Report

TNG – 3Q22 sales ahead of expectation, but financial expenses continue to hurt earnings

  • 3Q22 sales ahead of expectation. Net sales reached VND 2,021 bn/ USD 81.3 mn (+2% QoQ, +29% YoY), showing a strong resilience to sector headwinds. NPAT-MI was VND 106 bn/ USD 4.3 mn (+22% QoQ, 25% YoY), while financial expenses surged 48 % YoY to VND 68 bn.
  • The company has received full orders in Q4 despite sector woes. We forecast net revenue and NPAT-MI of VND 1,493 bn/ USD 60 mn (+2%QoQ, 133% YoY) and VND 70 bn/ USD 2.8 mn (+14% QoQ, 154% YoY), respectively, because of positive order momentum. For FY22, we expect TNG’s net revenue and NPAT-MI to be VND 6,756 bn/ USD 272 mn (+24% YoY) and VND 301bn/USD 12.1 mn (+29% YoY), respectively. The correspondent EPS is VND 3,042.
  • We maintain BUY while lowering one-year target price to VND 20,700/share (from VND 27,600/share). The lower TP is primarily driven by downward FY23 earning revisions due to rising inflation risks affecting spending on discretionary in exporting countries. We also lower our target P/E to 6.7x, below TNG’s 10-year range owing to potantial risks from the rising discount rate. With an expected cash dividend of VND 800/share in the next 12 months, implying a total return of 46%, based on the closing price of Nov 8th, 2022

 

Underlying
TNG Investment and Trading

TNG Investment and Trading Joint Stock Company is a Vietnam-based company engaged in the garment industry. It manufactures, trades and exports garment products, such as jackets, coats, trousers, shorts, shirts and others. The Company also manufactures paper bags, plastic materials for plastic bag manufacturing, nylon raincoats and other materials for garment manufacturing activities. In addition, it is involved in the construction of residential, commercial and industrial buildings, as well as road freight transportation and space leasing. The Company trades fire alarm equipment, computers and peripherals, office equipment and telecommunications equipment. Moreover, it provides repair and maintenance services of computers and office equipment.

Provider
Viet Dragon Securities
Viet Dragon Securities

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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Analysts
Hoai Trinh

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