PYN Elite NAV dropped 0.19% in August as our banks retreated after a rally of 43% in the first 7M2021. VN Index advanced 1.64% MoM, supported by GVR, HPG, VJC. After VN Index approached the 1,380 level, the market witnessed a strong selloff under retail investors’ profit-taking and continuous foreign outflows, particularly from ETFs. However, most securities firms kept their forecasts that VN Index would reach the 1450-1500 level this year. The average daily trading value on HSX returned to USD 1 bn (+13.4% MoM).
Macro: August macro was bleak due to the prolonged lockdown in southern Vietnam under Covid-19 pressures. Industrial output slid 7.4% YoY. PMI dropped at the steepest pace to 40.2, indicating the third month of contraction. Exports were 5.4% YoY as supply chain disruptions worsened, while retail sales were 39.1% YoY. Inflation was the only bright spot, up 2.8% YoY, well below the government target of 4%. Consensus forecasts for 2021 GDP growth stayed quite positively within the 4.5% – 5.5% range after recent reviews.
PYN Elite stock of the month: Nam Long (NLG) has successfully closed the private placement of 60 million shares, in which we participated, to finance their key projects and land bank acquisition. By the offer, NLG was priced at only 10x their 2022 fully diluted P/E with a one-year lockup. This accomplishment reaffirms the company’s solid fundamentals and attractive valuation. NLG is currently trading at P/B 2.0, much lower than its peers’ average. NLG has also secured strategic cooperation with their long-term Japanese partner in a 45 ha project in Dong Nai, expected to launch in 2022. For the 2021-2024 period, we forecast that NLG will achieve a robust CAGR for a net profit of 21%.
PYN Elite Monthly Review.pdf