CTD - “Safety Firstâ€
Despite struggling with growth, CTD is able to remain the leading construction contractor in Vietnam. Its superior construction capacity and financial health compared to its rivals have proven valuable. CTD is improving its internal strength by improving construction technology instead of engaging in price competition. In 2018, CTD's performance may stay flat or even decline. This is in line with the management’s perceptions of the risks in the housing market, increasing competition and changes in wage policies. We like the strategy of focusing on capacity, winning large and complex bids to maintain its reputation rather than giving up profitability to achieve short-term revenue growth. Cash flow management and zero debt level are strong considerations to hold the stock at this point.
Raising cash dividends at the AGM was an example of the company’s healthy financial conditions.
RongViet Securities has a CTD share value at VND 160,100, 12.3% higher than the closing price on June 1, 2018. We recommend ACCUMULATING the stock. The target price was revised down from the 2018 Strategic Report published in February to reflect the long-term growth prospects of the business in the context of a declining growth in construction demand. Investors should also bear in mind that CTD’s share price has fallen nearly 40% since the beginning of the year. Therefore, we also recommend considering the downside pressure caused by unfavorable news on the stock.
Coteccons Construction Joint Stock Company, formerly Cotec Construction Joint Stock Company, is a Vietnam-based company engaged in the construction industry. It constructs infrastructures, traffic works, irrigational works, power transmission lines, transformer stations, water supply and drainage systems, as well as installs electrical, heating and air-conditioning equipment. The Company also provides engineering, architectural and interior designing services. In addition, it invests in real estate projects and provides real estate brokerage services. Other operations include hotel operations, inbound and outbound tour operations and the manufacture of construction machinery and construction materials.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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