Vietnam Today Daily Market Commentary

18 March 2011

Marc Djandji, CFA, Head of Research

marc.djandji@vcsc.com.vn,
Bottom fishing sentiment return –
+84 3 3814 5588, ext 116
SJS visit note
Hoai Doan, Senior Economist
hoai.doan@vcsc.com.vn
+84 3 3814 5588, ext 139
Market Commentary
By Hoa Hoang, Analyst, hoa.hoang@vcsc.com.vn

The newest estimate that the CPI for March will be about 2.2% seems to have
been well received by Vietnamese investors, who stepped in to fill the selling
orders foreign investors flooded the market with. Liquidity improved
significantly with 53.5 million shares traded, valued at 1,307bn, up 48.6% in
volume and 60% in value. Market breadth improved with 194 winners and
only 49 laggards as many small and medium cap stocks closed at ceiling
price. Bottom fishing strengthened to drive the market upward and close near
the intraday high at 461.08 points, up 0.55 points (0.12%). Without being
affected by large cap stocks, HNX continued its third consecutive increasing
session, up 3.1% to close at 95.12 points.

Foreign investors suddenly offloaded many blue chips on HSX, with a net sell
value of VND215bn, the largest sell in a day since September 2009, resulting
in a net selling of VND224 billion on the bourse month to date. But they
remained net buyers of VND34.93 billion on the Hanoi Stock Exchange today.
Vietinbank (CTG) and Vinaconex (VCG) were their largest net buy stocks,
accumulating VND83bn in CTG and VND26bn in VCG.

Domestic prop desks were net buyers of 86bn, in which 55bn was in short-
term bond and 22bn in the fund certificate VFMVF1.

Although the index just gained minimal points at the end of the trading
session, stronger buying force is the most positive factor as we saw
unmatched bids for 20 million shares on each trading floor. We expect the
market to test the resistant level at 470 points next week.

Economic Update
By Hoai Doan, Economist, hoai.doan@vcsc.com.vn

In the foreign exchange market, the VND was mixed today in the interbank
market and the grey market. The VND gained 28bps and traded at
VND20,935/USD at mid-day in the interbank market. While we saw the VND
weaken 18bps on Friday cf. Thursday and traded at VND21,455/USD at mid-
day in the grey market. Most banks are willing to sell dollars for importers but
refuse to sell dollars to individuals at the official upper ceiling rate.

See important disclosure at the end of this document

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Vietnam Today Daily Market Commentary
18 March 2011

In the money market, the O/N rate traded at 16% pa, up by 250 basis point cf. Thursday.
We expect the monetary condition remain tight due inflation concerns and foreign exchange
risks. March CPI is expected to come at 2.2% MoM, according to a government report at the
th
12 National Assembly, marking the highest level since June 2008. As such, the March
figure could reach 13.9% YoY and 6.15% YTD.

Looking forward, we could expect MoM April CPI to be significantly lower cf. March thanks
(1) to the fact that most of the effect of the lifting of price controls will mainly be felt in March,
and (2) to relatively stable foreign exchange during April from tight monetary conditions.

SJS Visit note

By An Truong, Analyst, an.truong@vcsc.com.vn

Key notes:
- SJS posted VND 1,047bn revenue and VND 641bn profit before tax (PBT) for 2010,
missing its PBT goal of VND 1,000bn as set by management at the beginning of the
year.

- The company hardly sold any products (houses, land lots) in 2010, and its revenue
mainly came from unearned revenue in 2009 from the sale of 26ha in South An
Khanh. This explained why SJS missed its revenue and profit goal for the year.

- The reason SJS did not sell its land in South An Khanh was due to the change in
the development plan of the area. When Ha Tay merged into Ha Noi in 2009, many
projects in the West, such as the South An Khanh project, are required to change to
comply with the new development plan in 2010. SJS has changed its development
plan for the South An Khanh project, and the company expects to get approval from
Ha Noi authority in 1 or 2 months. Once this is done, it can start selling land in
South An Khanh again.

- The company sets its revenue and net profit goal for 2011 respectively at VND
3,000bn and VND 650bn. We think this is feasible, and SJS may even outperform
this target, which we will explain later.

- In 2010, SJS initiated 3 projects, acquiring land in (1) Hòa Hải – Đà Nẵng, investing
VND 1,010bn, (2) Phố Nối – Hưng Yên: VND 220bn, and (3) Trường Lưu – HCM:
VND 168bn.

- The company has sold the first project in Đà Nẵng in Q1-2011, gaining c. VND
100bn. Although it did not make a good profit, we think the sale is a good move as
the property market in Da Nang is cooling down, and the trend of developing luxury
seaside villas has lost its steam. It seems that they got out just in time!

- The second project – Phố Nối, Hưng Yên is about 26km from Ha Noi. This 100ha
land is to be developed into residential area, with townhouse and villas are the main

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Vietnam Today Daily Market Commentary
18 March 2011

products. The company plans to start selling 10ha (out of 40ha total area)
commercial land in early Q2. We estimate a gross profit margin around 30%.

- Văn La – Văn Khê, the second largest project of SJS, is expected to start
contributing profit this year.

- We estimate the company could achieve VND 1,100bn profit before tax and VND
825bn net profit, beating its profit goal by c.27% as below

Revenue 2011 3,000 Profit before tax 2011 1,100

Da Nang 1,088 Da Nang 133

South An Khanh 1,000 South An Khanh 600

Pho Noi 600 Pho Noi 180

Van La - Van Khe/Others 312 Van La - Van Khe/Others 187

Analyst opinion
Although SJS’s result in 2010 was disappointing, we think the company will perform better in
2011 as the South An Khanh, the largest project in its portfolio, is approved for further
development and sale. In essence, the stock’s price has lost 38% from its average price in
2010, making it one of the top losers in the real estate sector so far.

At the current price VND 50,000 per share, SJS is trading at 7.6x earnings FY2011
(management forecast) or 6.0x (VCSC forecast). Our target NAV per share, which is
contributed 75% by the value of South An Khanh – calculated on a DCF basis for a horizon
of 10 years – comes at VND 56,000, implying 12% upside from the current price. The
reason we use a DCF valuation over 10 year for South An Khanh is because the company
does not have any intention of selling its land here in a short period of time, and therefore
the cost of capital over the years should be incorporated. Considering the NAV per share as
an intrinsic value, the reasonable PE 2011, and an optimistic prospect for the year, we think
SJS is a good trading opportunity thanks to its high beta and the fact that it has been
unloved over the past year. For longer term holding, we are concerned over the price bubble
of the property market in Ha Noi, and corporate governance issue of the company.

Notable Corporate Actions (events-21 March 2011) :

XMC, TXM, DIC và ICG: ex-right date of cash dividend of 2010, ratio VND 1,500/share, VND
300/share, VND 1,200/share and VND 1,650/share.

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Vietnam Today Daily Market Commentary
18 March 2011

Highlight News :
Vietinbank Licensed to List 168.5M New Shares on HOSE
Vietnam Commercial Joint Stock Bank for Industry & Trade (CTG) or Vietinbank, has received
approval from the Hochiminh Stock Exchange (HOSE) to list an additional 168.58 million shares on
the bourse.
The additional listing will help the bank raise its total listed volume on the bourse to 332 million shares.
The shares were offered to IFC Capitalization (Equity) Fund, L.P (Equity Funds) and International
Finance Corporation (IFC) recently.
After the acquisition, IFC holds over 55.28 million shares, equal to 3.28% stake, while IFC
Capitalization Fund owns 113.29 million shares equal to 6.72% stake. It helped Vietinbank scale up its
registered capital to VND16.858 trillion.The lender had a surplus of VND1.854 trillion ($88.7 million)
from the sale.

Vietnam Construction Firm C47 Targets Net Profit of VND32B in 2011

Construction Joint Stock Company No.47 (C47) targets a net profit of VND32 billion ($1.52 million) this
year, up 9.6% from a year earlier, equal to an earnings per share of VND4,642 compared to
VND3,650 last year.
Its revenues are expected to fall to VND1.5 trillion from VND1.58 trillion in 2010, a local financial
website reported.
The building company will pay a dividend equivalent to VND2,000/share.
C47 is now carrying out such projects as Nuoc Trong water reservoir, Van Phong irrigation work,
hydropower plants of Dong Nai 4, Song Bung 5, Serepok 4A and Thuong Kon Tum.
It currently manages Quy Nhon’s Hai Au four-star hotel in the central province of Binh Dinh.
C47, with a registered capital of VND80 billion ($3.81 million), will debut all eight million shares on the
Hochiminh Stock Exchange (HOSE) on March 21.

Vietnam SEC to Pay Share Dividend at 1-for-4 Ratio in 2011

Gia Lai Sugar - Thermal Power JSC (SEC), listed on the Hochiminh Stock Exchange, will pay a share
dividend at a 1-for-4 ratio to shareholders this year.
Shareholders will receive one new share for every four existing shares, the firm said in a statement
sent to the bourse.
The share issuance will help the firm scale up its registered capital to VND181.32 billion ($8.63 million)
from current VND145.05 billion.
In 2011, SEC targets a net profit of VND95 billion, compared to VND60.02 billion in 2010, on revenues
of VND526.03 billion.

Vietnam Seafood Exporter AGF to Pay Cash Dividend of VND1,000 Apr 15

An Giang Fisheries Import Export JSC (AGF), listed on the Hochiminh Stock Exchange, will pay a
cash dividend of VND1,000/share on record as of Mar. 25.
The payment will be made April 15, the company said in a statement sent to the bourse.

In 2010, it netted a profit of VND48.41 billion ($2.3 million) on revenues of VND1.7 trillion compared to
VND8.13 billion and VND1.334 trillion in 2009, respectively. The full-year earnings per share was
VND3,765.

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Vietnam Today Daily Market Commentary
18 March 2011

Vietnam Cable Producer CSG to Pay Cash Dividend of VND1,200 Apr 15

Saigon Cable Corp. (CSG), listed on the Hochiminh Stock Exchange, will pay a cash dividend of
VND1,200/share on record as of Mar. 29.
The payment will be made April 15, the firm said in a statement sent to the bourse.
It targets a pretax profit of VND40 billion ($1.9 million) on revenues of VND480 billion this year.

Vietnam Food Firm SAF Plans to Give Bonus Shares at 1-for-2 Ratio
Safoco Foodstuff JSC (SAF), listed on the Hanoi Stock Exchange (HNX), plans to give 1.52 million
bonus shares to shareholders at a 1-for-2 ratio this year.
The firm will seek shareholders’ approval for the plan, the firm said on its website.
SAF targets a net profit of VND13.5 billion ($640,000) compared to VND18.12 billion in 2010, and a
dividend payout equivalent to VND2,000/share.

PPC: EVN Sells 47.1Mln Shares

Pha Lai Thermal Power JSC. (PPC) announces the selling result of its major shareholder - Vietnam
Electricity (EVN) as follows:
EVN sold 9,787,050 shares or 3% stake to An Binh Joint Stock Bank (ABBank); sold 37,321,280
shares to EVNFinance on December 29 last year through put-through; and failed to sell 5,996 shares
via order-matching.
Currently, EVN holds 166,391,896 PPC shares or 51% stake from its previous holding of 213,500,226
shares or 65.44% stake in PPC.

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 Vietnam Today Daily Market Commentary
18 March 2011

HOSE Index +/- % +/- HNX Index +/- % +/-

VN-index 461.08 +0.55 +0.12% HNX-index 95.21 +2.83 +3.06%
Trade vol (mn shares) 52.95 47.08% Trade vol (mn shares) 53.11 +62.65%
Trade Value (VND bn) 1,252.51 53.50% Trade Value (VND bn) 828.34 +59.12%
Total bid volume Unmatched bid vol Total bid volume Unmatched bid vol
89.96 44.44 79.39 29.61
(mn shares) (mn shares) (mn shares) (mn shares)
Total ask volume Unmatched ask vol Total ask volume Unmatched ask
70.19 24.67 59.84 10.06
(mn shares) (mn shares) (mn shares) vol (mn shares)
Bid – Ask Unmatched bid – Bid – Ask Unmatched bid –
19.77 19.77 19.55 19.55
(mn shares) Unmatched ask (mn shares) Unmatched ask
Increase Decrease Unchanged Increase Decrease Unchanged
194 49 44 262 57 60
TOP VOLUME – HOSE TOP VOLUME – HNX
Ticker Open Close Volume % Market Ticker Open Close Volume % Market
CTG 30.2 31.7 4,538,720 9.97 PVX 17.1 18.2 5,663,500 11.36
SSI 23.9 25.0 3,335,320 7.33 VND 16.3 17.4 4,993,100 10.01
HAG 45.5 44.5 2,462,460 5.41 KLS 9.9 10.5 4,372,100 8.77
REE 13.4 13.8 1,603,030 3.52 VCG 21.4 22.8 3,655,700 7.33
VCB 30.0 31.5 1,402,730 3.08 SHN 18.3 18.9 2,720,300 5.45

TOP FOREIGN VOLUME - HOSE TOP FOREIGN VOLUME - HNX

Ticker Net Buy Ticker Net Sell Ticker Net Buy Ticker Net Sell
CTG 2,629,180 HAG 1,667,510 VCG 1,169,700 PVI 226,000
GMD 351,380 DVD 1,115,650 PVX 337,200 PSI 97,900
HPG 101,830 REE 989,080 PVS 282,500 WSS 47,200
SBT 50,000 CSM 878,000 KLS 87,000 HBS 30,000
VFMVF4 26,000 PVF 873,650 AAA 30,000 S96 23,200

BOND ACTIVITY MARKET VALUE LAST 10 DAYS VN GOVERNMENT BOND YIELDS

Term 18/3 17/3 16/3 15/3 14/3
1 yrs 11.31 11.30 11.30 11.29 11.19
2 yrs 11.51 11.53 11.53 11.52 11.37
3 yrs 11.61 11.64 11.64 11.66 11.54
5 yrs 11.73 11.77 11.77 11.76 11.69
7 yrs 11.67 11.69 11.68 11.68 11.60
10 yrs 11.77 11.78 11.75 11.76 11.73
15 yrs 11.81 11.82 11.82 11.81 11.79
Units: VND bn Source: Reuters

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Vietnam Today Daily Market Commentary
18 March 2011

VN-INDEX MOVEMENT LAST 10 DAYS HNX-INDEX MOVEMENT LAST 10 DAYS

VN-index Market value, units: VND bn HNX-index Market value, units: VND bn

FOREIGN NET ACTIVITY LAST 10 DAYS HOSE FOREIGN NET ACTIVITY LAST 10 DAYS HNX

Units: VND bn Units: VND bn

FOREIGN ACTIVITY – HOSE FOREIGN ACTIVITY – HNX

Volume Value Volume Value
Thousand % VND bn % Thousand % VND bn %
Bid 9,456.09 17.67 % 301.46 23.06 % Bid 2,541.70 4.79 % 48.95 5.91 %
Ask 16,908.56 31.60 % 516.47 39.50 % Ask 1,037.00 1.95 % 14.02 1.69 %
Bid - Ask -7,452.47 -13.93% -215.00 -16.44% Bid - Ask 1,504.70 2.84% 34.93 4.22%

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Vietnam Today Daily Market Commentary
18 March 2011

Contacts
Head office Hanoi branch
67 Ham Nghi, District 1, HCMC 18 Ngo Quyen St, Hoan Kiem District, Hanoi
+84 8 3914 3588 +84 4 6262 6999

Transaction office Transaction office

136 Ham Nghi, District 1, HCMC 236 - 238 Nguyen Cong Tru, District 1, HCMC
+84 8 3914 3588 +84 8 3914 3588

Research

Head of Research Research Team

Marc Djandji, M.Sc., CFA, ext 116 +84 8 3914 3588
marc.djandji@vcsc.com.vn research@vcsc.com.vn

Manager, Hoang Thi Hoa, ext 146
Senior Economist, Doan Thi Thu Hoai, ext 139
Senior Analyst, Truong Vinh An, ext 143
Senior Analyst, Dinh Thi Nhu Hoa, ext 140
Senior Analyst, Pham Cam Tu, ext 120
Senior Analyst, Vu Thanh Tu, ext 105
Senior Analyst, Ngo Phung Hiep, ext 130
Analyst, Hoang Huong Giang, ext 142
Analyst, Nguyen Thi Ngoc Lan, ext 147

Institutional Sales & Brokerage

Foreign Sales Vietnamese Sales

Michel Tosto Nguyen Quoc Dung
+84 8 3914 3588, ext 102 +84 8 3914 3588, ext 136
michel.tosto@vcsc.com.vn dung.nguyen@vcsc.com.vn

Retail Sales & Brokerage

Ho Chi Minh City Hanoi

Chau Thien Truc Quynh Le Duc Cuong
+84 8 3914 3588, ext 222 +84 4 6262 6999, ext 333
quynh.chau@vcsc.com.vn cuong.le@vcsc.com.vn

Disclaimer
Copyright 2010 Viet Capital Securities Company. All rights reserved. This report has been prepared on the basis of
information believed to be reliable at the time of publication. VCSC makes no representation or warranty regarding
the completeness and accuracy of such information. Opinions, estimates and projection expressed in this report
represent the current views of the author at the date of publication only. They do not necessarily reflect the opinions
of VCSC and are subject to change without notice. This report is provided, for information purposes only, to
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