VSC - Ready for a high and sustainable growth period
​“Vinconship JSC (VSC-HSX) is regarded as Vietnam’s leading private provider of container related services (trucking, warehousing and seaport services). The firm headquarters in Hai Phong but does have presences at the country’s major trade hubs. VSC’s competitive advantages are built on 30 year-operating experience, high services quality, integrated asset base (seaport-truck fleet-warehousing facility) and importantly expandable seaport capacity (new Vip Greenport put Phase 1 online in November 2015). In short-term, the initial operation of the new seaport may yet make a major impact on VSC’s earnings given pressure from operating cost and VSC’s ownership at this JV just over half (50.08%).
Nevertheless, in mid and long-term horizon, VSC is expected to be among the most beneficiaries from the increasing trade and export-import cargo activities fostered by FTAs and TPP. In addition, we believe that VSC would soon increase its holding stake at Vip Greenport JV that would eventually inject growth to its bottom-line. Besides, more FDIs coming to Northern Vietnam provinces also lessens the reliance on traditional trade partner China and means healthier sources of cargos. With all the above analyses, we come up with an ACCUMULATION recommendation for VSC share on the LONGTERM basis at target price of VND76,000/share (29% upside to VSC’s closing price on Apr 14 2016).“
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