Recommended stocks September 13: HSG, FMC and PVS

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Securities companies have just issued recommendations for a number of stocks before the session on September 13, including HSG, FMC and PVS.

In the third quarter of the fiscal year 2020-2021, Hoa Sen Group Joint Stock Company (HoSE: HSG) recorded net revenue of VND13,036 billion, profit after tax reached VND 1,702 billion, up 87% and 435% respectively compared to the same period last year.

Accumulating the first 3 quarters of the fiscal year 2020-2021, HSG has reached the revenue target and exceeded 125% of the set profit plan.

The strong growth in business results was due to an increase in selling price of about 30% over the same period, while output increased by 56%. Profit increased strongly thanks to a sharp decrease in interest expenses and investment income of 107 billion dong.

Vietnam Yuanta Securities Company (Yuanta) assessed that the export of steel products is showing positive signs while the domestic market is cooling down. Accumulated in the first 6 months, the total consumption of steel industry (including construction steel, galvanized sheet and steel pipe) increased by 17% over the same period, of which export volume increased by 72.5%.

For coated steel sheet alone, domestic consumption decreased by 5.4% over the same period, while export volume increased by 133% and accounted for 57.5% of total consumption of coated steel. Recently, China has increased export tax on iron and steel and reduced import tax on steel from August 1, 2021. This causes the domestic supply to increase, causing the domestic steel price to decrease.

However, Yuanta believes that the world steel price will still stay at a high level and it will be difficult to decrease sharply because the demand for public investment in other countries is very large. The evidence is that the recent reduction in steel supply from China has made steel prices in Europe and America still rising above the peak.

Accordingly, high steel demand from other countries will offset the decline of the Chinese market for HSG and the business remains attractive for the medium term.

In the market, HSG’s Stock Rating is at 96 points, so Yuanta maintains a positive growth rating of this stock. The price chart of HSG hit a 52-week high with trading volume remaining above the 20-day average.

At the same time, the price chart of HSG is still in a period of strong fluctuations in a positive direction, showing that the short-term uptrend can continue to extend to new highs with the short-term target of VND50,730/share. Therefore, Yuanta recommends that investors can maintain long and hold positions.

VDSC: Cumulative Recommendations for FMC

Viet Dragon Securities Company (VDSC) said that in August 2021, the shrimp export revenue of Sao Ta Food Joint Stock Company (HoSE: FMC) plummeted by 56% compared to the same period last year, due to low operating capacity in the context of strict separation in the South.

However, FMC has no longer applied the “3 in place” rule since the end of August and is expected to recover to normal capacity levels from mid-September.

In addition, VDSC expects an increase in selling price and a decrease in raw shrimp costs to improve FMC’s gross profit margin in the second half of 2021 (up 370 bps yoy, reaching 13.7%).

In the third quarter, this securities company forecasts revenue and profit after tax of FMC at 1,363 billion dong (down 16% yoy) and 61 billion dong (down 14%). For the whole year of 2021, VDSC forecasts revenue of VND 4,961 billion (up 12%) and profit after tax of VND 250 billion (up 11% over the same period).

Eps in 2021 is VND 4,212 and per projected in 2021 is 11.2 times. VDSC adjusted the target price increase by 16% compared to the latest valuation to VND47,000 per share due to a forecast increase in profit after tax in the period of 2021 – 2022 by 22% compared to the previous forecast thanks to earlier-than-expected recovery capacity and increased selling prices.

With an expected cash dividend in the next 12 months of VND2,000/share, the total return will be 10% based on the closing price on September 10. Therefore, VDSC recommends accumulation for FMC.

PSI: Hold recommendation for PVS

Accumulated in the first 6 months of the year, PetroVietnam Technical Services Corporation (HNX: PVS) achieved VND 5,670 billion in revenue, down 35% over the same period due to the impact of the workload of the segment. M&C and large sales of FSO/FPSO membranes in 2020.

However, thanks to profit from member companies/joint ventures reaching VND307 billion (up nearly twice over the same period) PVS recorded profit after tax of VND335 billion, down 18.7% compared to the first 6 months of 2020.

Thus, at the end of the first 6 months, PVS completed nearly 57% of the revenue plan and 67% of the profit plan.

In 2021, the revenue projected by The Petroleum Securities Company (PSI) can reach VND 15,237 billion, thanks to the second half of the year there will be more work with the main revenue segment – M&C, when there are new contracts and projects that are continuing to be implemented especially in the context of positive oil prices and high prices, contribute to boosting demand with oil and gas projects.

The FSO/FPSO segment will continue to be an active and stable segment in the second half of the year. The source of work is maintained with new contracts received and signed in 2 projects of supplying, installing and operating FLIDAR floating buoys for the Thang Long offshore wind power project (Thang Long Wind) with Enterprize Energy Group. (EE) and Gallaf phase 3 (package 05): design, procurement, fabrication, pre-trial, launch, transportation and installation, connection and trial run.

PSI recommends holding PVS with a 12-month target price of VND28,400 per share, corresponding to the 2021 projected P/E of 22.17 times with the prospect from oil and gas projects and the demand for FPO/FPSO oil storage is quite high in the second half of the year.

Source: – Translated by