PVD - Domestic market can provide some stability
“ Considering the outbreak in Malaysia, PVD has decided to retreat to Vietnam and find domestic jobs for its three rigs in late-2020 and 2021. PVD’s improved rig utilization in 2021 will pave the way for its revenue growth and cash flow management, though not strong enough profit-wise. On the other hand, we believe the well service segment will remain stable throughout 2021 benefiting from higher rig operating days. Overall, PVD is able to maintain its financial health whereas NPAT can end up lower YoY due to a lack of one-off financial income. Taking into account the currently elevated valuation for the whole Vietnamese stock market, we raised PVD’s P/B to 0.6x (previously 0.5x) and EV/EBITDA to 11.5x (previously 9x) and have target price of VND 20,500, equivalent to a total return of 3% based on the closing price on February 5th, 2021. Our recommendation has changed to NEUTRAL, as we think the mentioned good news for 2021 has been factored in the share price. “
PetroVietnam Drilling & Well Service Corporation is a Vietnam-based provider of oil and gas drilling services. The Company's operation is organized under three segments, including Drilling Services segment, which leases oil rigs and performs drilling services on a contract basis; Trading segment, which distributes equipment and supplies for oil drilling businesses, and Other Services segment, which provides diversified related services, such as oil well surveying and mapping, mud logging, oil spill containment, human resources outsourcing and project management.
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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