A director at Nam Kim Steel JSC sold 13,104,000 shares at 0.000VND and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years c...
In 2Q2023, NKG recorded revenue of VND 5,500bn (USD 232mn, -24%YoY, +26%QoQ), with sales volume of 236.6 thousand tons (-9%YoY, +21%QoQ). Of which, c. 67% was to exported markets (ASEAN, EU) owing to the demand recovery, especially from 2Q23. The 2Q gross profit margin (GPM) was increased to 9% (from the low-level of 3.1% in 1Q23), and gross profit reached VND 496bn (USD 20.9mn, +260%QoQ), when the main material (Hot Roiled Coil - HRC) is trade at the average price of USD 637/ton (-9% QoQ). It...
Sluggish demand in both local and global GI/GL and steel pipe markets is going to continue its pressure on NKG’s business performance in the intermediate and long term as HRC price could move unfavourably for the company, even though Q2/2023 earnings could be a relief because of low-cost inventory. Toward the end of the year, NKG is going to face up with slow recovery in steel demand, large inventory holding and HRC’s short-term downtrend. As NKG’s business performance has become unstable and di...
Declining demand and high input price drove down profits in 9M2022. Revenue posted VND 18,771 billion (USD 782 mn, -3% YoY), whereas PAT tumbled by 84% YoY to VND 290 billion (USD 12.1 mn). 9M2022 gross margin decreased to 9% (9M2021: 16.6%), with a slump to -3.6% in Q3. For 4Q22, consumption will be worse than Q3. Sales will rely mainly on domestic market with domestic GPM less negative than export margin. High-priced inventory, selling price drop combined with provisions for inventory deval...
“We estimate NKG’s fair value at VND 25,200/share in a one-year vision, reflecting the prospect of global high inflation and high uncertainty of the global supply chain in the coming quarters. We believe Q3 is the trough of 2022 profits but the growth momentum will not come back sooner than Q3/2023. For the longer term, growth engine will be enhanced from 2024 to 2027 in terms of both volume and profitability with the investment and operation of the new factory Nam Kim Phu My. At the current mar...
Overseas prices have stopped falling; domestic prices started to regain. Domestic consumption to recover from September amid high competition. Gloomy outlook for the bottom line of flat steel producers in Q3 before sunshine comes from Q4. We currently have an ACCUMULATE recommendation on NKG with the target price of VND 25,100/share.
Europe's steel prices have been rising fast with pressures from increasing energy prices and the potential disruption of steel supply from Russia and Ukraine. HRC prices in this area have increased by 35% from US$1,054/ton to US$1,419/ton in the last month. Hence, exporting to Europe can bring a higher gross margin in H1 22 for Vietnamese producers such as HSG, NKG, HPG. Due to the demand recovery after the winter season and the increasing HRC price gap between Europe and Vietnam, the orders...
NKG can seize opportunities in foreign markets to maximize profit. The company showed its flexible sales strategy in 9M2021 by reallocating production volume to the most profitable markets, such as Europe and North America. In 4Q, the gross margin is going to decrease in Europe, but will still be attractive in North America. With its flexible strategy, we expect NKG to increase its selling volume in North America and offset partially decreasing profitability in Europe. In the long-term, decarbon...
The outperformance of smaller market cap stocks compared with the returns on VN Index in July was generally in line with our expectations. As such, reducing the weight on our recommendations on some large cap stocks in steel and banking sectors, namely HPG, VCB, ACB, in the last month has helped lessen the impact of the market downturn among our coverage. Overall, 10 out of our 11 Buy recommendations have outperformed the VN Index in the last month. Robust Q2 21 earnings growth and the market...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
We expect NKG to record the highest quarterly NPAT ever in Q2 owing to strong demand overseas, increasing hot-rolled coil (HRC) prices, and higher inventory. We forecast that the company’s revenue and NPAT will reach VND6,113bn and VND503bn in Q2, increasing by 164% yoy and 2,806% yoy, respectively. For H2 21, the outlook for HRC prices is better than our expectations as prices for HRC delivered in Q3 will be more than US$1,000/ton. The company’s NPAT in Q3 will be roughly VND230bn, significa...
STEEL EXPORTERS CAN SEIZE OPPORTUNITIES IN THE COATED STEEL SEGMENT Coated steel consumption in Europe and North America has been stronger in Q1 21 due to expectations that economies will recover with Covid vaccine rollout. Besides, flat steel prices are very different between Vietnam and these markets, leading to higher profitability for exporters. Many domestic producers will run their factories at full capacity until June to meet the robust demand. PUBLIC INVESTMENT IN INFRASTRUCTURE PROJE...
Seizing opportunities from the European and North American markets will help NKG to improve both sales volume and gross margin in H1 21. The company can then reallocate its sales volume to the domestic market in H2 21 if the demand weakens from foreign markets. Overall, we think NKG can achieve substantial earnings in 2021 via both volume growth and higher HRC price. Using a P/B of 1.1x and P/E of 9.5x, we estimate NKG’s fair value at roughly VND24,700 per share. Although NKG’s NPAT can incre...
Seizing opportunities from the European and North American markets will help NKG to improve both sales volume and gross margin in 1H2021. Afterwards, the company can reallocate its selling volume to the domestic market in 2H2021 if the demand from foreign markets becomes weaker. Overall, we think NKG can achieve substantial earnings in 2021 via both volume growth and higher HRC price. Using a P/B of 1.1x and P/E of 9.5x, we estimate NKG’s fair value is roughly VND 24,700 per share. Although NK...
The total consumption in the Vietnamese steel market has been lower during the first eight months of 2020 compared to the same period last year, but monthly figures have showed improvement. All steel sub-segments went down in terms of sale volume in 8M 20 (Figure 1 in full report) compared to 8M 19, except for coated steel. Hot rolled coil suffered the strongest reduction while construction steel sale volume went down by nearly 6% for the first time since the global financial crisis in 2008. ...
NKG is facing several barriers in order to achieve earning growth in 2018. The rapid hike of HRC price in 1H2018 has put huge pressure on NKG’s profitability. Moreover, harsh competition in the domestic coated steel market also affected its gross margin and caused rising interest expense, further lowering its net margin. These short-term pessimistic catalysts have been depressing the share price, while the long-term advantages regarding output capacity and selling ability remain the positive ele...
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
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