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Vinaship Joint Stock Company

Ticker: VNA

Reuters: VNA.HM

Bloomberg:VNA VN

Industry: Shipping

Plan 2015: Continue to liquidate ships to offset profit


plunge from shipping

Visit Note
March 2015

Continue to liquidate Ha Nam and Ocean ships: These two ships have been

Recommendation
Target price (VND)

4,600

Market price (05/03/2015)


Expected return

STOCK INFORMATION
Exchange

HSX

52-week price range

VND2,600-4,500

Capitalization

VND90 billion

Outstanding shares

20,000,000

10-day average volume

58,649

% foreign ownership

2.67%

Foreign ownership limit

49%

Dividend per share

Dividend yield

Beta

0.89

PRICE MOVEMENT
YTD

1M

3M

VNA signed a time charter contract till end-Q1/2015: VNA has five ships in 7month time charter contracts with South Korean partners since Q3/2014. These
ships all have larger capacity and younger age than the remaining ships. New
contracts will be considered for signing at the end of Q2/2015. Amid the
oversupply of Paramax ships (expected to increase by 3-4% in 2015) and the BDI
going down to 529 from its peak of 1,484 in November 2014, VNAs time charter
activities are expected to continue to experience difficulties in 2015.
Self operated fleet still incurs high risks: The remaining ships are self
operated by VNA, used for shipping rice for Vinafood to the Philippines. In
addition, VNA also ships other dry commodities such as coal, clinker, steel,
fertilizer, etc. to the Philippines, Thailand and Indonesia. The operation of this
fleet incurs high risks arisen from port infrastructure (causing long time of cargo
unloading and high costs) and unexpected natural disasters in the target
countries. The oil price tumble did not bring high benefits to VNA as the BDI also
went down along with the downward trend of oil prices.

6M

No plans for expansion in 2015: At present, VNA is still facing great difficulties
and has to liquidate ships to supplement working capital; as a result, it has no
plans to purchase new ships, expand shipping routes and seek for new orders
this year.

VNA

25%

9.8% 21.6% 50.0%

VN-Index

9.4%

7.0%

3.8%

fully depreciated. Ha Nam ship is expected to be liquidated within Q1/2015. Ha


Nam ship (aged 31) is pending for sale. VNA has already found out a partner to
purchase this ship but not yet reached an agreement, with expected price at
around VND16-17 billion. The liquidation of Ocean ship (aged 30) is expected to
be completed in Q4/2015, with selling price not less than VND17 billion.

-6.9%

Analyst
Thao Dinh
(84 4) 3928 8080 ext 607
dinhthithuthao@baoviet.com.vn

Company visit note

VNAs fleet
No

Name

Year

Place of
manufacturing

Capacity
(DWT)

Operation
year

Binh
Phuoc

1989

Japan

7,054

2001

Ha Nam

1985

Japan

6,500

2000

Ha Tien

1986

Japan

7,018

2001

My An

1994

Japan

8,294

2003

Self operated

My Hung

2003

Vietnam

6,500

2003

Self operated

My Thinh

1990

Japan

14,348

2004

Self operated

My Vuong

1989

Japan

14,339

2004

Self operated

8
9
10
11
12
13

Vinaship
Ocean
Vinaship
Diamond
Vinaship
Gold
Vinaship
Pearl
Vinaship
Sea
Vinaship
Star

State
Time charter
Liquidated in Q4/2014
Self operated Expected to be
liquidated in Q1/2015
Self operated Liquidated in Q4/2014

1986

Japan

12,367

2007

Time charter
Expected to be
liquidated in Q4/2015

1996

Japan

24,034

2009

Time charter

2008

Vietnam

13,245

2008

Time charter

1996

Japan

24,241

2009

Time charter

1998

Japan

27,841

2010

Time charter

1996

Japan

23,949

2011

Time charter

BVSCs comment: VNA owns a fleet with high life-span, which has
significantly affected the companys ability to transport on international routes.
VNA would be attractive to investors in Q1/2015 if the company can liquidate
Ha Nam vessel to improve its profits.

Company visit note

REPORT COMMENTARY
Target price: is the analysts valuation based on analysis of the companys
business performance, potentials, development prospects and potential risks to
determine the share price. Valuation methods commonly used include
discounted cash flow (FCFE. FCFF. DDM); NAV-based valuation; comparative
indicators (P/E. P/B. EV/EBIT. EV/EBITDA...). Selecting any method will
depend on each industry, company and share features. Market sentiment also
can affect the valuation of the target price.

RECOMMENDATION SYSTEM
BVSCs recommendation system is based on the increase/decrease of the
share price to the target price. There are three levels of recommendation with
the corresponding difference in magnitude from low to high. Investors should
be noticed that investment recommendations can be changed at the end of
each quarter after BVSCs corporate reappraisal.
Recommendation levels
Recommendation Explanation
OUTPERFORM

Target price above 15% higher than market price

NEUTRAL

Target price between 0% and 15% higher than market


price

UNDERPERFORM Target price lower than market price

DISCLAIMER
All information in this report has been verified carefully and is deemed to be the most reliable; however, Bao Viet
Securities Joint-stock Company (BVSC) shall take no responsibilities with regard to the accuracy and completeness of the
information provided herein. Viewpoints, comments and assessments in this report are of personal opinions of analysts at
the time of report writing and are subject to changes at any time. Therefore, we have no obligation to inform investors.
This report is for the purpose of providing information and does not intend to advise the readers to buy, sell or hold any
securities. Readers should only use this analysis report as a source of reference.
BVSC can have business cooperation and investment activities with or provide investment banking services to the
subjects mentioned in this report. Readers should be noticed that BVSC can have conflicts of interest with investors when
they follow recommendations in this analysis report.

RESEARCH & INVESTMENT ADVISORY DEPARTMENT


Bao Viet Securities Joint Stock Company
Head office: 8 Le Thai To. Hoan Kiem Dist., Hanoi

Branch: Floor 8 Bao Viet Tower, 233 Dong Khoi, Dist. 1, HCM City

Tel: (844) 3928 8080

Tel: (848) 39146888

Fax: (844) 3928 9888

Fax: (848) 39147999

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