Vietnam Daily Market Recap July 23, 2024 -DGC, LPB & VRE Earnings Flashes

Market commentary: Stock slump accelerates

The VN-Index fell sharply in the afternoon on Tuesday, closing down 1.8%, or 22.83 points, to 1,231.81, while liquidity fell 14.2% compared to yesterday (VND18.1tn, USD754,000). The index has pulled back 4.8% over the last two weeks. The HNX-Index also dropped 1.6%, closing at 234.6.

Banks (-2.2%) were among the biggest laggards on the VN-Index today (taking away 13 points from the index), led by BID (-3.6%), MBB (-5.2%), CTG (-3.7%), TCB (-2.5%), ACB (-3.3%) and VPB (-2.1%). The total outstanding credit balance of the entire banking system increased by 6% YTD to VND14,300tn (USD595bn) in June while growing at only 2.4% YTD in May. Thus, more than VND400tn (USD16.6bn) was pumped into the economy in just one month, an increase of about 45% YoY. At a press conference on the morning of July 23, the State Bank announced operating results in 1H24, and Deputy Governor of the State Bank Dao Minh Tu said that bad debt in banks is a matter of concern. Contingent debts including on-balance sheet debt, debt sold to VAMC, and potential debt reached about 6.9% of total outstanding loan at the end of June. If we only count the on-balance sheet bad debt, it was 5%.

Chemicals (-4.9%) was the sector with the largest drop, led by DGC (-5%). DGC has fallen 10.6% over the last two sessions after 2Q24 business results stayed flat YoY. 2Q24 net revenue slightly increased 3.8% YoY, while GPM and net profit remained flat YoY in 2Q24.

STK (-7%) hit its floor price after recording negative 2Q24 business results. 2Q24 net revenue dropped 25.6% YoY, gross profit declined 84% to VND9.8bn (USD408,000). The bottom line recorded a net loss of VND55bn (USD2.1mn) in 1H24 due to a lower gross profit and higher FX loss.

FPT (+1.1%) was a bright spot after reporting good 2Q24 business results. Net revenue and PBT increased by 21.4% and 19.8% YoY, respectively, in line with the company’s guidance. EPS was VND2,514 per share, up 21.7% YoY. FPT’s Technology segment contributed 62% and 47% to revenue and PBT, which grew 27.3% and 22.3% YoY in 1H24, respectively.

Read our full report: HERE