CSV_NEUTRAL_1Q2020 Business update_BSC Company Update

Valuation
By May 12 2020, CSV closed at VND 20,150 per share, equivalent to PE valuation of 4.3, the lowest historical valuation.

FY 2020 Company Guidance
CSV set the target for revenue of VND 1,643bn (+4.9% YoY) and for PBT of VN 257bn (-18.3% YoY). EPS 2020 is VND 4,652 per share, P/E fw is 4.3. This target does not take into account of the impact of Covid pandemic.

Catalyst                       
•    Factory relocation to Nhon Trach 6 Industrial Park
•    Divestment of Vinachem down to 51% of ownership in 2020

Investment risks    
•    Low demand of chemical products amid corona virus crisis
•    Decrease in cash dividents  

Business update
In 1Q 2020, revenue suffered just a 6 percent fall in sales to VND 329 bn but profit before tax fell more than 18% percent to VND 59 bn.
Volume of sale in 1Q 2020 slumped due to low demand. Liquid soda volume fell by 9.7% YoY, hydrogen chloride fell by 19.2% YoY, sulruric acid fell by 13.4% YoY.
Sale price of all major products also record a decrease. Liquid soda price fell to VND 3.7mn/ton (-9.7% YoY), hydrogen chloride down to VND 1.9mn/ton (-19.2% YoY), sulfuric acid down to VND 1.9mn/ton (-13.4% YoY).
Factory relocation has been approved by Vinachem. CSV will hire independent consultancy party to do feasibility study report
Vinachem expects to divest from CSV down to the 51% of ownership in 2020. Currently, Vinachem has valuation done by third party.