Potential stocks of Vietnam endorsed by financial institutions

According to VNeconomy, Mirea Asset Vietnam Securities (MAS) has just launched a recommended list of 10 potential stocks of Vietnam in 10 industry groups with good chance for price increases in the next 12 months. There are stock codes with potential price increases of up to 65%.

These stocks include: VPB target price 23,800 VND/share, an increase of 30%. In addition to the proposal to transfer weak credit institutions, the Shareholders' Meeting had a few key points as follows: 1) VPB intends to continue the cash dividend payment of 10% for 2023, similar to 2023. 2022; 2) for 2024, the bank sets a credit growth target of 25% (2023: +25.2%); and 3) pre-tax profit is expected to recover strongly with a growth rate of about 114%.

Among the banks potential stocks of Vietnam tracked, VPB is expected to see the most positive profit change in 2024 following poor results in 2023. GAS has a target price of 98,300 VND/share, a 33% increase, with major projects like the Thi Vai LNG terminal and Block B O Mon gas pipeline set to begin operations in 2024 and late 2026, respectively. For 2024, estimated revenue is 92,926 billion VND, with a profit after tax of 11,756 billion VND.

Long-term growth potential is bolstered by these projects, expected to significantly boost revenue. Additionally, PVGAS has signed two gas purchase and sale agreements (GSPA) for marginal fields in the Southwest in early 2024. These projects will help address the escalating gas shortage in the Southwest region, exacerbated by rising costs of importing gas from Petronas to meet the Ca Mau cluster's needs.

BWE, one of potential stocks of Vietnam, has a target price of 50,600 VND/share, an 18% increase. For 2024, revenue is projected to rise by 7.1% year-over-year to 3,776 billion VND, with net profit expected to recover to 757 billion VND, up 12.3%. From 2024 to 2028, annual revenue and net profit growth are forecasted to remain stable at 6.6% and 15.6%, respectively.

NT2 has a target price of 25,200 VND/share, a 13% increase. Peak electricity generation and contracted output will occur in May, September, and October 2024, accounting for 67% of the annual total. Expected 2024 sales are 4,977 billion VND, with a profit after tax for parent company shareholders of 157 billion VND. The cash dividend rate is estimated at 10%.

VRE has a target price of 32,100 VND/share, a 41% increase. As of December 31, 2023, cumulative undistributed profit after tax stands at 16,476 billion VND. Between 2024 and 2027, VRE plans to develop an additional 800,000 square meters of commercial space. For 2024, VRE targets revenue of 9,500 billion VND (-2.9%) and a profit after tax of 4,420 billion VND (+0.2%).

VHM has a target price of 63,000 VND/share, a 53% increase: VHM is trading at a P/B ratio of 0.96, nearly 72% lower than its 5-year average P/B of about 3.5. The stock price reflects concerns about (1) the potential slow recovery of the real estate market, (2) increased leverage in recent quarters, and (3) increased transactions with VHM's related parties.

HHV has a target price of 21,250 VND/share, a 65% increase: MAS forecasts the parent company's revenue and PAT for 2024 to be 3,231 billion VND (+20% YoY) and 408 billion VND (+27.5% YoY), respectively, with an EPS of 992 VND.

For Q1 2024, HHV reported revenue of 690 billion VND, up 28%, and a profit after tax of 114 billion VND, up 37%. BOT service revenue accounts for 69%, and the construction segment accounts for 28%. The company plans to increase its charter capital by 41.3% to 5,816 billion VND from the current 4,116 billion VND through stock dividends, private placements, and offerings to existing shareholders.

The raised capital will fund two expressway projects starting construction in 2024: Dong Dang - Tra Linh and Huu Nghi - Chi Lang. In March 2024, HHV announced the expected contract value for the Dong Dang - Tra Linh Expressway Project: 1) 836 billion VND for the EC contract under package EC01 (KM0+000 - KM38+000) and 2) 86 billion VND for the EPC contract. The expected implementation period is from contract signing to before December 31, 2026.

HPG has a target price of 36,400 VND/share, a 28% increase, due to (1) its leading position in the industry with a competitive advantage in HRC production, (2) stabilization of steel prices since Q1 2024, and (3) the resolution of high-cost inventory, which will drive profit margin growth in the upcoming period.

With high-cost inventory processed in Q1 2024, profit margin growth will be evident in the next period. Steel prices have improved above the 3-year average since Q4 2023, and the current price level is expected to be maintained due to strong domestic fundamentals and export opportunities.

Additionally, the current decline in raw material prices for iron ore and coking coal (which account for approximately 70% of input costs) will also support profit margins. With HPG having depleted most of its high-cost inventory in previous quarters, profit margins are expected to rise and operating efficiency to improve in the following quarters of 2024.

One of many potential stocks of Vietnam, VNM has a target price of 79,500 VND/share, a 22% increase. For 2024, VNM plans for revenue of 63,163 billion VND, a 4.4% increase, and a profit after tax of 9,376 billion VND, a 4% increase. The total annual dividend is set at 38.5% of par value, equivalent to 3,850 VND/share. Using the discounted free cash flow (FCFF) method with key assumptions of a 11% WACC and a 3% growth rate post-2034, MAS values VNM shares at 79,500 VND.

Finally, MSH has a target price of 48,400 VND/share, a 6% increase. MSH's 2024 revenue is forecasted at 4,800 billion VND, a 5.7% increase, with a profit after tax of 335.2 billion VND, up 36.7%. Using the FCFF method with a required profit margin of 14% and assuming long-term growth of 0% post-2034, MAS values one of potential stocks of Vietnam - MSH shares at 48,400 VND.

According to the latest report from BIDV Securities (BSC), the analyst team has issued a strong buy recommendation for Masan Group stocks, one of many potential stocks of Vietnam, with a medium-term target price of 100,000 VND/share, representing a potential 36% increase from the closing price on May 24, 2024.

In the first quarter, MSN's core business saw a 6% year-over-year revenue growth and a 3.1-point increase in operating profit margin. The outlook is positive due to several factors at the end of Q1 and the beginning of Q2 2024. Masan High-Tech Materials Joint Stock Company (MSR) is expected to improve its business operations with the resumption of blasting operations and a significant investment of over 6,000 VND from Bain Capital. Additionally, dividend flows from Masan Consumer Goods Joint Stock Company (MCH) and Vietnam Technological and Commercial Joint Stock Bank (TCB), along with information regarding the divestment of non-consumer businesses, are expected to help reduce MSN's financial leverage.

Based on data from 2019 to 2023, BSC reports that MSN has established a comprehensive ecosystem within the consumer value chain, encompassing MCH, WCM, MML, and PHL, and has achieved a CAGR revenue growth of 20% during this period.

Echoing BSC's view, many other financial institutions have also set target prices for MSN shares, predicting potential price increases of 29%-35% compared to the current market price. For instance, HSBC recommends buying Masan Group stock with a target price of 98,000 VND/share, while VCI forecasts a target price of 102,800 VND/share. In the same retail consumption sector, stocks like MWG and FRT have surged since the beginning of the year, whereas Masan Group stock have not shown significant growth. Given recent positive developments and the current market price, Masan Group stock are deemed to not fully reflect the intrinsic value of the business. Among the potential stocks of Vietnam, Masan Group stands out due to its promising prospects.