Vietnam wants to grow film industry

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Vietnam’s movie business is growing quickly. New theaters are being built across the country. Young filmmakers are entering the market.

In the past, movies about Vietnam centered on Hollywood’s ideas about the Vietnam War. They starred American actors with Vietnamese playing background parts. But this is changing.

​Academy Awards submission

Ngo Thanh Van became an international movie star with her part in the latest version of Crouching Tiger, Hidden Dragon. Now she has turned to directing. Her newest film is called The Tailor. It will be Vietnam’s official entry for next year’s Academy Awards in the foreign language category.

“Making movies in the Vietnamese market is a risky business, not just for me,” Van told the internet news site Zing. “But it is because it is difficult that I want to put all my heart into doing it.”

Movie poster for the Vietnamese film Co Ba Saigon, or The Tailor.

Increasing demand

Increasing interest is coming from both Vietnamese filmmakers and Vietnamese movie-goers. The theater group CGV reported a 30 percent increase in profits for 2017 compared to the year before. CGV is just one company that shows movies, but it controls nearly half the movie theaters in the Southeast Asian country.

Critics call it a monopoly, but its market position shows the industry’s growth. Besides the South Korean-owned CGV, other movie theater companies in Vietnam include BHD, Galaxy, Skyline, Cinestar, Cinebox and Lotte.

The theaters are trying to meet demand for movies in an economy that is expanding at a rate of nearly 7 percent every year.

Vietnam’s growth has caused companies like Netflix, and another streaming service, iflix, to get into the Vietnamese market.

The investment advice company Investar wrote in an analysis of the film industry: “When a country develops, the next developmental need will be entertainment, so it is important to capture this demand.” It also said that money is being invested in the business.

Diaspora comes home

The growth of Vietnamese movies comes as more Vietnamese and Vietnamese-American actors appear in international films. The Netflix movie To All the Boys I’ve Loved Before stars a Vietnamese-American born in the Mekong Delta area. In Downsizing, actor Matt Damon performs with Hong Chau, who uses a thick Vietnamese accent but earned a Golden Globe nomination.

And people with Vietnamese ancestry are returning. American actors, directors, producers and film editors have returned to Vietnam in recent years, like Johnny Tri and Charlie Nguyen.

Filmmakers from France, a former colonial ruler of Vietnam, have also arrived, such as two French-Vietnamese who set up an animation business in Ho Chi Minh City.

Performer Nguyen Cao Ky Duyen said on her Facebook page, “If you support Vietnamese movies, the movies will be profitable, and investors will put in more money.”

She added that Vietnam has plenty of beautiful areas to film movies.

Hong Chau and Matt Damon in the film “Downsizing.” (Paramount Pictures)

A good place for movie-making

Kong: Skull Island is a good example of a successful movie filmed in Vietnam. It is the latest version of the famous King Kong movies. It includes pictures of the green waters of Halong Bay, a UNESCO World Heritage place.

The film also signaled an important change in movies in Vietnam. The film takes place during the Vietnam War. But, it celebrates the performances of Samuel L. Jackson and Brie Larson and the natural beauty of the country.

Vietnamese-language films are being watched around the world. They include films like Cyclo and The White Silk Dress. Local people hope those are just the start of a growing trend.

“We know that Vietnamese movies are not yet equal with neighboring countries, because we are still in a period of opening up,” said Ky Duyen. “But that does not mean that we will not catch up.”

India has Bollywood. Nigeria has Nollywood. Vietnam may soon develop its own version: Vollywood.

According to a report on VOA

 

Vichai Srivaddhanaprabha, Leicester City Owner confirmed dead after helicopter crash

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Vichai Srivaddhanaprabha, owner of the English Premier League soccer club Leicester City, was killed Saturday night when his helicopter crashed in a ball of flames outside the stadium, the team confirmed on Sunday.

The soccer club announced late Sunday “with the deepest regret and a collective broken heart” that none of the five on board survived.

The helicopter crashed about 8:30 p.m. outside King Power Stadium following Leicester City’s game against West Ham United. One of Mr. Vichai’s two daughters, Voramas Srivaddhanaprabha; two pilots; and an unidentified fifth person were also believed to have been on board, news media reports said.

With little official information released by Mr. Vichai’s family, the soccer club or the police for more than 24 hours after the crash, fans had filled the void with hope and expressions of gratitude.

On Sunday, a steady stream of fans — first dozens and then hundreds — headed toward the King Power Stadium, bearing flowers, scarves and Leicester’s Royal Blue jerseys, and laying their tributes carefully at an impromptu shrine outside the stadium.

Against the wall rested an image of Ganesha — a testament to the substantial Hindu population in the city, about 102 miles northwest of London — and a small statue of Buddha — a tribute to Mr. Vichai’s faith.

Rosemary Page said she couldn’t stay at home on Sunday. Since she and her husband, Andrew, heard reports of the crash, she had been unable to sleep.

“You just want to get more and more information,” Ms. Page, 61, said outside the stadium. “It doesn’t feel real. He was the best owner this club has ever had.”

To many, the crash felt personal. Mr. Vichai, a Thai billionaire who founded the duty-free retail giant King Power International and controls part of AirAsia, the region’s biggest discount carrier, has been cherished by fans ever since he bought the team in 2010 for 39 million pounds.

It had languished in the second-tier Championship. He then turned it into a Premier League champion by 2016 — the first title in its 132-year history.

Among the tributes at the King Power Stadium were photos of Mr. Vichai at the victory parade and a T-shirt, printed in the aftermath of the 2016 victory, reading: “Champions of England, we know what we are.”

His popularity was not simply rooted in his success, however.

“He did so much in the community of the city, gave so much to charity,” said Nick Orr, 58, who came to the stadium to pay tribute with his family. “He was just such a nice man. I don’t say it lightly, but it feels like losing a member of your family.”

As the bouquets and mementos kept arriving on Sunday, staff members cordoned off more of the area outside the stadium as a shrine, as fans awaited word on Mr. Vichai, who had endeared himself to the crowds by giving away beer, scarves, pies, hot dogs and doughnuts at the stadium around his birthday.

After Leicester City tied the game, 1-1, against West Ham on Saturday, many witnesses said they saw the chopper clear the stadium before it spiraled out of control. An investigation is underway to establish what, precisely, brought the helicopter down.

The city felt as if it were already in mourning, as many feared the worst even before Mr. Vichai’s death was confirmed.

“Everybody waiting up to hear an update about a man we’ve either never met or met a few time, but adore and love,” Hayley Sanderson wrote on Twitter. “That’s the true meaning of football. Hearts breaking all over the city right now.”

The wreckage of the helicopter outside the stadium on Saturday.

“Absolutely devastating news about the #LCFC helicopter crash,” Neil Harris wrote on Twitter. “Aside from bankrolling the club for a decade, these guys have thrown millions at hospitals and local charities.”

“You can’t put into words the love and respect for them in this city,” Mr. Harris said.

“He’s the man that allowed us to live the dream. There’s not an owner in the country that comes close to how connected with a city like he became,” Kristopher Warder, who describes himself as a “massive #LCFC fan,” wrote on Twitter on Saturday.

The Leicester City players Harry Maguire and Wilfred Ndidi shared prayer emojis on Twitter, as did the former team member Islam Slimani. “Speechless,” wrote Ben Chilwell, a defender for Leicester City and the English national team.

Gary Lineker, one of England’s most celebrated former professional soccer players and host of the popular BBC program “Match of the Day,” began his career with Leicester City. He called the events “a terrible tragedy” and “heartbreaking.”

News of the helicopter crash was breaking as Mr. Lineker’s show began on Saturday night. “That was the most difficult @BBCMOTD I’ve ever hosted,” he wrote on Twitter.

There was so much public interest in the crash that the Leicestershire police released a statement asking the public to be “patient, understanding and resist speculating on the detail and the circumstances.”

Emergency workers remained on the scene Sunday afternoon, and the police said they expected the inquiry to continue over the coming days.

According to a report on New York Times

Lion Air plane crash: Debris found in sea off Jakarta, Indonesia

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Lion Air flight JT 610 crashed into the sea off the capital, Jakarta, Monday morning with 189 people on board, Indonesian investigators are examining debris.

The Boeing 737 MAX 8 was carrying 181 passengers, including one child and two infants, as well as six crew members and two pilots, when it disappeared from radar during a short flight from Jakarta to Pangkal Pinang, according to Indonesia’s National Search and Rescue Agency (SAR).

The plane took off from Soekarno-Hatta International Airport in Tangerang, Greater Jakarta at 6.21 a.m. local time, and had been due to land at around 7:30 a.m. in Pangkal Pinan, the largest city on the Indonesian island of Bangka.

Finance Minister Sri Mulyani Indrawati said there were 20 ministry officials on board, who were returning to their posts in Pangkal Pinang after spending the weekend with their families in Jakarta for a public holiday.

Debris, life vests and a cellphone have been discovered in the water two nautical miles from the coordinates given as the crash site, SAR officials said. The fuselage has not yet been located.

Boats, a helicopter and 250 rescuers, including divers, were working at the crash site, some 34 nautical miles off the coast near Jakarta in the Java Sea. The frogmen are searching in water up to 35 meters (114 feet) deep.

Officials examine debris suspected to be from a crashed Lion Air flight.

Images have been released by Indonesia Disaster Mitigation Agency showing officials examining what appears to be debris from the plane. Video shows an oil slick at the presumed site of the crash.

Authorities said they are still trying to locate the Emergency Locator Transmitter which is currently not transmitting.

‘Everything is on the table’

Former accident investigator Alan Diehl told CNN it looks like the accident occurred after a “sudden departure from controlled flight.”

“Air safety investigators will be looking at four broad categories — mechanical, human, weather and criminal. It appears now that weather was not a factor but other than that, everything is on the table.

“Clearly if you’re having an emergency you have to focus on troubleshooting first of all, and solving the problem, so you probably don’t have a lot of time to talk to the controllers. The fact that they had enough time to tell them that they wanted to return, that is significant.

“The fragmented floating debris suggests that there’s probably not going to be a rescue effort but they should certainly be able to recover the black boxes fairly expeditiously.”

Official: Assumption is plane sunk

The aircraft was seen last on the radar at 6.22 a.m. at 2,500 to 3,000 feet, Soerjanto Tjahjono, head of the National Transport Safety Committee (NTSC) said. Australian air traffic controllers were asked for assistance but could not detect the aircraft.

A spokesman for the low-cost carrier confirmed to CNN affiliate CNN Indonesia that it had lost contact with the flight soon after take-off. The flight was last recorded in the Thousand Islands regency, an archipelago north of Jakarta.​

Crash-site

Search teams are working on the assumption that the plane has sunk and were expected to use equipment to try to detect an underwater locator beacon.

Lion Air acquired the Boeing 737 MAX 8 in August 2018 and it had only flown 800 hours, Tjahjono said.

Boeing, the manufacturer of the aircraft, released a statement saying the company was “deeply saddened” by the loss of flight JT 610.

“We express our concern for those on board, and extend heartfelt sympathies to their families and loved ones,” the statement said.

The 737 MAX 8 is one of the latest versions of a jet that was introduced in 1967. More than 10,000 737s have been produced, making it the best-selling jetliner of all time.

The MAX versions of the 737s are touted for their LEAP jet engines which Boeing says “redefine the future of efficient and environmentally friendly air travel.”

In its statement, Boeing said it was ready to provide technical assistance to accident investigators, and that all questions about the incident should be directed to Indonesia’s National Transportation Safety Committee (NTSC).

An image released by Indonesian rescue officials of debris pulled from the water.

Lion Air said the captain of JT 610, Bhavye Suneja, had more than 6,000 flight hours, and his copilot, named Harvino, more than 5,000. It said the plane had been declared “operationally feasible.”

Three of the crew were undergoing training, the statement said.

According to the Aviation Safety Network, the airline was added to the European Union’s blacklist of banned carriers in July 2007, and removed from the list in June 2016.

 

Source CNN | Edi Amin in Hong Kong contributed to this report.

CPTPP: Vietnam firms not ready to reap benefits

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Most of local enterprises are unprepared to take advantage of the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP).

Speaking at a meeting titled “CPTPP: Opportunities and Challenges for Vietnam” last week in HCM City, Pham Quynh Mai, deputy head of the Ministry of Industry and Trade (MoIT)’s Multilateral Trade Policy Department, said with its supporting industries remaining weak and rules of origin being strict in many countries, it is difficult for Vietnamese exporters to fully capitalize on the CPTPP.

However, the clothing and leather and textile sectors, among others, would see the biggest growth under CPTPP, she said.

Clothing and leather products, chemicals, plastic products, and transport equipment and machinery are expected to get an export boost while imports will grow in almost all sectors.

The CPTPP will provide greater market access to Vietnamese firms but also open up the country to foreign products, increasing competition.

Experts said industries such as automobile and agriculture would face intense competition.

Tran Thi Thu Huyen, head of the Ministry of Finance’s International Cooperation Agency, said under the CPTPP average trade-weighted tariffs would drop from 1.7 per cent to 0.2 per cent for Vietnamese exporters.

Non-tariff measures are predicted to reduce by 3.6 percentage points in terms of tariff equivalence, she said.

As market access increases and tariff commitments take effect, sectors such as textiles, footwear, electronics, and equipment would have an opportunity to increase their exports to other member economies, she said.

Trinh Thi Thu Hien of the MoIT’s Export-Import Department said with strict rules of origin, Vietnam would have to develop supporting industries to benefit from the trade deal.

Tran Thi Thanh Thuy of the Multilateral Trade Policy Department said Vietnam planned to improve the investment environment and protect intellectual property rights to attract investors.

Government institutions and administrative systems also needed to be reformed to take advantage of the CPTPP, she said.

Experts said the effort could be expensive in the short term, but in the long run would help Vietnamese companies take full advantage of such trade agreements.

It is also necessary for Vietnam to focus on small and medium-sized enterprises (SMEs) and reform State-owned companies.

SMEs account for a majority of the economy and labour market, and the government should support them if it wants the SMEs to align themselves further with the global supply chains.

Vietnam is expected to fulfil its trade liberalisation commitments and ratify the CPTPP within this year.

At the Vietnam Nam Business Summit held last month, Prime Minister Nguyen Xuan Phuc had said his Government would summit the CPTPP to the National Assembly for approval this month.

New Zealand ratified the CPTPP on Wednesday, taking to four the number of economies that have done so.

New Zealand Minister for Trade and Export Growth David Parker said Japan, Mexico and Singapore had ratified the deal in July and Australia and Canada are expected to join very soon, which means the tariff reductions and increased exports would begin very early in 2019.

The other signatories are Vietnam, Brunei, Chile, Malaysia, and Peru.

The CPTPP would come into effect 60 days after at least six member countries ratify the trade pact.

The trade agreement was signed last March following a period of turbulence caused by the departure of the US.

It is designed as an open free trade agreement, enabling economies to join by accepting its standards and signing agreements with its member economies.

 

Vietnam News Channel

Lee Jae-yong, Samsung scion to leave for Vietnam this week

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Lee Jae-yong, the Samsung Electronics Vice Chairman will head to Vietnam this week on a business trip aimed at checking Samsung’s key smartphone production lines amid a decline in its global market share, industry sources said Sunday.

Lee is scheduled to leave on Tuesday and stop at Hanoi and Ho Chi Minh city, sources familiar with the matter told Vietnam Insider. The purpose of the trip is to check factories in Vietnam and meet with government and industry officials there, according to the sources.

The sources declined to give further details about itineraries of Lee Jae-yong, citing that part of his schedule is yet to be determined.

It will be seventh overseas trip of Lee Jae-yong since he was released from jail early this year on a suspended prison term for bribery conviction linked to a corruption scandal involving a previous South Korean president.

Samsung is the largest foreign investor in Vietnam and accounts for around a quarter of the country’s total export revenue. Samsung has invested $17.3 billion in eight factories and one research and development center in Vietnam, turning the country into its largest smart phone production base.

VDSC Weekly Market Recap: Top Picks, PPC, PME, DGW, EV, HAX, FRT, MBB

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It was another tough week for Vietnamese equities as losses accelerated and the VNIndex pulled back 6% WoW. October’s losses are now to 11%, which puts Vietnam as one of the worst performers in the region this month, just after Korea (-15.5%) and China (-11.1%).

This week the VNindex had been tracking the DJIA and Nasdaq composites for 4 of 5 days, and investors were hoping that Thursday’s big US bounce back would reflect itself in Friday’s trading in Vietnam. However, the VNindex closed at 900.82 on Friday.

Besides the market systematic risk, the O&G sector also received bad news from the global oil prices’ declines. The Brent price hit -4.76% on October 22nd, prolongs its downtrend since the beginning of this month. It’s the same for the WTI. So, on the Vietnamese O&G stock board, GAS declined 9.1%, PVD -13.4%, and PVS -8.2%.

Retail and Financial services were the hardest hit sectors this week, although performance was weak across the board.

Though they turned net buyers on Friday, foreign investors were net sellers for most of the week. They offloaded VND553 billion (USD24mn) worth of stocks on HOSE.

Fortunately, liquidity has been relatively stable. The average of the HOSE’s matching values is approximately VND3,400 billion (USD152mn), +18% compared to the average of the last week. Fears of margin calls were overblown as brokers have been managing quite attentively their risks since the summer rout.

Though Vietnam is trading at a premium to historic valuations, we believe it continues to offer a combination of growth backdrop and decent earnings expectations for corporations. 26 of 57 stocks under our coverage announced their business results for 9M 2018. Six companies announced better than expected earnings results, while three came in under our analysts’ forecasts. The rest were in-line with our forecasts.

Top Picks

HDB: Ho Chi Minh Development Bank

Market Cap: USD1.46bn

RoE: 14.9%

P/E (18F): 13.15x

P/BV: 2.4x

Dividend yield: 3.78%

Rationale and risks:

· Diverse customer ecosystem supports its retail-banking strategy. HDB has close partnerships with Vietjet Air and some major retail-oriented companies with large and nationwide customer bases such as Petrolimex, Vinamilk and Saigon Coop. The bank is exploiting this customer ecosystem to grab more share by cross-selling its products, which enables it to expand its credit and NIM efficiently. In the first half of 2018, the bank’s lending growth was +16%, the second highest in the industry, driven by retail lending (+40% YTD). NIM continued to improve from 3.7% in 2017 to 3.9% in H1 18. Total operating income grew significantly (+46% yoy), while operating expenses were well-managed (+12% yoy), leading to a significant improvement in the cost/ income ratio. We expect NIM to reach 4% by the end of the year.

· The merger with PGBank was approved by the Central Bank (SBV) in Q3 18. We think this is a wise move to support HDB’s retail banking strategy as it strengthens its customer base and transaction network. These advantages are crucial to the bank’s sustainable growth considering: (1) we are seeing increased competition in retail and SME banking; and (2) the SBV is closely monitoring credit expansion.

· Maintaining current high margins in consumer finance can be challenging due to increasingly intense competition in the industry. The government might start to tighten regulations due to recent negative feedback regarding lending rates.

DXG: Dat Xanh

Market Cap: USD382mn

RoE: 25.9%

P/E (18F): 9.5x

EV/Ebitda: 6.1x

P/BV: 1.91x

Dividend yield: 0%

Rationale and risks:

· Established as a brokerage firm, Dat Xanh Group leveraged its business into real estate development, based on its knowledge and customer database. Accumulated at low cost, its huge land bank could be gradually transformed bringing cash flow and value to the company.

· Active developer by acquiring land bank and developing projects, mainly targeting the mid-end segment. DXG secured land bank at a reasonably low cost. Most of the land bank is located in Ho Chi Minh City, in District 7, 2, 9 and Thu Duc.

· One-off income: DXG could get earnings from transferring a hospitality project in Phu Quoc, namely Grand World. It is estimated at VND 400-500 billion profit if successful, equivalent to an EPS of VND 1,000.

· The company is one of the leaders in brokerage services in both two key markets in Vietnam: Hanoi and Ho Chi Minh City. Furthermore, DXG also aggressively expanded its coverage into other potential markets across the country. The company employs over 1,000 people.

· DXG may sell a 40% stake to strategic investors.

· In term of performance, we suppose that there is a very low possibility for maintaining the growth rate of nearly 40-50% from the past two years. We assume that the growth rate of revenues will be 20% per year for the next three years. 2018’s guidance is feasible thanks to hand-over of residential projects and brokerage segment. We estimate total revenue and NPAT will be VND 4,000 (+38%) and VND 1,029 billion (+37%) in 2018. Valuation:

· Using the RNAV method, the fair value of DXG is around VND 36,000, 25.4% higher than current price.

ACV: Airport Corporation of Vietnam

Market Cap: USD7.4bn

RoE: 16%

P/E (18F): 29x

EV/Ebitda (18F): 22x

Dividend yield: 1%

Price target: VND 120,000 (+50% from current market price)

Rationale and risks:

· Manages, operates and exploits all 22 airports in the country. True monopoly.

· Passenger growth during the 2005-16 period was 19% per year, the highest in Asia Pacific. We foresee that at least for the next two years, traffic growth will stay robust.

· The Government has allowed ACV to raise fees it charges airlines by between 10 and 40%, depending on the airport.

· Non-aeronautical revenues per passenger in Vietnam airports is very low at one dollar per person. In Thailand and Malaysia, it is around four to five dollars. There is room for this to expand as Vietnam’s airports start focusing on non-aeronautical businesses.

· Small free float and low liquidity since the Government owns 95% of the company.

QNS: Quang Ngai Sugar

Market Cap: USD 521 mn

RoE: 24.4%

P/E (18F): 9.3x

EV/ Ebitda: 5.7x

P/BV: 2.3x

Dividend yield: 3.7%

Rationale and risks:

· Huge potential in the soymilk market. Even with an 84% market share, Vinasoy, a QNS brand, has not reached more than 50% of households in rural area and 65% of households in urban area, equivalent to 52 mn people in Vietnam. Soymilk consumption is 280 mn liters in 2018 so far, an average of 6.8 liters per year per capita. However, Vinasoy only sells about 2.9 litres per year per capita. There is more upside.

· New products will enhance the competitiveness of QNS in the soymilk market. Currently, QNS is a leader in the northern part of market but the company is facing fierce competition in the South. We expect that a new product – Fami Go- introduced in the second quarter will diversify the portfolio of products as well as increase competitiveness. QNS expects that there will be six mn liters added to the total soymilk consumption this year and another 40 mn liters in 2019

· QNS is on the way to improve its sugar segment. Along with expanding the An Khe Sugar to a capacity of 18,000 tons sugarcane per day, QNS has been increasing the sugarcane area as well as productivity. We believe that QNS can compete with Thai Sugar.

· Biomass is a stable segment. The capacity of the biomass plant is not that big but it is generating a stable cash-flow.

Should you like to speak with our analysts about any of these stocks, please let me know.

Rong Viet Securities Equity Research Summary

Company Report

Pha Lai Thermal Power JSC (HSX:PPC) – (Initiation, BUY, VND23,000, UPSIDE 44%)

· 3Q18 performance: lower contract volume hit core earnings but NPAT still grew due to less provision expenses, VND 163 billion, corresponding to a growth of 8% YoY.

· The reversal of financial expenses from FX differences in 2016 is expected to be recognized in 4Q 2018, making it a potential catalyst for PPC’s business results. With the reversal amount of up to VND125bn, we estimate that 4Q18 earnings could increase by 136% YoY to VND214bn.

· Regarding 2018 business results, we estimate that NPAT could rise by 28% YoY to VND 1,093 billion due to the large one-off income from the reversal of the expense from FX differences

· The stock is trading at 17.x current EPS of VND2,680. Furthermore, at its current price, it is trading at ~0.9x P/B. Cash dividend is expected at VND2,500.

Analyst Pinboard

Pymepharco Joint Stock Company (HoSE: PME): Update on EGM

· The EGM of PME today has approved the following:

o Lifting the FOL from 49% to 100%

o Allow its largest shareholders, STADA Service Holding B.V or/and related parties to increase its ownership from 49% to a maximum of 72% without a public offering.

o Four new members from STADA were added to the BOD.

· We see this as a preparation for STADA to retain its influence in the Vietnam market, since it will withdraw from the STADA Vietnam J.V after 2019.

· According to Bloomberg, M&A deals in the pharmaceutical industry have an average EBITDA multiple of 13.3x and P/B multiple of 3.2x

· The price the acquirers would pay for PME would range from VND80,000 to VND110,000/share.

· PME can complete to lift FOL within this year.

· Our current target price for PME is VND 96,000/share.

Digiworld (HoSE: DGW) – 9M Results Update

· In the first nine months, DGW posted an impressive growth in both revenue (VND4.383tn, 62.6% YoY) and profit (VND78.3bn, 37.8% YoY). FMCG is still at the very early stage of development.

· Xiaomi seems to be penetrating well into the middle-priced segment as it offers “Low Price – Great Specifications”, smartphones with premium hardware and quality.

· In September, DGW and Nokia HMD signed a contract in which Digiworld will become the official distributor of Nokia products in Vietnam (please refer to our note in 9/28/2018).

· To sum up, we believe this company will have a good year in 2019, mainly driven by the mobile phone and office equipment segments.

· In the long term, DGW targets to make the FMCG segment the main profit contributor. However, the FMCG segment is still very small and the company has to prove it can adapt to a very different business.

Everpia (HoSE: EVE) – Update on Business Results

· It focuses on the middle class and high-end customers, its gross margin is quite impressive (bedding: 28%, padding: 49%).

· During the first 8 months, net revenue achieved VND716.9bn (+31% YoY), its NPAT recorded VND55.2bn (+26% YoY).

· Bedding sector is the core business activity with its gross margin of around 30-35%, EVE targets to keep stable its revenue growth rate of 20% per annum.

· Padding sector has the excess of gross profit margin (~49%), mainly exports to Korea market (over 50%).

· For 2018, BoD expects to increase its revenue to VND106.259bn (+24% YoY), increase the proportion of domestic market from 10% to 15%.

· EVE is cooperating with Byuck Chang Ho and KingKoil

· EVE is planning to issue the convertible bond to foreign markets

· Dividend policy for years is expected at VND1,000/sh in the coming years.

· We recommend to add this stock in the watchlist.

Hang Xanh Motors Service JSC (HoSE: HAX) – Optimistic 2018 Outlook

· The first Mercedes cars restarted to be imported from Germany in late August. We therefore believe that 4Q18 is a promising quarter for HAX’s performance.

· Improvement market share during 9M 2018 is in line with expectations of HAX’s management team.

· In 3Q18, revenue was up +26% YoY to VND1.142tn, but profits went down -23% YoY

· In the first nine months, revenue and NPAT reached VND3.280tn (+18% YoY) and VND64bn (+9% YoY), respectively.

· 2018 outlook is still optimistic, suggesting a positive 4Q performance with 2018 earnings reaching VND124bn (+47% YoY).

· Our target price for HAX is under revision. We will update it in an upcoming report.

FPT Digital Retail JSC (HoSE: FRT) – 9M Result Update

· FRT posted a 9M revenue of VND11.033bn (+20%) and profit of VND227.4bn (+30%) yoy.

· Regarding F.Studio – the Apple Authorized stores, 9M revenue was VND 301 bn (+25% yoy).

· On the other hand, the Long Chau pharmacy chain is doing as expected. The 17 stores earned VND 254 bn of sales in nine months.

· According to the new decision from the Ministry of Health, all drugstores must have a management software up and online by Jan 2020, favorable for modern drugstores such as Long Chau.

· To sum up, with the current saturating ICT market, all major retailers are expanding into new businesses to maintain their growth. We believe that Long Chau is a suitable model and FRT’s experience in running small shops will make the difference in a very fragmented market.

· We maintain a target price of VND 84,000 for FRT in one-year term.

Military Commercial Joint Stock Bank (HoSE: MBB) – Updates on 3Q2018 Business Performance

· PBT reached VND6.015tn, +50.3% YoY, fulfilling 88.6% of the entire year’s guidance.

· Lending growth rate slowed down under tighten credit control by SBV.

· Net interest income still grew positively in spite of slowing momentum, reaching ~VND10.43tn (+31% y-o-y).

· Non-interest income in 9M2018 accounted for 24.5% of TOI. This proportion increased from 20.4% in 9M17 and 19.1% for the entire year of 2017.

· Operating costs were well-controlled, accounting for 39.9% of TOI and provision expenses are lower than our expectations, accounting for 13.5% of TOI.

· It is noteworthy that the NPL ratio increased from 1.3% in 2Q2017 and 1.2% in 2017 to 1.6%, much higher than our expectations.

· Though the growth momentum is slowing down due to the stagnation in outstanding loans since 2H2018, MBB is still amongst a few banks that expect to improve NIM further.

· Provision expense in 4Q18 is expected to reach VND887bn. Total 2018 PBT is forecasted to reach VND7.023tn.

· MBB is currently trading at VND 21,050, about 42.5% lower than our target price of VND 30,500. We thereby reiterate a Buy rating on the stock.

VinFast Will Introduce Electric Vehicles In Vietnam

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VinFast is a new brand from Vietnam, which unveiled at the 2018 Paris Motor Show its first two conventional cars – the VinFast LUX A2.0 sedan, based on the BMW 5-Series and VinFast LUX SA2.0 SUV, based on the BMW X5. Both of those vehicles were designed by Pininfarina.

The company licensed BMW platforms and turbocharged 2.0-liter I-4 engine to begin production in the middle of 2019 at its modern 335-hectare plant complex in Cat Hai, Hai Phong, northern Vietnam. Another model is to be an all-new, global small car, licensed from General Motors.

We would not bother to discuses those two cars, but according to the press release VinFast is working hard to bring the first Electric vehicles to Vietnam.

In 2019 VinFast intends to unveil its all-electric car, which is currently developed by German’s EDAG and designed by Italdesign Giugiaro.

“Following its investment to bring electric mobility to Vietnam in 2018 with the launch of a range of eScooters, VinFast will unveil an all-new fully electric car in 2019. Design development is being undertaken by renowned Italian design house, Italdesign Giugiaro, while complete engineering development of the car will be led by Germany’s EDAG, one of the world’s largest independent engineering service providers. With sales starting in early 2020, it is likely to be the very first electric car on sale in Vietnam.”

At the same time company is gearing up for electric bus production, beginning from 2019 in cooperation with Siemens.

“In August 2018, VinFast signed two agreements to cooperate with Siemens for the development of a fully electric bus (eBus). The agreement specifically relates to electric motor manufacturing licenses and the supply of components to support the production of the eBus in Vietnam. Together with the production of e-scooters and electric cars, VinFast’s eBus will not only help improve the environment but also contribute to the transformation of the urban public transport system in Vietnam.The agreements enable VinFast to establish a supply chain for the production of zero emissions public transport vehicles in Vietnam, contributing to the transformation and modernization of the public transport sector in the country.”

Together with electric scooters, eScooter, launched in 2018, it seems that company aims for all kinds of EVs.

 

By MARK KANE

Vietnamese banks look abroad in rush for long-term capital

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Struggling to attract domestic funds, banks are rushing to seek foreign capital ahead of the central bank’s tightened policy on medium- and long-term lending early next year.

According to the State Bank of Vietnam (SBV) regulations, short-term funds for medium- and long-term loans at banks will be reduced from the current 45 percent to 40 percent from January 1, 2019.

Banks will also need more capital to meet a capital adequacy ratio (CAR) of 8 percent in 2020 as per the SBV’s Basel II norms.

To prepare for the regulations, besides increasing interest rates for long-term deposits to attract depositors, banks also have to find capital from foreign partners.

Saigon Hanoi Commercial Joint Stock Bank (SHB) recently took a US$20 million loan for a term of five years from Russia’s International Investment Bank and a 20 million euro loan under a credit agreement framework with Russian International Bank for Economic Cooperation.

According to SHB, the loans will help the bank supplement its medium- and long-term capital funding for Vietnam’s infrastructure projects, and projects involved small and medium enterprises and green energy. The loans will also help SHB perform international payment transactions, trade finance, import-export transactions between IBEC member countries, foreign exchange activities and capital mobilization.

Earlier, Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) also received a loan worth $50 million from JPMorgan Chase for a term of three years. This loan will help the bank supplement its medium- and long-term foreign capital source and meet the needs for foreign loans of domestic businesses.

Tien Phong Commercial Joint Stock Bank (TPBank) also signed a long-term loan contract worth up to $100 million with the International Finance Corporation (IFC). Along with financing, IFC will act as an advisor for TPBank in banking governance, risk management and development capacity building.

Orient Commercial Joint Stock Bank (OCB) is also expected to soon borrow foreign capital, as there is information that IFC is considering granting a loan of up to $100 million to the bank.

Raising foreign holding expected

Besides foreign capital loans, banks also expect the Government to increase the foreign ownership ratio to meet their dire need of capital.

Under current regulations, the ownership ratio of a foreign investor in a Vietnamese bank can’t exceed 20 percent of the bank’s charter capital and the total shareholding ratio of all foreign investors in the bank can’t exceed 30 percent.

According to banks, this is the biggest obstacle in attracting foreign capital and some banks have used up this limit. Therefore, many banks have asked the Government to increase the ratio to 49 percent to help them increase capital.

Experts have agreed with the proposal, saying banks need capital to operate more healthily and better serve society and the economy.

Financial expert Nguyen Tri Hieu said the Government and SBV should consider the banks’ proposal as the domestic capital market is very limited.

Due to the difficulties of the banking sector, domestic investors are no longer willing to invest capital, Hieu said, proposing the SBV allow foreign investors to invest in Vietnamese banks at a maximum level of 49 per cent.

According to Hieu, the Government should not be concerned that foreign investors may manipulate the financial market because no country has seen a loss of control of the market due to foreign capital flow.

Agreeing, experts from Bao Viet Securities Company (BVSC) said that the increase of foreign ownership limit to 49 percent is needed to help banks meet requirements in the country’s integration and be able to compete with international peers.

With the ratio increase, the State would still hold a dominant stake of 51 per cent at banks and can also control banks through the Law of Credit Institutions and other legal regulations, BVSC experts said, adding the rise would not only help Vietnam meet commitments in joining the international economic integration but also attract large capital of foreign investors to local banks.

 

Viet Nam News/Asia News Network

Foreigner Complains About Vietnam’s ‘Showers,’ But It’s Not a Shower

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A foreigner who took to Facebook to detail his struggle with “showers” in Vietnam has people in disbelief.

In a post on Oct. 24, Hamish Carruthers shared that he has been staying in Hanoi for almost a week, and he only had one issue of the accommodations.

“Alright guys, I’ve been in Hanoi almost a week now and I’m loving [it]. My only complaint is the showers,” Carruthers wrote. “I’m all for saving water but having to hold your finger on the button to keep the water flowing seems a bit extreme.”

The foreigner, seen bending over to wash his hair in an accompanying photo, complained about how “low” Vietnam’s “showers” are and sought for others’ opinion on the matter.

“The cold temperature doesn’t bother me too much but why are they so low? You have to bend down to wash your head. Vietnamese people aren’t that short…

“I’ve tried 2 different hostels now and they both have this style of shower, what are other peoples opinions on the Vietnamese shower?”

The post quickly went viral, garnering over 22,000 reactions, 5,900 shares and 430 comments in just two days.

However, Carruthers has actually been using a bidet shower, a hand-controlled nozzle that delivers water for genital and anal cleansing.

Facebook users educated Carruthers about the actual purpose of the “shower” he has been using.

Others found themselves laughing and scratching their heads at the foreign man’s “complaint.”

It’s unclear if Carruthers was actually pulling a joke, but anyone who has never seen bidet showers should probably check out Japan’s state-of-the-art toilets. One model — featuring a built-in deodorizer, instantly-heated seat and aerated water cleanse — literally takes care of “business” for $11,000.

Source: NextShark

 

Police hunting S. Korean gang over assault on rivals in Ho Chi Minh City

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Police in Ho Chi Minh City are hunting five South Korean men who are still on the run after assaulting their fellow countrymen and business rivals at the latter’s residence in District 2, leaving the victims with severe injuries.

Two members of the seven-man gang, all of whom are South Korean nationals, have already been captured, police say.

According to information released by District 2 police, Park Gun-huk and Min Kyung-man are both South Korean nationals staying in the Thao Dien neighborhood in District 2.

The two were involved in a work-related dispute, which prompted Park to call his “friends” from South Korea to come to Ho Chi Minh City for a plan to ambush his rivals.

On Monday, six of Park’s friends, Im Tae-woon, Lee San-ha, Kim Young-jeam, Lee Moyng-woon, Park Gan-min and Kim Jung-hoon, landed in Ho Chi Minh City after boarding a flight from South Korea, according to police officers.

The men stayed at a hotel in District 2 and bought six hammers together with a bundle of plastic zip ties which they planned to use during the ambush.

At around 3:30 am on Tuesday, the gang hailed a taxi to Min’s residence, where there were six South Koreans staying, wiin Thao Dien and sneaked into the house unbeknownst to their victims.

The attackers, armed with hammers, quickly had their sleeping victims under control and dragged them down to the ground floor, where they were tied up in plastic zip ties and hit with hammers.

The men also searched the rooms for valuable properties to steal.

After the initial confusion, the victims came to their senses and began to fight back, eventually taking back control of the situation.

After around five minutes of resistance, the assaulters fled the scene with the stolen properties, but they were detected by neighborhood security guards stationed nearby.

Panicked, the men split into multiple directions in an attempt to escape.

Police officers were called in to help and managed to capture two of the seven men, Im Tae-woon and Lee San-ha.

Min and the other five in his residence were taken to hospital for treatment for injuries, including a man named Park Jung-il who suffered severe head wounds and internal bleeding, police said.

Authorities are still hunting for the remaining five members of the gang.

Tuoitrenews

Vietnamese good at solving math questions, but lacks expertise to develop AI

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Commenting that there is big gap in human resources, Le Cong Thanh, an AI expert, believes that Vietnam lacks expertise to develop artificial intelligence (AI).

However, Vietnam’s AI researchers have a big advantage – the support of the entire society.

Vietnamese experts believe that Vietnamese are very good at math and coding, a factor that will help the country gain big achievements in the field if there are reasonable policies.

Vietnam has great potential to become a R&D (research & development) blockchain hub of the world. Some experts believe that Vietnam can be among top 5 or top 10 blockchain centers in the world.

Dang Minh Tuan, director of QNET, said Vietnam has opportunities to develop AI equal to other countries.

In Vietnam, AI is being used in apps such as face-identification technology cameras, smartphone chatbots, self-propelling vehicles, and nano robots.

However, Thanh pointed out that the development and application of AI in Vietnam are not as active as reported by mass media.

“Vietnam is behind other countries in developing AI and it is not likely to catch up with the countries even if it runs very fast now. There is big vulnerability in Vietnam’s human resources,” Thanh said.

In general, in Vietnam, there are only lower and top-tier workers, the latter being who finished foreign universities and worked for foreign companies. There is a gap between the two groups, with no middle tier group, as in other countries.

“The first thing Vietnam needs to do is remove the human resources gap in AI,” Thanh said.

He noted that machine learning communities now have more members. The communities will provide specialists, i.e. top-tier workers, who can train others in machine learning and AI.

Thanh said “we not only need theory, but also computing infrastructure and related data”, adding that Vietnamese data is mostly in foreign hands, from applications on phones to computers.

While in other countries, some people don’t think AI is extremely important, Vietnamese youth believe they have to develop AI to have a better future.

Thanh went on to say that he thinks Vietnam doesn’t have any outstanding advantage in comparison with other countries.

“I don’t think Vietnamese are good at math. They are only good at solving math questions,” he said, adding that Vietnamese forget math knowledge after they finish school because they don’t understand the nature of problems.

According to a report on Vietnamnet

Smartphone market: new rivals appear, but big players still thrive

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Emerging brands have been taking action to strengthen their presence in the domestic smartphone market. However, the face of the market is expected to stay the same in the near future.

Thirteen out of 15 bestselling smartphone models in the third quarter reported by The Gioi Di Dong (Mobile World), which holds 50 percent of the Vietnamese mobile phone distribution market share, belonged to well known brands Samsung and Oppo.

In the list of top five bestsellers reported by FPT Shop, four out of five products are made by Samsung and Oppo.

Analysts commented that the products of the two manufacturers have been dominating the domestic market for years, so there is little opportunity for newcomers to change the situation.

Apple is also a well known brand in Vietnam, but its products are rarely on the lists of bestsellers.

Only one model of Apple, iPhone 6 32GB, was listed in The Gioi Di Dong’s top 15, in the 13th position. FPT Shop’s list doesn’t include any Apple name.

Though having only one model listed in the top 15, Apple is the biggest rival of Samsung and Oppo.

This reflects the current situation of the market which is controlled by Samsung, Oppo and Apple.

Samsung and Oppo’s dominance in the market shows their wise business strategies which aim to satisfy customers’ tastes.

Huawei and Xiaomi’s efforts to conquer the Vietnamese market have brought initial results. In The Gioi Di Dong’s top 15 best sellers in the third quarter, Huawei Nova 3i ranked in the 12th position, above iPhone 6 32 GB. The model is equipped with two dual cameras, notch screen and reasonable price.

Meanwhile, FPT Shop’s list of top five bestsellers includes Xiaomi Redmi Note 5 32 GB, in the fourth position.

Xiaomi has had campaigns to polish its images, and take cars for customers. It has opened the Mi Store.

The absence of Nokia in the list of bestsellers is a surprise. A report from HMD Global, which owns Nokia brand, showed that Nokia ranked second in the Vietnamese mobile phone market in sales in the first eight months of the year.

Analysts believe that the sales were from feature phones, because Nokia does not appear in the two biggest distribution chains’ lists of bestsellers.

Vivo, one of the world’s biggest smartphone manufacturers, also did not have any brand on the lists.

According to a report on Vietnamnet

Facebook has been fined £500,000 for Cambridge Analytica scandal

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Facebook has been fined £500,000 by the UK’s data protection watchdog for its role in the Cambridge Analytica data scandal.

The Information Commissioner’s Office (ICO) said Facebook had let a “serious breach” of the law take place.

The fine is the maximum allowed under the old data protection rules that applied before GDPR took effect in May.

The ICO said Facebook had given app developers access to people’s data “without clear consent”.

In July, the ICO notified the social network that it intended to issue the maximum fine.

Confirming the fine, it said in a statement: “Between 2007 and 2014, Facebook processed the personal information of users unfairly by allowing application developers access to their information without sufficiently clear and informed consent, and allowing access even if users had not downloaded the app, but were simply ‘friends’ with people who had.”

“Facebook also failed to keep the personal information secure because it failed to make suitable checks on apps and developers using its platform.”

Facebook said it was “reviewing” the ICO’s decision.

“While we respectfully disagree with some of their findings, we have said before that we should have done more to investigate claims about Cambridge Analytica and taken action in 2015,” it said in a statement.

What was the Cambridge Analytica data scandal?

Researcher Dr Aleksandr Kogan and his company GSR used a personality quiz to harvest the Facebook data of up to 87 million people.

Some of this data was shared with Cambridge Analytica, which used it to target political advertising in the US.

“Even after the misuse of the data was discovered in December 2015, Facebook did not do enough to ensure those who continued to hold it had taken adequate and timely remedial action, including deletion,” the ICO said.

Source: BBC

The ICO found that more than one million people in the UK had their data harvested by the personality quiz.

“A company of its size and expertise should have known better and it should have done better,” said Information Commissioner Elizabeth Denham.

The ICO is still investigating how data analytics is used for political purposes.

Ms Denham is due to give evidence to the Department for Digital, Culture, Media and Sport (DCMS) Select Committee on 6 November.

According to a report on BBC

FIFA Rankings: Vietnam maintains top spot ASEAN Countries

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In the latest FIFA rankings, Vietnam remains top amongst ASEAN countries; retaining their 102nd spot with a rating point of 1220. Their draws against Afghanistan and Jordan played a big part in them. Next up, are the Philippines who, despite a two-place drop, remain the second best team in South Eastern Asia.

There is quite a big difference between Vietnam and them as the latter has 1171 in rating points. Scott Cooper’s men have defeated LAOS and Bangladesh in the 2018 Bangabandhu Gold Cup.

Five places below the Philippines and in the 121st spot are Thailand who have jumped one place from the previous FIFA Rankings. Beating Hong Kong, Trinidad and Tobago in their latest matches, Thailand is also in the 2019AFC Asian Cup. Unable to qualify for the 2019 AFC Asian Cup, Myanmar has dropped 3 places in the ranking and are on 141st spot with a rating point of 1080.

But the biggest achiever through this FIFA ranking is definitely Indonesia who have jumped 4 places and are on the 160th spot. They have defeated Mauritius, Myanmar and have drawn against Hong Kong. Their rating points are 1080.

The next best team amongst the ASEAN’s are Singapore who has jumped 1 place and are on 165th. They’ve been rewarded with their latest win against Fiji, Cambodia, and Mongolia. 4 places below Singapore but a 2-place improvement from the last rankings are Malaysia who is on 169th.

Malaysia is rewarded for their wins against Sri Lanka and Cambodia. In the 170th spot, comes Cambodia who have relinquished their previous spot for Malaysia, meaning a 1-spot decline in the latest rankings. The recent run of results hasn’t been favourable for them and thus they’ve fallen in the rankings.

Like the Philippines, Laos has also dropped 2 spots and is on 181st. Latest comprehensive losses at the hands of the UAE and Mongolia are the main reasons for it. 10 places below Laos are Timor Leste in the 191st spot with a rating point of 910. Timor Leste has gone down one spot as to their previous ranking.

Another team who have gone down one spot are Brunei Darussalam who complete the ASEAN teams’ rankings in the list, on the 196th spot with a rating point of 903.

The ratings are given below in details:

01. 102. VIETNAM 1220 (+0)

02. 116. PHILIPPINES 1171 (-2)

03. 121. THAILAND 1154 (+1)

04. 141. MYANMAR 1080 (-3)

05. 160. INDONESIA 1004 (+4)

06. 165. SINGAPORE 991 (+1)

07. 169. MALAYSIA 974 (+2)

08. 170. CAMBODIA 973 (-1)

09. 181. LAOS 937 (-2)

10. 191. TIMOR LESTE 910 (-1)

11. 196. BRUNEI DARUSSALAM 903 (-1)

According to a report on Fox Sports

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