(Yuanta) BCG (BUY+28.5%) – Entering a new growth cycle
Closing price (VND): 6,500
Target price (VND): 8,353
Floor: HOSE - Industry: Special Finance (ICB: L4)
Complete the restructuring of the Group. BCG underwent a restructuring of its in efficiency investments to focus on clean energy and real estate. We expect 2020 to be a hinge year for BCG to enter a more sustainable new growth cycle. ...
Business results in 6T2020 do not have many highlights but the profit drop will fall by 2h2020. BCG noted that LNST belonged to shareholders of the parent company reached VND17 billion in 6T2020, down -75% over the same period, due to the decrease in profit from divestment of projects, sales and management costs increased sharply, while the key business segments have not contributed profits. However, we believe that the KQKD of the Group will have a strong improvement in the second half of the year thanks to the record profit from the real estate sector, For 2020, we forecast that BCG will record LNST belonging to shareholders of the parent company reaching VND 146 billion, growth of +28% YoY, equivalent to P/E of 5.6x.
Ambitious plan for the energy sector. BCG has ambitions to become one of the largest clean energy developers in Vietnam with the target of total capacity set to reach 2GW by 2025. Currently, the Group has invested 2 solar projects (NLMT) in Long An with a total capacity of 141MW and is implementing the Phu My NLMT project with a capacity of 330MW. In addition, BCG also plans to invest in wind power and attic voltage projects.
Enter a new growth cycle from 2020. The real estate sector will contribute significant profits in 2020 and 2021, while BCG's NLTT projects will begin to make significant contributions from 2021 when large-capacity plants such as GAIA power generation all year and Phu My house start operating.
Price and recommendations
We recommend buying BCG shares at a target price of VND8,353/share, equivalent to an increase of 28.5% from the current price, including 8% cash dividend.