Morning Brief

VN-Index keeps moving in uptrend, VTP, DGC

Technical Analysis

- VN-Index rose 0.68% yesterday from its MA5 support level (currently at 1,260) to set a fresh high for months, which helped to consolidate the upward trend. Its strong resistance level is 1,285-1,290.

Fundamental Analysis

DGC [Research Rating: M-PF]

- DGC expects to explore its mining site No.25 (phosphorus) by at least 100%, expanding its life by another 5 years to 2031. The mine expansion suggests earnings upside potential but for the long term (2027-2031). Nevertheless, the expansion could add USD100mn to DGC's equity value, per our estimate.

- Thanh Hoa province is disbursing for relocation of nearby villages (chlor-alkali), new development but the overall progress is in line with our expectation.

- DGC and other applicants will sign MOUs with Dak Nong Province during the next few months (bauxite-alumina) - we need to see more approvals to incorporate this project into our forecast.

VTP [Research Rating: SELL] Analyst meeting

- VTP guided for 2024 revenue of VND13tn (-34% YoY) and PBT of VND480bn (flat YoY).

- Management aims to boost overseas investment including (1) launching a delivery service business in Laos and (2) establishing representative offices in Thailand and China to study potential opportunities.

- VTP guided for 2024-2025 capex of VND3tn mainly including 1) spending on Building a logistics center in the city of Da Nang (capex of less than VND1tn, area of 10 ha; 2) Launching its delivery services in Laos and expanding its existing delivery services in Cambodia and Myanmar (capex of VND300-400bn in 2024)

- Vietcap RS currently has a TP for VTP at 34,600 but see potential upside to our 2024F forecasts, pending a more extensive review

Other news

- On 5/3/2024, the Prime Minister issued an official telegram directing the State Bank of Vietnam (SBV) on credit management to achieve the 2024 target credit growth as systemwide credit contracted in 2M 2023 (specific data not yet available). The key highlights included:

(i) Ensuring the attainment of the 2024 credit growth target.

(ii) Continuing to reduce lending rates.

(iii) Requiring banks to publish their average lending rates on their websites to facilitate comparisons among banks, thereby enhancing credit access for individuals and businesses.