HAH – Operation vessels face challenges

• In Q2-FY23, container volume of handling and shipping were 98 thousand TEUs (-12% YoY) and 95 thousand TEUs (-11% YoY), respectively. Accumulated 1H2023, container volume of handling and shipping were 185 thousand TEUs (-14% YoY) and 177 thousand TEUs (-8% YoY), respectively, completing 44% and 45% of the 2023 plan.
• In Q2-FY23, revenue and NPATMI were VND 611 billion (-7% QoQ and -34% YoY) and VND 97 billion (-37% QoQ and -75% YoY), respectively. Accumulated 1H2023, revenue and NPATMI were VND 1,267 billion (-61% YoY) and VND 216 billion (-74% YoY), completing 43% and 44% of the 2023 plan.
• Vessel operations are challenged by (1) continued low freight rates (2) three short-term charter vessels not being renewed and (3) two long-term charter vessels with high freight rates that will expire at the end of 2023. Those make the outlook for 2H2023 less positive than 1H2023.
• We adjusted down the revenue and NPATMI forecast to VND 2,576 billion (-20% YoY) and VND 411 billion (-50% YoY), respectively. Revenue of container handling, fleet and other will be VND 206 billion (-4% YoY), VND 2.132 billion (-22% YoY) and VND 227 billion (-10% YoY), respectively. We use the multiple method, target P/B and target EV/EBITDA of 1,2x and 4.6x respectively. We recommend to NEUTRAL with a target price of VND 46,800.