VHC_NEUTRAL_TP 33,800 VND_Upside 14.7%_First positive signal from China

Valuation
We maintain our NEUTRAL recommendation and adjust the new target price to 33,800 VND/share, down 3.4% from the previous report due to factoring the changing condition of Covid 19 pandemic. 

2020 Business Forecast    
In 2020, BSC forecasts VHC's net revenue and profit after tax reach VND 8,544 billion (+ 8.6% YoY) and VND 941 billion (-20.2% YoY) (lower 1.1% and 1.5% respectively compared to the previous forecast). 2020 EPS is forecast at 5,119 VND/share, equivalent to PE fw 2020 of 5.7.

2020 Company Plan    
(a) Scenario A: Revenue and PAT are respectively VND 8,600 billion (+9% YoY) and VND 1,063 billion (-9.8% YoY).   
(a) Scenario A: Revenue and PAT are respectively VND 6,450 billion (-18% YoY) and VND 800 billion (-32.1% YoY).  

Business update        
1Q2020 business results fell by more than half. VHC's revenue and profit after tax reached VND 1,636 billion (-8.6% YoY) and VND 150 billion (-50.5% YoY), equivalent to completing 19% of the revenue plan and 14% of the plan PBT.
(a) By market structure: USA (VND 757 billion, -4% YoY), China (VND 73 billion, -68% YoY), EU (VND 272 billion, +11% YoY).
(b) By product structure: Fillet (VND 1,207 billion, -4% YoY), Added products (VND 197 billion, -11% YoY), Wellness products (VND 138 billion, +31% YoY).
Currently, BSC think that what makes it all the more important is the rate of recovery in consumer demand after lockdown is ended. By the end of April, China is the only in largest exporting markets that has lockdown ended. Therefore, we are watching closely the pangasius exported value to China and we are observing the first positive signals.