Investment thesis
• Vietnam international trade benefit from the recovery of target market such as China, The US, Europe. Export and import and container throughput have been strongly raising regardless of new wave of Covid-19 outbreak in May.
• Shortage of capacity not yet be solved in near future, which is expected to keep freight rate staying high level until 2022, according to the company.
• Haian West sent for chartering at the end of September at price of $30,500/day for 2 years contract. Haian Mind sent for chartering at the end of December at price of $32,500/day for 2 years contract.
• Domestic freight rate will be increasing about 15% to compensate for higher fuel cost.
• 2 more used vessels will be purchased and operated in domestic route in 2022. 2 new built vessels will be handed over in 2023.
• 2022 NPAT is forecasted at about 700 billion VND.
Risk
• We think investment of $25-$30 million/vessel in 2022 are high in the top cycle of the market. The efficient of the ships at high cost would be questionable.
Recommendation:
We keep target price to 80,100 VND per share as last report to reflect the fact mentioned above.