BSC - Company report UNI ICB 6500 BSC 31 07 2015

We recommend “Strong buy” in medium and long term with target price of VND 14,488 / share, up 29.36% in comparison to the closing price on 31/07/2015. UNI shares are traded with PE FW = 8.39x, a relatively low level compared to PE of telecommunication sector of 10.76x and PE of the real estate sector of 15.49x. A positive point of view on the prospects of UNI based on the arguments:

UNI developed Real Estate in Phu Quoc from 2009, Capital structure uses low level of Debt. Due to the traditional business line of Telecommunication device distributing increased competition fiercely, the profit earnings depend on the bidding projects; thus, UNI has turned to invest real estate in Phu Quoc with 3 existing projects (1) 83 land lots in Duong Dong town, (2) 11.3 ha in Ham Ninh and (3) 61 ha in Cua Can. The projects will be realized in profit in the period 2015-2020. Besides, the borrowings / total assets ratio was 1.71% and total liabilities / total assets ratio was 11.88% (Q2/2015) which is very safe compared to the average ratio of Real estate sector (17.99%).

The unique listed company has land product in Phu Quoc with certificate of land use right. Besides UNI, listed companies with the projects in Phu Quoc have to mention as VIC, CEO, LDG; however, providing products were kinds of hotel, villa - apartmen resort, golf course with land use period of 50 years. Therefore, UNI products have a cetain advantage, especially suitable for investor purchasing land for business purposes. In addition, the land products were kinds of permanent residential land, had land certificate (Decree 43/2014/ND-CP and Law 45/2013/QH13).

Business Results will improve from 2015 because of recognition of revenues and profits from Phu Quoc real estate. In 2015, UNI has opened Duong Dong project selling 83 land lots, and customers will receive the certificate of land use right in the middle of Aug 2015. The revenue and profit of this project are expected to be record in 3Q2015. We estimate the profits earned from Duong Dong project at around VND 14 billion.

We estimate that net revenue of UNI will reach about VND 86.91 billion in 2015 (+3.27 times compared to net revenue in 2014); the profit after tax was estimated at VND 18.92 billion, equivalent to EPS 2015 = VND1,334/share.