The stock market has witnessed a strong performance since the beginning of the year, especially in the first quarter. This positive momentum showed signs of slowing down in the second quarter as profit-taking pressures increased near the psychological resistance level of around 1,300 points. While the market experienced a few deep corrections, it also rebounded strongly. Overall, the uptrend was maintained, with the VN-Index recording a 13.55% increase year-to-date.
Investors had a high probability of selecting stocks on the HoSE that outperformed the VN-Index, with a success rate of 40%. Many “hot” stocks witnessed significant gains of over 50% since the beginning of the year, including well-known names such as FPT, The Gioi Di Dong (MWG), Techcombank (TCB), GVR, Viettel Construction (CTR), Viettel Post (VTP), and FPT Retail (FRT). Some stocks even doubled in value, such as Vietnam Airlines (HVN), LPBank (LPB), and Hoa Chat Co Ban Mien Nam (CSV)
Data as of July 5, 2024
On the other hand, 60% of stocks on the HoSE underperformed the VN-Index year-to-date, with 124 stocks even declining in value. Notable “names” on this list include Vingroup (VIC), Vinhomes (VHM), Vincom Retail (VRE), Vietjet (VJC), Sabeco (SAB), Novaland (NVL), Dat Xanh (DXG), Viglacera (VGC), and VNDirect (VND)
It is evident that there is a divergence among different sectors. Technology, retail, and aviation are among the sectors that are supported by positive macro stories and are expected to have a favorable impact on business performance. For instance, the technology sector is benefiting from the global AI and semiconductor trends, while the retail sector is profiting from VAT reductions and increases in the basic salary…
In contrast, the real estate market remains relatively subdued, causing financial challenges for companies in this sector. Bond maturity pressures continue to weigh on cash flow, worrying investors. The difficulties faced by real estate businesses have also affected many banks. Despite the widespread “dividend” wave in the past, there is still a clear divergence among bank stocks.
This divergence among sectors and stocks is the reason why the VN-Index has struggled to break through the 1,300-point mark despite multiple attempts in the last three months. This trend is expected to continue in the coming months. The index may remain range-bound, but many stocks will continue to rise, breaking new highs, while others will persistently search for a bottom.
Sectors that could lead the market in the second half of the year
In the report “Overcoming Challenges, Marching Forward” by MBS, analysts predict that the VN-Index has not yet peaked and could reach 1,350-1,380 points by the end of the year, supported by large-cap stocks. The report also highlights sectors with optimistic prospects for the second half of 2024.
For the banking sector, MBS forecasts improved profit growth from the low base last year. Credit will focus on banks that can “sacrifice” NIM more than the industry average or have stronger asset quality. Meanwhile, asset quality is expected to deteriorate by the end of this year compared to the first quarter of 2024. The profits of the banks under coverage are predicted to increase by 15.3%. In terms of valuation, MBS Research also believes that the current valuation of banks is very attractive, with the P/B ratio being lower than the 1-year, 3-year, and peak levels seen in 2021.
The residential real estate sector is expected to show positive recovery signals as supply recovers and interest rates become more attractive to stimulate market development. The completion of the legal system will contribute to the sustainable development of the real estate market in terms of both supply and demand. Additionally, capital restructuring and M&A activities in real estate projects are anticipated to be vibrant in the remaining months of 2024.
Regarding the industrial real estate sector, MBS holds a positive outlook for the second half of 2024. Stable land rental prices, high demand for land thanks to increased domestic and foreign investment, positive FDI inflows, and the construction of new industrial parks will be bright spots for this sector. However, challenges remain, including the intensifying competition for FDI with other countries in the region, the risk of power shortages during peak production seasons, and the global minimum tax policy.
The steel sector is expected to enter a “new growth cycle,” according to MBS. Steel companies’ profits are projected to grow by 40% in 2024 due to several factors: (1) The steel industry may recover, supported by positive signals from the real estate sector. (2) Gross profit margin is expected to rebound to 13% due to an 8% yoy increase in output prices and a roughly 4% yoy decrease in raw material prices thanks to stable supply. Moreover, steel companies may have the opportunity to expand their market share due to anti-dumping duties.
For the retail sector, MBS anticipates a consumption recovery. MWG is expected to benefit from the rebound in non-essential consumer goods from the low base in 2023, with total revenue for 2024 estimated to reach VND 128,503 billion (+9% svck). MBS also expects BHX to break even by mid-2024 and generate profits of around VND 500 billion.
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“DPM, the industry leader, achieved a remarkable feat by generating a profit post-tax of over 90% in 2023, marking its lowest net earnings since 2019.”
Astonishingly high price for old and dilapidated apartment buildings reaching nearly 200 million VND/m2, rivaling the most luxurious condominiums in Hanoi
Old collective apartments with prices starting from 100 million VND/m2 are usually the first-floor units that can be used for commercial purposes, while the upper-floor units are priced at 60-80 million VND/m2 for residential purposes.
