BSR_The pioneer in Vietnam refinery_BSC_Vietnam company update_EN_ICB37722

Valuation
On 01st, March, 2018, BSR stock was listed on the UPcom and reached the ceiling price of VND 31,300 /share,equivalent to P/E FW is 11.64x and EV/EBITDA is 9.83x

Operating Result Forecast
We forecast that, net sales and net income of BSR will be VND 102,217 billion (+ 27%yoy) and VND 8,341 billion (-4% yoy), respectively; EPS of 2018 will be VND 2,690 /stock (the same as in our initial report).

Catalysts:
(1) Selling capital to strategic investors
(2) Crack spreads continue to stay at high level meaning high profit for BSR; the first two months of the year see a 3-2-1 crack spread at 17 USD/barrel
(3) Oil price, one of the primary factors determining petrol output price, is forecasted at an average of $59.67/barrel. Higher petrol prices bring higher absoluted profits for BSR thanks to 10% import tax gap.

Investment Risk:
(1) Crack spreads narrows down due to global surplus of refining products
(2) Competition increases after Nghi Sơn refinery go into operation
(3) Risk of not withdrawing full deposit at Oceanbank
(4) BSR-BF continual loss risk
(5) Exchange rate risk, interest risk

Updates
(1) Positive 2017 operating results. Net sales and net income reached VND81,334 billion (+10% yoy) and VND8,661 billion (+93% yoy) respectively.
(2) Crack spreads. 321 crack spreads reached $17.002/barrel, a slight decrease compared to 2017 average of $17.868/barrel. 
(3) Promising 2018 operating results as: (1) BSR has completed 2017 turnarroound (TA), and operates for the whole year of 2018; (2) Oil price is forecasted to continue staying high; (3) Advantage from 10% import tax gap.
(4) Strategic shareholder. There are two investors applying for selecting the Strategic Investor, they are PLX and National Indian Oil.Valuation
On 01st, March, 2018, BSR stock was listed on the UPcom and reached the ceiling price of VND 31,300 /share,equivalent to P/E FW is 11.64x and EV/EBITDA is 9.83x