Benefiting from the “wave” of public investment, a building material stock doubled after 3 months

Since the bottom in mid-November 2022, this “building material” stock has jumped up to 110%, much more impressive than the 19% gain of the VN-Index.

The heat of the phrase “public investment” has always attracted much attention from analysts. The first trading session of the week witnessed a strong breakthrough of the general market thereby narrowing the correction from early February. Behind the prosperity of VN-Index, the contribution of stocks cannot be ignored. government’s Invest. Beside HUT (+7.09%), VCG (+4.08%), LCG (+3%), FCN (+3%)… HT1 (+ 4.4%) stock of VICEM Ha Tien Cement also “take advantage” to increase sharply.

Although VN-Index has faced correcting pressure since the beginning of February, but HT1 stock still “sluggishly” went up from the bottom with an impressive increase. Since the bottom in mid-November 2022, this building material stock has jumped up to nearly 110%, much more impressive than the VN-Index’s 19% gain in the same period . The market capitalization accordingly also increased by more than 3,000 billion dong after 3 months, reaching 5,900 billion dong.

Public investment is the driving force for growth by capturing market share in the South

Disbursement of public investment is one of the main driving forces for HT1’s market price to go up strongly recently. In the updated report, Bao Viet Securities (BVSC) assessed that the oversupply situation has put cement manufacturing enterprises in front of stiff competition in terms of quality and price in product consumption.

However, by region, only the North and Central markets have oversupply, the Southern market is always in a state of oversupply. HT1 with the advantage of geographical location with 2 cement factories in Kien Giang and Binh Phuoc, and 3 cement grinding stations in the area of ​​Ho Chi Minh City, Khanh Hoa and Long An are convenient for road vehicles, meet the demand in the southern provinces.

Due to geographical advantages, BVSC believes that the selling price of Ha Tien 1 cement is always the highest in the industry in the markets. Accordingly, HT1 has always kept its gross profit margin and net profit margin higher than other companies in the same industry.

Currently, civil construction is still the main cement consumption segment in Vietnam. Therefore, consumption in the industry is still significantly influenced by the real estate market. Construction of infrastructure, accounting for 5% of total cement consumption. Bao Viet Securities commented that the increase in disbursement of public investment will help promote civil construction at locations where the road passes, thereby indirectly promoting consumption of the whole industry.

In the 2021-2025 public investment plan, infrastructure investment accounts for about 60% of the budget. The main focus projects are the North-South expressway component projects, Long Thanh Airport and ring roads. The North, the South, the North Central Coast and the region accounted for 66% of the total investment capital.

Thanks to its large market share in the Southeast, Southwest, South Central and Central Highlands regions, HT1 will benefit indirectly from key public investment disbursement projects in these areas .

China opens its economy, exports are no longer difficult

According to BVSC, in 2022, when the export volume of Cement and Clinker drops sharply, exporting cement companies such as Hoang Mai, Thanh Thang, Xuan Truong focus on the domestic market, creating great competitive pressure. with businesses focusing on the domestic market such as HT1.

Total export value in 2022 reached 1.4 billion USD (-20.9% over the same period), with a sharp decrease in the Chinese market. BVSC points out that the cause of the decline in exports in this market is mainly due to the persistence with the Zero-Covid policy in 2022. China accounted for about 50% of Vietnam’s cement and clinker export value during the period. August 2021 – March 3, 2022. The reopening of China will reduce domestic consumption pressure for the cement market in 2023 . The second largest cement export market is the Philippines. In the context of sea freight cooling down in the last quarters of 2022, exports to the Philippines also eased the pressure.

In addition, assessing the cost of input materials, which are coal and oil prices, BVSC said that the prices of these two commodities increased sharply from March to May 2022 and tended to decrease gradually in the last months. in 2022. The analyst team predicts that this cooling trend will continue in 2023 due to the global economic downturn accompanied by higher-than-expected petroleum supply from non-OPEC countries.

In summary, BVSC assesses that HT1’s 2023 business results will grow strongly on the low background of 2022 with the expectation that the export market will be less difficult to reduce domestic competition. In addition, the “warm” real estate market in the second half of 2023 will be the driving force for HT1 to increase production and reduce pressure on selling prices.

With the above analysis, BVSC forecasts that revenue growth of Ha Tien 1 Cement 1 in 2023 will reach 10.6% and profit after tax will increase by 112.4% over the same period , recording VND 9,861 billion and VND 9,861 billion respectively. 554 billion dong.

Duong Ngoc/Market life