[VHC/HOLD/TP: VND 69,500] - Purchasing power returns


Update recommendation HOLD, target price at VND 69,500

Vinh Hoan Corporation is the leading pangasius producer in Vietnam, accounting for over 15% of the country's total pangasius export turnover. 2023 was a challenging year for the pangasius industry in general and Vinh Hoan in particular, as revenue was severely affected by a sharp decline in the US market, VHC's main export market. However, in December 2023, pangasius exports to the US grew positively for the first time compared to the same period in 2022. Next in January 2024, seafood exports showed positive signs when increasing by 60.8% YoY, in which pangasius exports are forecast to recover strongly. Therefore, in 2024 we expect the company's business situation to become more positive when macroeconomic stability helps the purchasing power of the markets recover. We changed our EV/EBITDA to P/E valuation method to more accurately reflect the industry's evolving outlook. Based on the FCFF and P/E methods, with a weight of 50:50, the target price for VHC is VND 69,500 (after stock dividend of 20% and cash dividend of 20%).

VHC-Vinh Hoan Corp.
Diem Ngo

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