LTG - A long road ahead
We assess that Loc Troi is a company with strong fundamentals and solid core business activities. The CPC sector has a low growth rate but it has a high gross profit margin and a leading position in the CPC market. The rice segment has improved both its gross profit margin and its revenue contribution to LTG but the efficiency has not been significant. Recently, the company has focused on developing and promoting its rice sector but due to objective reasons from the general market, this sector contribution is still modest. In addition, we believe that LTG's joint venture with Vien Thi Ho Nam in China in the context of its tightening of rice export conditions will bring advantages to the company compared to other traders.
In terms of valuation, LTG is trading at a quite attractive PE compared to other companies operating in the same industry. In addition, we think low liquidity is an obstacle to LTG stock price. The plan to switch to listing on HOSE is expected to bring a positive impact on the company stock. We estimate the fair price of LTG at VND 29,400, which is 18% higher than the closing price on March 26th, 2019. We have an ACCUMULATE recommendation for this stock.
LT Group, Inc. is a Philippines-based company that purchases, exchanges, assigns and holds investments and properties. The Company's segments include Banking, Distilled Spirits, Beverage, Tobacco, Property Development and Others. The Banking segment provides a range of banking and other financial services to corporate, middle-market and retail customers and various government agencies. The Distilled Spirits segment is involved in manufacturing, compounding, bottling, importing, buying and selling rum, spirit beverages and liquor products. The Beverage segment is engaged in brewing, and soft drinks and bottled water manufacturing. The Tobacco segment manufactures and supplies cigarettes, casings, tobacco, packaging, labels and filters. The Property Development segment owns, develops, leases and manages residential properties. The Others segment consists of holding companies that provide financing for working capital and capital expenditure requirements of its operating businesses.
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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