VSC_BUY_Opportunity to Change Positions

VALUATION PERSPECTIVE

We recommend BUY for VSC shares at a target price of VND 77,000 determined by a combination of FCFE and P/E valuation models to reflect (1) The recovery in post-epidemic loading output and (2) The expectation of being approved for investment in two deep-water port projects.

FORECAST BUSINESS RESULTS

BSC forecasts VSC net revenue and profit after tax & non-controlling interests to reach VND 1,857 billion (+10% YoY) and VND 309 billion (+29% YoY)  EPS FW2021 = VND 5,181/SHARE respectively which is equivalent to P/E FW2021 = 12.3x with the assumptions that VSC loading and unloading output reaches 1,137,836 TEU (+10% YoY).

INVESTMENT THESIS

§  Commodity output rises 10% YoY as global economy recovers

§  Long-term growth drivers, triple capacity from deep-water port projects

TECHNICAL PERSPECTIVE (For short-term investors)

§  Investors should continue to monitor and consider opening positions if they exceed 68, taking profits when the stock nears 73. Cut the loss if the support level is broken at 61.

RISKS

§ COVID-19 restricts global trade.

§ Deep-water port investment projects are not approved.

BUSINESS UPDATE