NKG - Benefits from rising steel prices and high demand from overseas
Seizing opportunities from the European and North American markets will help NKG to improve both sales volume and gross margin in 1H2021. Afterwards, the company can reallocate its selling volume to the domestic market in 2H2021 if the demand from foreign markets becomes weaker. Overall, we think NKG can achieve substantial earnings in 2021 via both volume growth and higher HRC price.
Using a P/B of 1.1x and P/E of 9.5x, we estimate NKG’s fair value is roughly VND 24,700 per share. Although NKG’s NPAT can increase strongly in 1H, we think its results still are uncertain in 2H due to the highly volatile steel price. “Short-term” investors can consider our target price of VND 25,600 per share, which is based on the P/E method. With a cash dividend of VND 300/share over the next 12 months, the total return is +15%, based on the closing price on 25th March 2021. Therefore, we recommend to ACCUMULATE this stock.
Nam Kim Steel Joint Stock Company is a Vietnam-based company operating in the steel industry. The Company is engaged in the manufacturing of hot-dip 55% zinc-aluminium alloy coated steel branded Naki Zincalum, hot-dip zinc coated steel branded Naki Zinc, pre-painted zinc coated steel and pre-painted zinc-aluminium coated steel branded Naki Color, galvanized steel pipe and black steel pipe branded Naki Pipe, hot-rolled steel sheet in coil and cold-rolled steel sheet in coil. It is also involved in the trading of various types of steel products and the provision of ground freight transportation services.
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.
RongViet Research reports are diversified and abundant, along with in-depth analysis and performed by experienced, highly-qualified and knowledgeable teams. With the objectives of transparency, accurate and timely manner, RongViet believes that our products would always be important sources of information for customers/investors’ investment decisions.”
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.