Viet Dragon Securities - Vietnam’s TG sector – Exports remain weak, eyes on brands’ destocking cycle consumption recovery

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Viet Dragon Securities

Hoai Trinh

Vietnam’s T&G sector – Exports remain weak, eyes on brands’ destocking cycle & consumption recovery

In the first four months of 2023, Vietnam's garment export turnover was USD 9.7 tn (-17.9% YoY). Due to the destocking cycle of brands, while consumption outlook remains weak, brands turned more conservative in placing new orders. Yarn export turnover also plummeted, recording USD 1.3 tn (-32.8% YoY) due to a significant decrease in imports from China (-37.0% YoY).

We expect that 1Q23 earnings will bottom for T&G companies. Due to the brand's destocking cycle, we expect new orders to improve in 2H2023. Hence, we still recommend that investors wait for clearer signs of textile & garment companies’ improved order volume. We still prefer buy-rated STK (TP of VND 32,500); maintain accumulate on MSH (TP of VND 40,000), neutral on TNG (increase TP of VND 20,200 for TNG on the back of higher 2023 earnings estimates); reduce-rated on TCM (TP of 39,800) due to high priced with limited catalysts in sight.

25/05/2023 6 EN

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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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Vietnam’s T&G sector – Exports remain weak, eyes on brands’ destocking cycle & consumption recovery

AWAITING THE BREAKOUT

Vietnam chilled-fresh meat market – Significant long-term potential but difficult to realize in

The decline has not come to a halt

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