Analyst Pin-board MSH: Expectations on 2022 strong earnings growth are priced in
In 2Q-FY21, MSH recorded net revenue of VND 1,207 Bn (or USD 52 Mn, +27% YoY) and NPAT of VND 124 Bn (USD 5.4 Mn, +114% YoY), driven by (1) recovering global apparel demand and difficulties in rival garment producing countries, (2) expanding gross margin due to a product mix shift towards FOB orders, (3) the reversal of provision for doubtful debts.
MSH is less affected by social distancing due to being located outside of lockdown areas. The company has enough orders until mid-2022. Despite high materials and logistics costs in 2H-FY21, we believe MSH can increase FOB orders which are transfers from the South to offset these costs. For 2021, we forecast revenue at VND 4,474 Bn (or USD 195 Mn, +17% YoY) and NPAT at VND 432 Bn (or USD 19 Mn, +86% YoY), respectively. Correspondent 2021 EPS will be VND 7,772 and 2021 forward PER will be 10.6x.
Using DCF and PE multiple methods, we raise our target price by 28% to VND83,500, resulting from our upward revision in FY21-22 earnings. With an expected cash dividend in the next 12 months of VND 3,500/share, the total return will reach1.2% based on the closing price of September 17th, 2021. Following the strong share price performance, we have a NEUTRAL rating
Song Hong Garment JSC is a Vietnam-based company textile company primarily engaged in the manufacturing of garments and bedding products. The Company operates its production facilities in the province of Nam Dinh and exports its products to international markets, namely USA and Europe.
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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