·         A 50% reduction in registration fees for domestically produced cars which expired in 1H2022  and rising private car demand after Covid-19 pandemic helped HAX sales growth by 23.3% YoY in Q2 2022 to  VND1,546 bn. Q2 2022 NPAT-MI surged to VND81 bn (+1,287 %YoY) thanks to higher average selling prices and huge financial profit from bank deposit ‘s interest (VND11.9 bn).   

·         2022 sales are forecast to be VND6,043 bn (+8.9 %YoY) based on 1) favorable business conditions; and 2) higher market share thanks to the launching of the new showroom “Mercedes-Benz Haxaco Cần Thơ”. Accordingly, 2022 NPAT-MI of HAX should reach VND280 bn (+75% YoY), backed by 1) higher ASP; 2) absence of abnormal expenses related to Covid-19 pandemic; and 3) commissions from Mercedes-Benz.

·         With a FCFF valuation model (50%) and multiples comparison (50%) with an applied P/E of 5.5x, our target price is VND26,500. Adding a cash dividend of VND500, the 12-months expected return is 9.8% compared to the closing price on Aug 25th, 2022. Therefore, we recommend to ACCUMULATE this stock.