ANV_BUY_TP 38,700VND_Upside 20__The Beginning of a New Cycle_BSC Company Update

VALUATION

We recommend BUY ANV with fair value of VND 38,700/share, +20% from June 27, 2021 based on P/E valuation method with target P/E 2021 = 11x to reflect on (1) the expectation of a strong recovery of ANV at the end of 2021, (2) the catalyst to penetrate the US market and (3) the recovery point of the pangasius industry cycle.

FORECAST OF BUSINESS RESULTS

BSC forecasts revenue and net profit in 2021 at VND 4,792 billion (+39.4% YoY) and VND 465 billion (+130.1% YoY), equivalent to EPS FW2021=3,520 VND/share, P/E FW2021=9.1x with assumption : (1) Consumption volume in markets increased sharply, of which: China 31,255 tons (+70% YoY), Thailand 14,003 tons (+20% YoY) and (2) Export price of pangasius fillet increased by +13% YoY, of which: China USD 2.04/kg (+15% YoY), Thailand USD 1.69/kg (+15% YoY).

INVESTMENT THESIS

§  Profit increased 2.3 times over the same period thanks to compound growth: Demand recovered in the context of difficult to increase supply in the short term.

§  Potential for export to the US market.

TECHNICAL VIEW (For short term investors)

§  Investors can buy stocks and consider taking profits when ANV approaches the price range of 34.5, consider cutting losses if 29.5-30 is penetrated.

RISKS

§ The complicated situation of COVID-19 reduces the demand for pangasius consumption.

§ Logistics disruption increases selling costs.

COMPANY UPDATE