Investment Recommendation

VGT_2020 Annual General Meeting Update_BSC Compan Update

Date

28/08/2020
Language

Tiếng Việt
Number of Downloads

136

Detailed report

Valuation

By August 18th 2020, VGT closed at VND 7,300 per share, equivalent to PE multiple of 8.4 which is in discout of 28% compared to 2 year median PE multiple of 11.7

Bussiness plan

In 2020, VGT set the target of revenue and profit before tax of VND 14,640bn (-27.3% YoY) and VND 381bn (-50.2% YoY), equivalent to EPS fw 2020 of 444 VND/share, PE fw 2020 of 16.46%/)

Risks

Covid – 19 pandemic discouraged the recovery of fashion orders in the second half of 2020

Risk that clients file for backruptcy

Business result update

Accumulated by the first half of 2020, VGT’s bussiness result reflected the difficult period of Vietnam’s textile industry. The company delivered VND 7,046 bn (-24.5% YoY) in net sales and VND 289bn (-21.9% YoY) in profit after tax.

Outlook for the second half of 2020 is still challenging as (i) mask and protective gear orders records a decline in bidding price (ii) factories do not have fashion orders in the fourth quarter.

Divestment of government’s ownership of VGT gets technical problems. In 2020 AGM, SCIC representatives confirmed that government’s policy is still to divest from VGT, however, process is facing technical problems related to increasing charter capital for VGT.