CSV - NEUTRAL - TP 40,000 - Solid Development

VALUATION

We recommend NEUTRAL for CSV with a target price of 40,000 VND/share, 21.9% upside from the price on 19/03/2021 with P/E method. This price equates to a target P/E of 10.0x .

FORECAST OF BUSINESS RESULTS

BSC forecasts that CSV's net revenue and NPAT will be VND 1,464 billion (+9.3% YoY) and VND 202 billion (+11.7% YoY). EPS fw = VND 4.052 and P/E = 8.0, P/B = 1.5.

CATALYST

§  Relocating the factory to Nhon Trach 6 Industrial Park to increase the capacity of NaOH by 50,000 tons/year.

§  Vinachem plans to divest from CSV from 65% to 51%.

TECHNICAL VIEW

§  Investors can buy the stock with the target price range at 40-40.5, consider to stop loss if the support level of 27.8 is penetrated.

RISKS

§  Fierce competition from domestic and Chinese competitors;

§  Cash dividend is expected to decrease during the factory investment period.

COMPANY UPDATE

§ Revenue and NPAT in 2020 reached VND 1,566 billion (-14% yoy) and VND 251 billion (-28% yoy), respectively, mainly due to a decrease in domestic demand, causing some key products such as NaOH hay H₂SO₄ to decrease in both terms of sales volume and selling price.

§  CSV plans to achieve revenue and NPAT of parent company in 2021 to reach VND 1,104 billion (+5% YoY) and VND 176 billion (-3% YoY), respectively.