long Phụng Lê Thị Dịu Minh

Others

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2017 2018 2019 2020

Revenue structure by product

Fresh products Steamed products Value-added products

25.35%

24.47%

13.24%

13.00%

23.93%

MPC's revenue structure by market in 2020

Mỹ

Nhật

Canada

Khối EU

Khác


Source: VCBS compiles

117

Benefit from the EVFTA Agreement when enjoying the advantage of

shrimp export tax to the EU market (the market currently contributes about

13% of the export value of MPC).

The first step of the plan to reach input self-sufficient status, through:

- Enhance the traditional farming areas with “2-3-4 Technology” to increase

production and improve the quality of raw materials.

- Building production areas for adaptive black tiger shrimp and vannamei

shrimp broodstock with disease resistance, fast growth and high quality

shrimp seed production area in Ninh Thuan province.

- Combining AI technology and Blockchain platform to build a smart mobile

application (Mobile app) to manage shrimp farming...

Accordingly, the company plans by 2022 to raise the autonomy rate to 30%

=> 70% (by 2025) and 100% (by 2030).

Potential Japanese market. MPC ranks 2nd in terms of export value to

the Japanese market

The long-term growth driver comes from perfecting the smart shrimp value

chain. The complex is deployed on 10,000 hectares of land in Kien Giang

province, with a total investment of VND 50,000 billion, expected to be

deployed within 6 years.

0 10 20 30 40 50 60 70

CTCP THỰC PHẨM XK TRUNG SƠN

HƢNG YÊN

CTCP TẬP ĐOÀN THỦY SẢN MINH PHÚ

CTCP SÀI GÒN FOOD

CTCP THỰC PHẨM SAO TA

CTY TNHH MTV TRUNG SƠN LONG AN

CTCP THỦY SẢN MINH PHÚ - HẬU

GIANG

CTY CP HẢI VIỆT

CTCP XNK THỦY SẢN MIỀN TRUNG

CTCP THỰC PHẨM CÁT HẢI

CTY TNHH CHẾ BIẾN & XK THỦY SẢN

CAM RANH

CTY TNHH HẢI NAM

Seafood export enterprises with high value from Vietnam to Japan

9M.2021

MINH PHU SEAFOOD JSC– OVERVIEW


P/E 60,754

FCFF 60,382

FORECAST

VALUATION

60,568 VND

TARGET PRICE

27% UPSIDE


Net revenue 14,329 14,722 16,694

+/- yoy (%) -15.7% 3.7% 12.3%

Net income 668.41 941.65 1,134.81

+/- yoy (%) 51.62% 40.88% 20.51%

MINH PHU SEAFOOD JSC– VALUATION

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

Ap

r-2

0

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

Au

g-2

1

Sep

-21

Oct

-21

No

v-2

1

VN

D


MPC Relative VN Index


OIL & GAS


OIL AND GAS INDUSTRY – OIL DEMAND

120

Source: World Bank

Crude oil demand by region

- In October 2021, total world crude oil consumption reached 98.9 million

barrels per day, 4.5 million barrels higher than 2020 but still 1.9 million

barrels lower than 2019. It demonstrates total oil consumption has not yet

reached pre-epidemic levels – when oil prices were at 60-65 USD/barrel.

- The three main oil-consuming markets are China, the OECD, and the rest

of the world. According to WorldBank's statistics, the oil consumption

index as of 3Q2021 has almost returned to the pre-epidemic level. For the

Chinese market, the consumption index increased sharply compared to

before the epidemic at 110 points. According to WorldBank forecast, the

growth rate of oil consumption in other countries will slow down in 2022.

Therefore, VCBS temporarily concludes that in the short term, oil demand

is likely to be stable.

Crude oil demand by category

- Demand for oil products such as Diesel and Gasoline has recovered in

3Q.2021, although it is still lower than before the pandemic due to the

social distancing around the world.

70

85

100

115

20

19Q

1

20

19Q

3

20

20Q

1

20

20Q

3

20

21Q

1

20

21Q

3

20

22Q

1

20

22Q

4

China Non-OECD ex. China OECD

Index, 2019Q4 = 100

20

40

60

80

100

120

20

19Q

1

20

19Q

3

20

20Q

1

20

20Q

3

20

21Q

1

20

21Q

3

20

22Q

1

20

22Q

4

Diesel Gasoline Jet

Index, 2019Q4 = 100


OIL AND GAS INDUSTRY – OIL SUPPLY

121

Source: World Bank

Output drop in 3Q is temporary

- In September, due to the impact of Hurricane Ida, shale oil production fell

sharply in the US. This was a big impact on crude oil prices in the interim.

- The total number of active rigs in the world as of October 2021 has

recovered from disruptions but still remains low due to cut production

agreement of OPEC +.

Supply is still in a state of reduction

- Since June 2020, restrictive output policies from both OPEC+ and US

shale producers have kept global oil production below consumption to

support market price in the near term.

- At the last meeting on November 4, 2021, OPEC kept its decision to

increase output by no more than 400,000 barrels per day until the end of

April 2022. At this point in 2019, OPEC has cut more than 1.7 million

BPD in comparison with 2018 in a total of 11.4 million BPD since it first

cut.

- VCBS believes that the upcoming moves by OPEC + and related parties

will greatly affect the oil price outlook.

-14

-12

-10

-8

-6

-4

-2

0

2

4

Jan-2

0

Apr-

20

Jul-

20

Oct

-20

Jan-2

1

Apr-

21

Jul-

21

Non-OPEC+ OPEC Other OPEC+

Percent change relative to January 2020

-20

-15

-10

-5

0

5

10

15

-80

-60

-40

-20

0

20

40

60

Jan-2

0

Apr-

20

Jul-

20

Oct

-20

Jan-2

1

Apr-

21

Jul-

21

Oct

-21

Rig count Oil production (RHS)

Percent, 3-month moving average Percent, 3-month moving

average


OIL AND GAS INDUSTRY – OIL PRICE OUTLOOK

122

Short Term

- According to EIA projections, world crude oil producers will stop

maintaining supply below crude demand from 2022.

- The EIA and OPEC both forecast that the growth rate of oil consumption

will slow down in 2022 when the demand recovery in 2021 is already very

strong.

- Changing monetary policy and rising inflation risks will put pressure on

producers to increase output so as to lower oil prices in the world.

- Therefore, VCBS forecasts oil price in 2022 will average at 60-65

USD/barrel.

Long Term:

- Crude oil consumption for the transportation sector still accounts for more

than 65% of total global demand. While the trend of electric vehicles is

growing strongly with the growth rate always at double digits per year. The

success of the electric vehicle industry will negatively affect the global

demand for oil.

- In addition, the explosion of the renewable energy industry in developing

countries is also a prerequisite for the development of electric vehicle trends

in these regions.

- Therefore, VCBS forecasts that oil prices in the long-term will remain in a

downtrend.

80

85

90

95

100

105

Supply - Demand

Total World Supply Total World Demand

0

1

2

3

0

1

2

3

4

5

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

EV sales (RHS) Share of total sales

Percent Million vehicles


Vietnam National Petroleum Group – Overview

123

Overview

PLX operates in the field of import-export and downstream

petroleum trading, refining – petrochemical, and investing in other

industries. In the petroleum business, PLX plays a leading role in

the market with more than 50% market share.

Shareholder Structure

The State Capital Management Committee owns more than 80% of

shares in PLX. In 2021, PLX also sold some treasury shares, in

which the major Japanese shareholder was the buyer of most of

this amount.

In 2020, PLX pays a cash dividend at the rate of 30% of par value,

equivalent to a return of 5.8% of par value.

Business Result

In 3Q.2021, PLX recorded VND34,645 billion (+26% yoy) in

revenue and VND76 billion (-93% YoY) in EAT. The decline in

PLX's operating results came from the impact of the COVID-19

epidemic in 3Q2021 when the government imposed strong social

distancing measures. Despite the sharp decline in output, thanks to

favorable world oil price movements, PLX still maintained a

positive profit in 3Q2021.

Logo DN

Sale’s Structure

Petroleum

Petrochemical

LPG

Insurance

Transportation

Others

Inside: Earning

Outside: Sales

83%

9%

8%

Ownership Structure

SCMC

JX Nippon Oil

Others

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

0

50000

100000

150000

200000

250000

2018 2019 2020 2021F

Historical Business Result

Sales Gross margin Net margin


Catalyst

Petroleum output recovers after the epidemic: COVID-19 epidemic in 2020 did not break out as strongly as in 2021. VCBS believes

that PLX's petroleum products sales volume will grow by more than 12% in 2022 - compared to the number of 8% in the period 2014 -

2019.

Divestment at PGBank. Divestment at PGBank. The divestment at PGBank of PLX will collect a large amount of cash. With the current

market price of PGBank at 35,000 - 40,000 VND/share, VCBS estimates that the cash collected for PLX will be nearly 3,500 billion VND

and PLX will record approximately 2,000 billion VND into profit on the company's income statement.

Valuation: The growth of book value thanks to the sale of PGBank’s share will affect the valuation of PLX. 3,000 billion VND is

equivalent to 25% of PLX's book value. Resonating with output growth in 2022, VCBS maintains a P/B of 3.2 times to value PLX.

Logo DN Vietnam National Petroleum Group – Catalyst

BVPS MVPS P/B

PLX 20,000 57,000 ~2.85

PGB 13,790 40,000 ~2.91

PLX – adjust 22,320 57,000 ~2.35

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

P/B

Unit: Lần

P/E cơ bản

Unit: Lần


Logo DN

Unit: bn VNĐ 2020 2021E 2022F

Sales 123,924 180,445 189,468

+/- yoy (%) -34.6% 45.6% 5.0%

NPAT 970 3,281 4,479

+/- % -76.7% 238.2% 36.5%

EPS (VND/share) 6,90 1,096 3,097

P/B 72,000

DCF 70,000

FORECAST

VALUATION

71,000/CP

TARGET PRICE

+25% UPSIDE

Vietnam National Petroleum Group – Valuation

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Nov-20 May-21 Nov-21

PLX Relative VN Index


Petro Vietnam Gas JSC – Overview

126

Overview

GAS operates in the field of transportation and trading of natural

gas. In addition, GAS is also the only refrigerant LPG distributor in

Vietnam with 70% of Vietnam’s LPG market share.


The shareholder structure of GAS is very concentrated in which

the Vietnam Oil and Gas Group owns more than 95% of the shares

of the enterprise.

PVN's plan to divest from PV GAS has been around for a long

time, but at the moment, there are no new developments.

Business Result

In 9M.2021, PV GAS recorded VND 58.815 billion (+21% yoy) in

revenue and VND 6,822 billion in EAT (+9.6% yoy). The decrease

in GAS's operating results comes from (1) The impact of the

COVID-19 epidemic on the demand for gas products – especially

the electricity demand of industrial clients, which indirectly

reduces the demand for gas consumption of power plants; (2) High

costs in maintaining production and business activities in the state

of social isolation..

Logo DN

Sale Structure

Natural Gas

LPG

Transportation

CNG

Others

Inside: Earning

Outside: Sales

95%

5%

Ownership Structure

PVN

Others

0%

5%

10%

15%

20%

25%

58000

60000

62000

64000

66000

68000

70000

72000

74000

76000

78000

2018 2019 2020E 2021F

Business Result



Catalyst

Natural gas consumption volume may recover slightly in 2022: The impact of the COVID-19 epidemic on PV GAS will be very large

in 2021. VCBS believes that gas consumption at thermal power plants can recover somewhat. However, the rapid development of the

renewable energy industry is reducing the need to mobilize gas power plants. Therefore, VCBS cautiously forecasts that gas consumption

will recover at 10% compared to 2020 equivalent to oil price at 70 USD/barrel.

Thi Vai LNG terminal: Currently, PV GAS has completed 90% of the construction of LNG Thi Vai port. According to the company's

share, PV GAS will put the LNG warehouse into operation from 3Q2022. However, PV GAS is facing two main obstacles (1) The NT3-

NT4 power plant have not been implemented yet; (2) LNG price is recording at a 10-year peak ~30 USD/MMBTU. VCBS expects LNG

price to return to $12/MMBTU in 2022, when world gas prices are showing signs of cooling down. VCBS expects that LNG trading

volume in 2022 will be at 15% of design capacity. The output is mainly used for industrial consumption.

Logo DN Petro Vietnam Gas JSC - Catalyst

- 20 40 60 80 100 120 140

6T.2021

6T.2020

Energy Production

Thủy điện NĐ than NĐ khí NLTT Nhập khẩu

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

Oct

-11

Mar

-12

Aug

-12

Jan-1

3

Jun

-13

Nov

-13

Apr-

14

Sep

-14

Feb

-15

Jul-

15

Dec

-15

May

-16

Oct

-16

Mar

-17

Aug

-17

Jan-1

8

Jun

-18

Nov

-18

Apr-

19

Sep

-19

Feb

-20

Jul-

20

Dec

-20

May

-21

Oct

-21

Asia’s LNG

LNG Châu Á


Logo DN

Unit: bn VND 2020 2021E 2022F

Sales 64,150 74,162 78,344

+/- yoy (%) -14.5% 15.6% 5.6%

NPAT 7,812 9,318 10,927

+/- % -34.4% 19.3% 17.3%

EPS (VND/share) 4.030 4.869 5.709

FCFF 130,182

FCFE 126,705

FORECASST

VALUATION

128,000/CP

TARGET PRICE

+25% UPSIDE

Petro Vietnam Gas JSC – Valuation

0.00

20000.00

40000.00

60000.00

80000.00

100000.00

120000.00

140000.00

GAS Relative Brent Oil

OTHERS


PETROVIETNAM GENERAL SERVICES JSC– OVERVIEW

Source: PET

Main businesses:

PET is a member unit of Vietnam Oil and Gas Group operating in the

fields of: distribution of electronic telecommunications and

information technology products, distribution of petrochemical

products, and supply of equipment and supplies, and logistics. in the oil

and gas industry. In which Catering service is the traditional service

segment. Currently, the Company owns a wide distribution and retail

system with 1,700 independent agents. 2020. PET officially became

one of Apple's authorized dealers in Vietnam market.

Shareholder structure: PVN is the largest shareholder with an

ownership rate of about 25%. In addition, shareholders of financial

institutions account for more than 30%. In general, PET's shareholder

structure is quite balanced.

Business results:

Quarter 3/2021, revenue reached VND 3,872 billion (-11.3% yoy). NI

reached VND 49.45 billion (-5.09% yoy). In which, GPM increased

from 3.9% to 5.1%.

Accumulated 9M.2021, PET recorded revenue of VND 11,485 billion

(+18.08% yoy) and NI of VND 173.38 billion (+53.72% yoy). The

main reason is that PET continues to promote the distribution of Apple

devices and expand the distribution of other types of smart wearable

devices.

130

0

2000

4000

6000

8000

10000

12000

Distribution Supply chain Catering Property

Revenue structure of PET, period 2017-2020

2017 2018 2019 2020

25.10%

6.14%

5.15%

4.78%

4.09% 3.81%

3.36% 2.76%

2.71%

1.56%

40.54%

PET's shareholder structure

PVN

Sai Gon – Ha Noi Fund Management JSC

Phung Tuan Ha

Samarang UCITS

SSI Securities

Deutsche Bank Aktiengesellchaft, London Branch

Ho Chi Minh City Securities

KITMC Worldwide Vietnam RSP Balanced Fund


PETROVIETNAM GENERAL SERVICES JSC– OUTLOOK

Source: Bloomberg, sunsir, VCBS

131

The mobile phone market in the last months of the year is expected to be more active

after a period of suppression.

Apple's product distribution is expected to continue to bring positive results. PET's

advantage in the distribution of Apple products comes from owning a nationwide network

that delivers goods to retail partners and middle-income regions. The iPhone 13 series

continues to open up great opportunities for PET in the last months of the year and early

2022 when the demand for shopping at the end of the year tends to increase.

The hand-goods market is no longer a priority, delivering opportunities for Apple

authorized resellers in Vietnam market to expand. Recently, Apple sent a notice that it may

refuse to accept warranty for genuine iPhones but without a purchase invoice (authorized

dealers have been certified by Apple for a new VAT invoice template to ensure warranty

regulations).

The distribution of plastic resins, LPG and fibers is expected to have positive results

on the low base level of 2020. PP and LPG prices are expected to keep the upward

momentum this year.

- Specifically, the average LPG price in 2021 will increase by 38.1% compared to the

average price in 2020.

- Meanwhile, the price of PP plastic resins, although volatile, still increased by more than

9.8% compared to the average in 2020 and is expected to remain stable in the year-end

period.

Other information- Thanh Da real estate project. Management expects the project will

have a red book for the Thanh Da real estate project this year. The company will find for

partners to implement the project after completing legal procedures.

0

2000

4000

6000

8000

10000

12000

1/10/17 1/10/18 1/10/19 1/10/20 1/10/21

PP price movement, period 2017-2021

0

1000

2000

3000

4000

5000

6000

7000

1/10/17 1/10/18 1/10/19 1/10/20 1/10/21

LPG price movement, period 2017-2021


P/E 38,882

FCFF 40,908

FORECAST

VALUATION

39,895 VND

TARGET PRICE

28% UPSIDE


Net revenue 13,915 17,200 19,970

+/- yoy (%) 39.03% 23.6% 16.1%

Net income 135.47 242.79 299.12

+/- % 10.98% 79.23% 23.20%


PETROVIETNAM GENERAL SERVICES JSC– VALUATION

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

VN

D


PET Relative VN Index


Dong Phu Rubber Joint Stock Company – Overview

133

Overview

DPR is one of the listed natural rubber companies with a fairly

large area in Vietnam with a total management area of nearly

16,000ha including subsidiaries.


DPR is one of the subsidiaries under the Vietnam Rubber Group -

GVR. GVR currently holds ~56% of total DPR's share. In the

shareholder structure, there is also a financial investment fund -

Samarang Asian, holding ~5% rate. However, this foreign fund

has now divested all of its capital when DPR has announced

that the foreign ownership limit is 0%.

Business Result

In 9M.2021, DPR recorded VND 730 billion (+15% yoy) in

revenue and VND 160 billion in EAT (+23%YoY). The growth in

DPR's business results comes from (1) The price of rubber is more

favorable compared to 2020 – the global rubber price in 9M.2021

increased by more than 20% over the same period; (2) In 2020, the

epidemic suddenly affects business activities of enterprises.

Especially in the field of rubber exploitation and liquidation of

orchards.

Logo DN

Revenue

Rubber

Liquidation of

rubberplantations

Industrial

parks

Wood

Inside: Earning

Outside: Sales

56%

5%

39%

Share holder’s

GVR

Samarang Asian

Khác

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

200

400

600

800

1000

1200

1400

2018 2019 2020 2021E

Business Result



Catalyst

VCBS thinks that the speed of converting rubber plantation land to industrial land will be the determining factor in pricing

DPR’s enterprise value. From 2021, the estimated annual DPR compensation will be about 200 billion VND. In addition, DPR is

still waiting for the Prime Minister to approve the investment decision in the North Dong Phu Expanded Industrial Park project.

Logo DN Dong Phu Rubber Joint Stock Company – Catalyst

2021 2022-2030

Northern Dong

Phu Industrial Park

Joint Stock

Company

-

North Dong Phu

– Phase 2: 317 ha

South Dong Phu

– Phase 2: 480 ha

Compensation 230 ha 1,770 ha

Approve compensation and support

Land acquisition

decision

Get compensation

Tan Phu

Industrial Park:

59.6 ha

Tiến Hƣng 1

Industrial Park :

58.4 ha

Tân Tiến 2

Industrial Park:

57.7 ha

Tân Tiến 1

Industrial Park :

53.3 ha


Land acquisition

decision

Get compensation


Land acquisition

decision

Get compensation



Get compensation

Tiến Hƣng 1

Residential:

63.5 ha

Tiến Hƣng 2

Residential:

39.3 ha

Approve 1:500 Approve

compensation and support


Approve 1:500 Approve

compensation and support



Logo DN

Unit: bn VND 2020 2021E 2022F

Sales 1,137 1,234 1,277

+/- yoy (%) 10.1% 8.5% 3.5%

NPAT 211 304 355

+/- % -2.7% 43.8% 16.7%

EPS (VND/share) 4,430 5,952 6,947

RNAV 116,000

DCF 99,000

PROSPECT

VALUATION

107,500/CP

TARGET PRICE

+25% UPSIDE

Dong Phu Rubber Joint Stock Company – Valuation

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Nov-20

DPR Relative VN Index

CONTACT INFORMATION

136

Tran Minh Hoang

Head of Research

[email protected]

Tran Minh Hoang

Head of Research

[email protected]

Ly Hoang Anh Thi

Deputy Head of Research

[email protected]

Mac Dinh Tuan

Research manager

[email protected]

Le Duc Quang

Research manager

[email protected]

Ngo Duy Tai

Research manager

Oil & gas, fertilizers,

Chemicals

[email protected]

Le Thu Ha

Senior analyst

Macro & fixed income

[email protected]

Nguyen Hoang Minh

Senior analyst

Market strategist

[email protected]

Luong Van Hoan

Banking

[email protected]

Nguyen Thi Thuy Dung

Fishery, Consumer

goods,

[email protected]

Trinh Van Ha

Utilities

[email protected]

Dang Khanh Linh

Macro & fixed income

[email protected]

Hoang Tung Vu

Equity market,

commodities

[email protected]

Pham Hong Quan

Real estate, Seaport

[email protected]

Hoang Anh Tuan

Construction materials

[email protected]

Nguyen Dai Hiep

Real estate

[email protected]

Phung Thi Quynh Lien

Textile, Securities

[email protected]

Nguyen Nam Anh

Equity market,

Derivatives

[email protected]

Nguyen Hanh Linh

Banking & insurance

[email protected]

Nguyen Thi Thu Hang

Consumer goods,

Berverage

ntthang-

[email protected]

mailto:[email protected]






OUTLOOK 2022 - VCBS

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