In March, PYN Elite gained 1.4% supported by CTG, VCI and HDB. VN Index gained 2.0% helped by VIC and banking stocks. The Index held up well supported by local investors buying as bank deposits become less appealing with lower rates. The average daily trading value surged to $810m in 1Q2021, 4 times cf. 1Q2020. In 2M2021, there were 143K retail stock trading accounts opened, 5 times of that in 2M2020. We expect the trading value could reach a new high once the stock exchange fixes the order capacity constraint.
March Macro Data: According to Bloomberg consensus, Vietnam’s GDP growth is expected to reach 7.5% in 2021E, the 2nd highest in Asia only after China. Comparing the year 2021 with 2019, Vietnam’s economy would be 11% bigger, a growth that shines out in our comparison table which includes the US, Eurozone and other major Asian economies. Vietnam is able to grow with little borrowing and stimulus so far. Moody’s and Fitch revised up the outlook of Vietnam to “positive”. With some impact of a brief 3rd wave of Covid, Vietnam reported 1Q GDP 4.5%, retail sales +5.1%. PMI surged to 53.6 in March. Most banks in Vietnam guided a profit growth for 2021E in the range of 25 35%.
PYN Elite Stock of the Month: MBB is the 5th largest bank by loan book in Vietnam. The bank has a well-established presence in lending, consumer finance, insurance and brokerage. Its growth prospects of lending and fee income are strong. MBB’s style is known as “quality” and “prudent”.
The bank’s operating metrics such as NIM, CIR, ROE are better than peers, and the bank is more proactive in writing off bad debt and setting aside provision. In 2020, MBB has booked more than sufficient provision expenses, therefore we believe much less provision is needed in 2021, and its profit growth this year will be much higher than industry. MBB just surprised the market with its record high 1Q2021 profit, which doubled from last year. MBB trades at 1.51X 2021E PB, a discount to peers, despite better ROE and higher earnings growth.
Our updated portfolio and more information here.
PYN Elite Monthly Review – March.pdf