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レポート名 HBC-Tracking- TP 20,100 VND-Expectation to debt recovery-29032019
レポート類 Phân tích công ty
ソース BSC
会社 HBC
ディテール 日付 : 29/03/2019
総ページ数 : 8
言語 : English
File Type : .PDF
FileSize : 762 Kb
ダウンロード: 158
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要約

Valuation

We recommend Tracking HBC with a target price of  VND 20,100/share based on the P/E method, with a target P/E of 6.5x (P/E median of construction VN = 7.6x). Closing price HBC on 03/29/2019 =  VND 18,650/share - P/E T12M = 5.7x - P/B T12M = 1.3x.

Forecasting business results 2019
We forecast that HBC's Revenue and NPAT FY2019E will reach VND 19,404 billion (+6.6% yoy) and VND 614 billion (-4% yoy), equivelent to EPS FW 2019 =  VND 3,099/share (deducted 5% B&WF), P/E FW = 6.3x and P/B FW = 1.2x.
Catalysts
1. HBC prepares to issue shares to strategic partners.
2. The company actively recovers debts to reduce customer receivables.

Risks
1. Construction industry will continue to face difficulties due to fierce competition.
2. Liabilities and short-term receivables increased causing cash flow from operation activities was negative.
3. Trend of shifting to property-medium segment makes construction gross profit margin shrink.

Update 2018 business results
EAT dropped sharply because of lower gross margin and higher interest expenses. Net revenue reached VND 18,203 billion (+13% yoy), EAT reached VND 627 billion (-27% yoy), equivelent to EPS 2018 = VND 3,246/shares (-51% yoy). Value of new and backlog contracts in 2018 reached VND 25,852 billion (+26.2% yoy) and VND 25,524 billion (+20.3% yoy).

The big risk of HBC coming from receivables has increased sharply. We note that short-term receivables reached VND 11,104.5 billion (+20.8% yoy) mainly come from (1) Short-term receivable of customer reached VND 6,140.9 billion (+90.4% yoy); and (2) Receivables of construction contract schedule is VND 4,107.4 billion (-12.1% yoy). (3) Provision for bad debt in 2018 is still VND 63 billion, equivalent to 10.06% of NPAT, HBC continues to make provision for bad debt nearly VND 387 billion (+19% yoy).

Raising short-term debts make interest expenses increase sharply. HBC's short term debts reached VND 12,967 billion (+ 12.45% yoy), with a financial leverage ratio of 4.4x, due to short-term debt increased VND 12,292.9 billion (+12.7% yoy). Thereby, interest expenses increased sharply to VND 306 billion (+15% yoy), causing net margin decrease to 3.4% in 2018 (5.4% in 2017). In Jan 2019, thanks to collect debt quickly, HBC's total outstanding loans reduced to VND 3,868 billion (-10.9% yoy). Thereby, we appreciate HBC positively if it continues to reduce the debt ratio in 2019, which will reduce the interest expenses to help net margin improve.

HBC also recently announced the private placement of shares for foreign partners to be completed in Q2/2019. HBC expects to issue an additional 25 million shares about VND 500 billion of value, we assess that new capital will help HBC restructure corporate finance  partly.