Some stocks to watch on June 14

Stock market commentary June 14: VN-Index may continue to increase

Positive recommendation for SCS stock

Vietcap Securities Company (VCSC) maintains its positive recommendation on Saigon Cargo Service Corporation (stock code SCS) despite raising its target price by 17% as SCS's stock price has increased by 20% in the past 3 months.

VCSC’s higher target price comes from VCSC’s updated valuation model to mid-2025, higher 9%/7% forecast for total throughput in 2024/25 due to positive 4M2024 results, valuation contribution from LTA Cargo Terminal 1 (LTA1) as VCSC records SCS’s potential 20% stake in the project in VCSC’s valuation model. These factors offset our 3% YoY ASP decline in 2024 (vs. previous forecast of 12% YoY) due to VCSC’s forecast of lower international cargo ASP this year and SCS’s discount to Qatar Airways to attract the airline to become an earlier customer, arriving in February 2024.

Some stocks to watch on June 14 (Illustration: KT)

VCSC forecasts international throughput (~90% of total SCS throughput) to increase 50%/12%/8% YoY in 2024F/25F/26F before declining 22% YoY in 2027 as LTA1 comes online.

Buy recommendation for ACB stock

KB Securities Vietnam (KBSV) expects Asia Commercial Joint Stock Bank (stock code ACB) to be able to complete the assigned credit limit of 16%, in which, lending to large corporate customers is expected to continue to increase in scale and contribution ratio.

In the long term, KBSV assesses that ACB will continue to focus on retail lending activities thanks to the bank's inherent advantages and experience with this customer group. The recovery of individual customer credit demand is expected to be better in the second half of 2024 in the areas of consumer lending, business lending, and home loans.

KBSV believes that lending interest rates have bottomed out and may recover slightly from Q3/2024. On the other hand, deposit interest rates are showing signs of increasing again, but it will take time to reflect in CoF. The impact on increasing CoF will be less than the improvement of IEA when KBSV believes that interest rates are unlikely to increase as strongly as in the first half of 2023. The bank's NIM in 2024 is expected to reach 3.95% - down 4bps compared to the old forecast due to the shift in lending to corporate customers with lower NIM than lending to individual customers.

The bad debt coverage ratio continued its downward trend and fell to 78.6% at the end of the first quarter of 2024, creating more provisioning pressure for banks from the first quarter and expected in the following quarters to strengthen the reserve buffer. However, KBSV sees that the decline in asset quality is a scenario occurring at all banks, not just ACB, and even the decline at ACB is still positive compared to the whole industry. KBSV still highly appreciates ACB's asset quality as being among the top in the industry thanks to its good customer base and relatively cautious risk appetite.

KBSV adjusted its forecasts for non-interest income (NOII), NIM and bad debt to reflect current developments. The new target price after dividend adjustment is VND30,200/share, and recommends buying ACB shares with a potential upside of 23% compared to June 12.

Hold recommendation for DPR stock

According to Agribank Securities Company (Agriseco), in the first quarter of 2024, Dong Phu Rubber Joint Stock Company (stock code DPR) recorded revenue of VND 186 billion, up 4% over the same period in 2023 and profit of VND 62 billion, up 0.6%. As of March 31, 2024, DPR has a healthy financial situation, no outstanding loans, cash balance accounting for 36% of total assets. DPR maintains a policy of paying regular cash dividends of 15-30% per year. DPR is currently trading at a P/B of 1.28x, equivalent to the industry average.

On June 27, DPR will hold the 2024 Annual General Meeting of Shareholders, in which the plan (parent company) for 2024 revenue is VND 843 billion (up 9% compared to last year), after-tax profit is VND 222 billion (up 23%). The estimated rubber selling price will increase from the 2023 level of VND 34.5 million/ton to VND 36.5 million/ton, equivalent to an increase of 6% yoy. DPR is submitting a plan to distribute 2023 profits at a rate of 15% in cash and continue to maintain the 15% dividend payment policy in 2024.

Agriseco expects DPR's business results to grow thanks to the rubber segment growing in both price and output. Rubber selling price in 2024 is forecast to increase compared to the same period following the increase in world prices in the context of a shortage in natural rubber supply. Consumption output is forecast to be positive thanks to improved demand in the automobile and tire manufacturing industry, especially in the Chinese market. The rubber sector accounts for more than 70% of DPR's total revenue, and it is expected that selling price and output will boost business results growth; Rubber liquidation revenue is forecast to increase with the liquidated rubber area of about 450-500 hectares; Profit in 2024 is forecast to grow thanks to income from compensation for Binh Phuoc land in Tien Hung 1 and 2 residential areas, estimated at VND 100 billion.

DPR is currently managing the two industrial parks of Bac Dong Phu and Nam Dong Phu, which have been over 95% occupied and have plans to expand these two industrial parks to a total scale of nearly 800 hectares. The Bac Dong Phu Industrial Park expansion project has completed legal procedures and is awaiting government approval. DPR is expected to record revenue from industrial park rentals in 2025 if the project is approved for investment in 2024.

In 2024, DPR's business plan is expected to improve mainly from the rubber sector and land compensation income. DPR plans to maintain its 15% dividend payment policy in 2024 thanks to its healthy financial situation. In the long term, DPR has potential thanks to the two expanded industrial park projects of Bac Dong Phu and Nam Dong Phu, which, when implemented, will contribute greatly to the industrial park revenue. In addition, the rubber stock group is expected to benefit from the greening policy and the development of the Carbon credit market.

DPR is currently trading at a P/B of 1.28x, equal to the industry average. The stock price continues to trade in a short-term uptrend. Therefore, Agriseco recommends holding DPR shares with a target price of VND50,000/share (Upside 10% from the current market price).

Source: https://vov.vn/thi-truong/chung-khoan/mot-so-co-phieu-can-quan-tam-ngay-146-post1101398.vov