Title GMD_FOLLOW_TP 53.500_Upside 10.0_HIGH PROFIT GROWTH IN 2022 WILL NOT SUSTAINABLE IN 2023 _BSC_Vietnam company update
Report Type Phân tích công ty
Source BSC
Bussiness GMD
Detail Date : 10/10/2022
Total pages : 0
Language : English
File Type : .PDF
FileSize : 549 Kb
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Short Content

VIEWPOINT OF PRICE

We recommend LOOKING for GMD stock with a 2023 fair value of 53,500VND/share (Upside 10% from the 10/10/2022 closing price), based on the target P/E method = 16.25x. Target P/E valuation is based on (1) 2019 average P/E = 17.1x with GMD core earnings growth (+7-10% yoy), and (2) applied 5% discount on output risk in 2023. We recommend MONITORING due to concerns that output growth will slow down in the near future. Upside 10% mainly comes from GMD's share price, which has dropped sharply in the context of the general market's correction since May 2022.

FORECAST OF BUSINESS RESULTS

In 2022, BSC forecasts that GMD will record revenue = 3,667 billion VND (+14% yoy), NPATMI = 953 billion VND (+56% yoy), equivalent to EPS FWD = 3,161 VND/share, P/E FWD = 15.4 x.

In 2023, BSC forecasts that GMD will record revenue = 3,797 billion VND (+4% yoy), NPATMI = 990 billion VND (+4% yoy), equivalent to EPS FWD = 3,286 VND/share, P/E FWD = 14.8 x, based on the following key 2023 assumptions:

Cargo volume +1.3% yoy in 2023, contributed by NDV +10% yoy (assuming NDV 2 will receive 1 service from Q3.2022), Nam Hai -4%, Nam Hai Dinh Vu - 4% yoy and Phuoc Long ICD –Binh Duong +2% yoy. Output growth rate is lower than 2022 at +5.8% yoy due to slowing global economy and high competition in Hai Phong area.

Service prices increase by +1% yoy in 2023.

Assumed Logisitcs revenue + 10% yoy in 2023 – equivalent to the average growth of Logistics segment in the past.

In 2023, gross profit margin = 35.9%, down 0.3 percentage points compared to 2022 based on assumption of outsourcing service cost/SL – 3% yoy due to cooling oil price, depreciation expense + 100 billion VND due to the operation of NDV 2 project.

Interest expense = 161 billion VND (+44% yoy) in 2023 based on the assumption of a new loan of 750 billion VND to invest in equipment for phase 2 users, interest rate +1 percentage point. Profit from CTLK = VND 555 billion (+10% yoy), mainly contributed by GML project (205/232 billion VND) and SCS (222/244 billion VND).

BUSINESS OUTLOOK 2023: In 2023, profit growth will slow down due to (1) NDV 2's filling difficulties due to global economic downturn, high competition in Hai Phong returning and (2) GML 2 project not yet going. into operation, while, phase 1 is at full capacity.

BUSINESS UPDATE

In 1H.2022 GMD recorded revenue = 1,858 billion VND (+29% yoy), NPATMI = 562 billion VND (+95% yoy). In which, port revenue = 1,536 billion VND (+24%) thanks to: Service price +19% yoy, mainly from the increase in service price at the yard due to lack of empty containers, Output +5% yoy. 2. Revenue from logistics segment = VND 322 billion (+61% yoy), due to (1) increase in Logisitics service price, (2) expansion of business activities

Profit from CTLK +143% yoy, increased mainly from Gemalink, SCS. In Q2.2022 Gemalink - 21% qoq, while output + 1.3% qoq, due to increased cost of outsourcing services due to rising oil prices