HAH – Going through a difficult period for the entire maritime industry

• In Q1/2023, HAH's container handling and transportation volume reached 86 thousand TEU (-7% YoY) and 82 thousand TEU (-4% YoY), respectively, completing 21% and 25% of the 2023 plan. Revenue and NPATMI in Q1-FY23 reached VND 655 billion (+ 0% YoY and -23% QoQ) and VND 119 billion (-41% YoY and 31% QoQ), respectively, equivalent to complete 22% and 24% of the 2023 plan.
• Regarding the 2023 plan, HAH sets a target that volume of container handling and shipping can be flat compared to that of 2022. Revenue and NPAT both grew negatively, at VND 2,958 billion and VND 492 billion, respectively, down 8% and 40% compared to 2022. This year HAH is expected to receive two new 1,800 TEU ships. In order to ensure capital for investment activities, the company plans to issue convertible bonds with a total value of VND 500 billion at a maximum interest rate of 6% with a tenor of four to five years.
• At the end of 2023, HAH is expected to receive two new-built ships with a capacity of 1,800 TEUs. In order to supplement capital for ship investment, HAH plans to issue convertible bonds with a total value of VND 500 billion, maximum fixed interest rate of 6%/year, term of 4-5 years.
• Forecast for 2023, revenue and NPAT of HAH will reach VND 2,770 billion (-14% YoY) and VND 526 billion (-36% YoY), respectively. In which, revenue from the port operation, transportation and other activities reached VND 206 billion (-4% YoY), VND 2,337 billion (-16% YoY) and VND 227 billion (-10% YoY), respectively. HAH's NPAT dropped sharply during the year due to (1) freight rates and charter rates are reduced by 25% YoY and 70% YoY, respectively (2) outsourcing expenses, depreciation and interest expenses increasing rapidly during the year. We use the multiplier comparison method, target P/B and target EV/EBITDA are 0.95x and 3.7x respectively. We recommend to ACCUMULATE HAH with a target price of VND 42,300/share.