Title BSC_Company Report BCC ICB 2353 (BSC 10 09 2014)
Report Type Phân tích công ty
Source BSC
Industry Industrials
Bussiness BCC
Detail Date : 24/09/2014
Total pages : 8
Language : English
File Type : .PDF
FileSize : 424 Kb
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Short Content

We continue to maintain a STRONG BUY recommendation in medium and long-term with BCC stock as previous report dated Dec 9th, 2013 (link), and the target price for 1 year investment term is 18,035 VND / share (an increase of 58.20% compared with the price on Sep 10th, 2014) based on FCFF valuation approach.

As positive investment view with HT1 and cement industry, we evaluate the profit picture as well as the prospect of BCC shares will be vastly improved from the year 2014. In addition, BCC shares will have improving profit results because of foreign exchange factors like HT1 and PPC. With EPS in 2014 is forecast at VND1,614, BCC shares are being traded at PE forward 7,06x, much lower than the PE of HNX 15,18x. In details:

(1) BCC will soon complete the allocation of foreign exchange losses in the construction phase of the new line: these losses of about VND98.29 billion on June 30th 2014, the company said it will allocate VND37 billion per quarter in the year 2014 in order to complete this work in early 2015. Excluding these amounts, the profit of BCC would have an immediate impact in 2014.

(2) BCC will have financial income from exchange rate differences with the remaining long-term debt by EUR discount: according to semi-annual audit report, as of the date June 30th 2014, BCC had long-term debt of EUR64.61 million. At present, many large banks have forecast the EUR continuing to decline; we estimate that BCC will have financial income of about VND73 billion in the year 2014.

(3) Domestic cement consumption of BCC is maintained stable and ranked the fourth (after Holcim, Ha Tien 1 and Nghi Son), according to the Vietnam Cement Association, domestic consumption accrued to 18/08/2014 of BCC reached 1.96 million tons, commissioned about 400 thousand tons of exports (cumulative to August) with USD55-60 USD / ton of cement and 35-37 USD / ton clinker. New market in Quang Ngai is developing fast with consumption of 30,000 tons/month (BCC began developing this market since the beginning of this year).

2014 earnings forecast: We expect net sales in 2014 will reach VND4,838 billion (+29.76% yoy), PAT of parent company will reach VND154.41 billion (the same period in 2013 was VND-21.62 billion), EPS 2014 will be VND1,614/share and surge to VND3,253/share in 2015 when the company fulfills its duty to allocate foreign exchange rate loss (EUR/VND is calculated under EUR/USD and USD/VND forecast by Credit Suisse Group, BNP Paribas and Standard Chartered).