Steel industry faces difficulties, construction prospects

Vietnam's economy is facing many challenges such as a large amount of corporate bonds maturing or the risk of economic recession and risks to the global financial and economic system. Given these unpredictable fluctuations, it is difficult to provide a comprehensive forecast of the stock market in the near future.

2023 steel industry development is difficult to build, but there are still risks of failure. Image 1 — Illustration

However, in a recent report, Agriseco Research also stated in its report some positive signals for our country's industry groups in the rest of 2023.

Real estate group's first-quarter profit decreased, expected to improve in 2024

Firstly, Agriseco Research believes that the profit outlook of the real estate sector in the first quarter may decline due to the relatively high profit base in the same period last year. At the same time, market demand also tends to reduce the impact of difficult developments on the economy, the difficulty of capital mobilization as well as high mobilization interest rates.

Although in the first quarter of 2023, the supporting information in the Government 's Decree and Resolution focused mainly on supporting the group of enterprises with social housing projects, the impact of this policy has not yet had a clear effect and has not been reflected on the business results of enterprises.

In the medium and long term, support and removal policies to promote the real estate market include: Decree 08 on privately issued bonds; Resolution 33 on deferring interest payments, reducing lending interest rates, and laws on land, housing, and real estate business expected to be issued from July 2024, which will help the real estate market show signs of improvement in 2024.

Banking industry profit declines, credit growth is low, asset quality declines

Profits in the banking sector may slow down compared to the same period last year as banks face difficulties due to falling demand for housing and high deposit and lending rates. Data from the State Bank shows that credit growth reached only 0.77% as of February 24, 2023.

In the context of a frozen real estate market, low liquidity, declining quality of mortgaged assets at banks, increasing bad debt, customers' ability to repay will also be affected.

Steel businesses face difficulties due to sluggish real estate and economic recession

For steel enterprises, which are directly affected by the difficulties of the real estate market, Agriseco forecasts that demand in the first quarter will weaken and many enterprises will suffer losses in the first quarter of the year.

Compared to the high profit base in the first quarter of 2022 with VND 9,856 billion of the entire steel industry, the results of the first quarter of this year will record a sharp decline. However, positive signals will appear from the positive impact when China reopens as well as the move to accelerate public investment disbursement in 2023.

Infrastructure construction group has positive outlook but still has potential profit-taking risks

Regarding the infrastructure construction industry, the government is taking many measures to promote the transport infrastructure construction sector with the move to start construction of 25 component project packages of the North-South Eastern Expressway Phase 2. Therefore, Agriseco gives a positive forecast for the prospects of this industry in the first quarter of 2023.

However, the high price of input materials also affects the progress of construction companies' projects in the first quarter of the year. Cash flow may also be affected. In addition, construction stocks have all increased by 100% - 200% compared to the bottom in November 2022, so the room for growth may be exhausted and there is a potential risk of profit-taking.

Oil and gas industry prospects are differentiated by industry group.

For the oil and gas industry, the profit outlook in the first quarter is relatively positive because after 2022, oil prices will start to increase and remain high, and prices for oil and gas services such as rig rental and storage rental prices are also growing well.

For the petroleum and gas processing and distribution industry, for manufacturing and processing enterprises such as Binh Son, the profit outlook is quite positive in the first quarter. For the group of petroleum distribution and retail enterprises, this group is affected by the world oil price movement and may be affected by the sharp drop in oil prices amid concerns about economic recession.

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