VJC - Growth Speed to Watch Closely
VJC is a rare growth stock in the market. Having a core business growing at over 40%/year in the past five years is not common. As a result, the stock is trading at a P/E 2018F of 26x (EPS adjusted for sale and leaseback earnings). However, we are concerned that passenger growth from 2020 onward may slow down, while performance efficiency may decline due to the aggressive expansion of the fleet, higher oil prices or currency fluctuations.
Accordingly, we only apply a target P/E of 18x for VJC in 2019. Combined with the EV/EBITDAR of 8x, our target price for VJC is VND 170,000. We recommend to ACCUMULATE the stock with a total upside of 19.
Vietjet Aviation Joint Stock Company (Vietjet) is a Vietnam-based company primarily engaged in airlines sector. The Company's leading business activities include the transportation of passengers and cargo via scheduled flights, the operation of chartered flight services, the rental of aircraft spaces for advertisement, the trading and leasing of aircrafts, as well as the provision of other support activities for air transport 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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