PVB_Back to the sea_BSC_Vietnam company update_EN

Valuation
We recommend TRACKING PVB. On 27/3/2018, PVB were traded at 15,900 VND/share, equivalent to PE 2018 = 17x and PB 2018 = 0.81x (2018 business results excluded the effect from Ca Rong Do project)

Forecast business results
In 2018, PVB set a revenue target of VND 287 billion and after tax profit of VND 28 billion. We note that the revenue of pipeline coating segment includes the works of the Ca Rong Do project planned to be carried out in Q4/2018, if we exclude the Ca Rong Do project (VND 80 billion) revenue, PVB reached VND 207 billion, EAT was VND 20 billion, EPS 2018 = VND 935 and BVPS = VND 19,639.

Catalyst
Winning the bid of Ca Tam project of Vietsovpetro (estimated revenue of VND 160 billion), implemented in the first six months of 2018.

Risk
• The delay of the Ca Rong Do project, Block B-O Mon, Nam Con Son 2 2nd phase
• Bad debt is about VND 20.9 billion of DK project
• NCS 2 1st phase has not been finalized

Company Update
Start profitable from core business. In 2018, PVB set a revenue target of VND 287 billion and after tax profit of VND 28 billion. BSC believes that the core business of PVB is positively changing as its 2018 pipeline coating segments revenue is projected at VND 240 billion (the number of 2017 was VND 7.37 billion, and VND 0 in 2016)
Winning the bid of Ca Tam project of Vietsovpetro. Due to the coating season usually around May-June-July, BSC believes that the high probability of project will be completed in the first two quarters.
The Ca Rong Do Project has many difficulties.Expected output value in Q4/2018 is VND 80 billion, the remaining VND 120 billion will be implemented in 2019. Most of the negotiation for the project has been completed. Recent information has been postponed
Prospects for future projects:
• Lot B, Nam Con Son 2 will be deployed 2019-2023
• The Su Tu Trang project is expected to begin at the end of 2019 (70km)
• The Golden Estuary project is expected to begin in 2020 (30 km)
• Exxon Mobil's Ca Voi Xanh project, PVB has provisioned the value of coating (88km, 36 inch)