SEAPORT – LOGISTICS INDUSTRY
OUTLOOK 2021
RETURN TO DOUBLE DIGIT GROWTH
© RESEARCH DEPARTMENT ǀ 11.03.2021
2
SEAPORT – LOGISTICS INDUSTRY UPDATES
INDUSTRY OUTLOOK 2021
RECOMMENDATIONS
© RESEARCH DEPARTMENT
3
THE CARGO VOLUME MAINTAINED GWOTH STATUS
© VCBS Research Department
The volume of goods through seaports maintained growth status in 2020 (+ 3,68% yoy) despite
certain impacts from the Covid-19 pandemic thanks to the following factors:
Source: Vinamarine, Finpro, VCBS
‐ The demand to relocate production facilities of multinational corporations to improve profit
margins is increasingly due to: (1) The increase in labor costs in China; (2) The pressure from
trade war and rising tension in US-China relation; (3) The process of shifting to a higher level of
production in the value chain of Chinese manufacturing.
‐ The Covid-19 pandemic and a disruption in the global supply chain in 2020 presented risks
when the production chain is concentrated in a single location.
‐ Vietnam has many advantages in receiving investment capital flows thanks to: (1) Close to
China with a long coast, connecting with major trade routes; (2) Economic and political
environment are stable and have great potential for development; (3) Abundant workforce with
rapidly improving productivity.
Import-export turnover and marine transportation were relatively less disrupted by social
distancing and disease control measures.
The effective trade agreements (CPTPP, EVFTA, RCEP) provided a driving force for import-
export turnover, especially in the second half of the year.
Benefit from the trend of production relocation from China, in particular:
427,8459,8
536,4 530,1
664,6 689,1
0
200
400
600
800
2015 2016 2017 2018 2019 2020
The volume of goods through seaports in Vietnam (unit: million tons)
6,6%
10,5% 10,0%
5,1%5,9%
-8,4%
6,7%
15,8%
-10%
-5%
0%
5%
10%
15%
20%
Q1.2019 Q2.2019 Q3.2019 Q4.2019 Q1.2020 Q2.2020 Q3.2020 Q4.2020
Growth rate of import-export turnover
4
HIGHLIGHTS IN GROWTH OF DEEP WATER SEAPORTS
© VCBS Research Department Source: VPA, Vinamarine, CEIC, VCBS
The cargo volume at the deep-water port seaports recorded outstanding growth coupled
with the increase in the volume of ultra-tonnage container ships (> 100.000 DWT) that was
driven by :
‐ Positive growth in exports and imports to US and EU as: (1) Many free trade agreements came
into effect; (2) Vietnam's increasing role as a new manufacturing hub besides China.
‐ Trend of increasing fleet tonnage of large container shipping lines to save costs.
In the Cai Mep - Thi Vai area, SSIT port leaded the growth trend since the seaports in the
region have basically reached their capacity limit and Gemalink port (of GMD) had not come
into operation in 2020. After 3 years of serving container goods, SSIT port is currently
operating at nearly 70% of designed capacity with container throughput in 2020 estimated at
1.000.000 TEU (+ 236% yoy).
By the end of 2020, the People's Council of Ho Chi Minh City has approved of collecting
infrastructure fees at seaports within the city. Along with that, the process of relocating
seaports in Ho Chi Minh City is strongly promoted to resolve congestion and in accordance
with city planning. This provides a positive motivation for the cargo allocation to deep-water
ports in the South in the coming period.
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
2015 2016 2017 2018 2019 2020
TCIT - TCCT CMIT TCTT SSIT
The container volume through seaports in Cai Mep
(unit: TEU)
Import-Export turnover between Vietnam and US & EU
(unit: million USD)
0
20.000
40.000
60.000
80.000
100.000
2015 2016 2017 2018 2019 2020
US
EU
In Lach Huyen (Hai Phong), HICT port also recorded strong growth in 2020 with an
estimated output of 14 million tons (+ 123% yoy). However, the operating efficiency is
relatively lower than the Cai Mep area due to the low traffic of ultra-tonnage container ships in
the area and the port has to expand to accommodate smaller ships.
5
COMPETITION PRESSURE VARIES IN HAI PHONG AREA
© VCBS Research Department Source: VCBS
The group of seaports located in the midstream of the Cam River such as Dinh Vu, Tan
Vu, VIP Green ports, ... benefited in 2020 as the competitive pressure in the region
decreased, in particular :
Along with the reduction of depreciation and interest cost, the business performance of many
seaport enterprises located in the midstream have been improved positively in 2020.
‐ Since 2018, these seaports group had been under pressure from the trend of cargo allocation to
deep downstream, close to the sea seaports (Nam Dinh Vu, Mipec) and Lach Huyen area.
However, from mid-2020, the transition of shipping lines using large container ships has
basically been completed.
‐ With the feature that most of the import-export goods in the region are located on transport
routes to East Asian countries such as China, Japan, and South Korea (often using medium-
sized container ships), output through midstream ports possesses strong momentum from the
cargo increasing trend in the area.
Meanwhile, the group of ports located deep downstream faces a relatively fierce
competition due to:
‐ Cargo attracting pressure from Lach Huyen port.
‐ Rapid increase in supply in the downstream area and Lach Huyen as many new ports came
into operation in a short time.
0
100
200
300
400
500
2018 2019 2020
PHP DVP VGR
Net profit of some seaport enterprises in midstream Cam River
(unit: billion VND)
SeaportYear come into
operationCapacity
Nam Đinh Vu 2018 500.000 TEU/ year
HICT (Lach Huyen) 2018 1.100.000 TEU/ year
Vinalines Đinh Vu 2019 520.000 TEU/ year
Mipec 2019 600.000 TEU/ year
Construction progress of downstream Cam River and Lach Huyen ports
6
THE LACK OF CONTAINERS INHIBITS GROWTH TREND
© VCBS Research Department Source: Bloomberg, SFI, HAH, VCBS
From the end of 2020, import and export activities in Vietnam have faced a severe
shortage of containers due to the impact of many factors:
‐ The disparity in disease control and production recovery between the two Pacific sides leads to
a trade balance gap (China and Vietnam both recorded a large trade surplus) and affected the
two-way container rotation.
‐ Complicated pandemic situation in the US, EU and social distancing measures reduced the
speed of inland handling and rotating containers of these countries.
‐ Shipping lines prioritize container for China market to benefit from higher scale and freight
rates.
Sudden increase in container rental, marine freight and great pressure on import and
export activities as well as cargo throughput seaports in the last months of the year.
‐ Group of enterprises that own containers and domestic / regional container fleet (eg: HAH).
‐ Group of shipping agency businesses, since their revenue are adjusted to increase according to
the freight rates of international container carriers (eg: SFI).
However, some businesses in the maritime logistics service chain in Vietnam benefit from
the increase in freight rates and the rental of empty containers, typically :
200,2%
57,0%
-100%
0%
100%
200%
300%
Q1.2019 Q2.2019 Q3.2019 Q4.2019 Q1.2020 Q2.2020 Q3.2020 Q4.2020
SFI HAH
Growth in net profit of HAH and SFI
6.579
2.000
3.000
4.000
5.000
6.000
7.000
Transportation freight of container 40ft from Shanghai to New York
(unit: USD)
7
SEAPORT – LOGISTICS INDUSTRY UPDATES
INDUSTRY OUTLOOK 2021
RECOMMENDATIONS
© RESEARCH DEPARTMENT
8
OUTPUT IS FORECASTED TO RECORD A TWO-NUMBER GROWTH
© VCBS Research Department Source: Vinamarine, VCBS
Total volume of goods through seaports in Vietnam in 2021 is forecast to reach
771 million tons (+ 11,9% yoy) with motivation from:
‐ Demand recovery in major export markets as economic activity is restored and
disease control measures are loosened.
‐ Motivation from EVFTA and RCEP agreements reflects from the beginning of the
year.
‐ FDI inflows maintains a positive state, especially when the exchange rate
environment is relatively favorable and the investment projects of important
transport infrastructure are being promoted.
Container scarcity and high container freight rates are forecast to continue to put pressure on import-export volume growth in the first half of 2021. In the long term, we do
not believe this phenomenon will persist, considering the factors:
‐ The Covid-19 pandemic is under control and economic activities are recovering rapidly in the US, EU, which is expected to help decrease the trade imbalance state.
‐ Regulations on declaration, transparency of freight rates and container rotation for shipping lines have been strongly enforced by the government.
‐ Container supply has improved positively thanks to: (1) Increasing new container capacity in China; (2) Domestic steel company (HPG) begins to participate in the market for
supplying containers.
Cargo output through seaports in Vietnam (unit: million tons)
771,24
-5%
0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1.000
2016 2017 2018 2019 2020 2021F
Output Growth
9
COMPETITION PRESSURE IN CAI MEP AREA REMAINS LOW
© VCBS Research Department
In 2021, Cai Mep - Thi Vai area will receive new supply when Gemalink port phase 1 (capacity
1,5 million TEU/ year) comes into operation. However, the competition level in the region is
expected to remain low:
‐ There has been a major change in the planning orientation for a deep-water port system in Cai
Mep. Instead of rampant licensing as in the 2010-2014 period, ports are developed in
succession and growth in demand is concentrated in the nearest 1-2 ports.
‐ Up to now, most of the Cai Mep downstream ports are at their maximum designed capacity.
Given the growth of the region, we believe that SSIT port will basically operate at capacity in
2021.
‐ The EVFTA Agreement provides a particularly important driving force for the Southern seaport
system in 2021 because agricultural products, aquatic products, wood products, ... (mainly in
the South) are the firsts that benefit from tariffs from the agreement.
‐ The trend of restricting imports from border trades in China promotes the export of agricultural
products and raw materials directly from the Southern seaports.
‐ Benefit from the relocation of seaports in Ho Chi Minh City.
The promotion of many transport infrastructure projects connected to Cai Mep is
expected to improve FDI flows in the region and increase the attraction of this seaport group
for import and export activities in the coming period.
Seaport InvestorYear into
operation
Capacity
(TEU/ year)
Output 2020
(TEU)
TCCT - TCIT Tan Cang 2011 1.700.000 2.100.000
CMIT Vinalines 2011 1.100.000 970.890
TCTT Tan Cang 2014 1.100.000 1.047.000
SSIT Vinalines 2014 1.500.000 1.000.000
Gemalink Gemadept 2021 1.500.000
Cai Mep Ha N/A N/A N/A
Deep-water seaports in downstream Cai Mep
Project Commencement Finish
Road 991B 2018 2021
Road Phuoc Hoa – Cai Mep 2018 2021
Bien Hoa – Vung Tau highway 2021 2025
Phuoc An bridge 2021 2025
Bien Hoa – Vung Tau railway 2023 2025
Important infrastructures connecting Cai Mep
Sorce: SNP, Vinalines, VCBS
10
HAI PHONG AREA: MIDSTREAM PORTS CONTINUE TO BE BRIGHT SPOT
© VCBS Research Department
Competitive pressure in the downstream of Cam River and Lach Huyen seaports is
forecast to remain high in 2021 :
‐ Large investment and low demand of the super-tonnage vessels in Hai Phong area put pressure
on HICT port to promote the attraction of smaller vessel sizes (about over 40,000 DWT).
‐ The deployment of container terminals 3&4 Lach Huyen (by PHP) increases the motivation for
HICT to quickly attract customers and reach break-even output before welcoming competitors.
‐ Sedimentation in the downstream and Lach Huyen areas reduces the advantage of the channel
depths compared to the ports at a higher position in Cam River.
The bright spot for growth is forecasted to remain in the group of container ports in the
midstream of Cam River :
‐ The overall growth of regional cargo service demand is strongly reflected in the output at ports
as the allocation of goods has basically ended.
‐ The trend of shifting to serving bulk cargoes of upstream ports (located in front of Bach Dang
bridge) brings the driving force for container cargo growth in the region.
Volume of goods through seaports in Hai Phong
(unit: million tons)
163,76
0
40
80
120
160
200
2016 2017 2018 2019 2020 2021F
64.912
0
38.355
65.992
38.237 45.470
103.235
0
20.000
40.000
60.000
80.000
100.000
120.000
Average container vessel size at HICT seaport (unit: DWT)
Source: Hai Phong Marintime Administration , GSO Hai Phong, VCBS
11
RESHAPE THE MARINE LOGISTICS CHAIN
© VCBS Research Department
Despite the scarcity of containers, increase in freight rates and congestion of the logistics chain are not expected to persist in the long term, these phenomenon have
shown the realities :
‐ The power of foreign container shipping lines is too large since: (1) These firms have formed large alliances that possess concentrated market share and ability to control the
market; (2) Almost all container shipping activities in Vietnam are held by foreign shipping lines; (3) The fact that many shipping lines are strategic shareholders in large-scale
seaports increase their ability to regulate service prices level.
‐ The activities of Vietnamese enterprises in the maritime logistics chain are fragmented and lack of linkage, most of them focus on developing a number of links in the chain, so
they lack the ability to negotiate with foreign partners.
‐ Logistics infrastructure, especially cargo and container consolidation and distribution hubs, is currently underdeveloped in line with the growth of export-oriented
manufacturing.
We believe that a number of trends of operation and development of the maritime logistics industry will be accelerated in the coming period :
Limit the loss of economic benefits to foreign shipping lines
‐ The draft amendments and supplements to Circular 54/2018, accordingly, the container
handling services fees at seaport will be adjusted to increase by 10% in 2021 and continue
to increase according to the roadmap in the coming years. This is based on the fact that: (1)
Port service charges in Vietnam are still low compared to the region; (2) International shipping
lines are paying the ports only 30-40% of the port handling surcharge from customers.
‐ Strict regulations on transparent listing and regulating freight rates for shipping lines.
‐ Policies to support the development of Vietnamese shipping lines, especially container ships,
through preferential credit for investment in ships, income tax reduction, tax exemption, and
fee reduction when building new ships,…
➢ The Southern and midstream Cam River (Hai Phong) ports
can make good use of the roadmap to increase the price bracket
thanks to low competitive pressure.
➢ A favorable environment for businesses that operate
container fleets with: (1) Healthy financial status; (2) Owning
market share and proven capabilities in Southeast and East Asia
markets.
12
RESHAPE THE MARINE LOGISTICS CHAIN
© VCBS Research Department
‐ Firms with large scale, strong financial capacity and full logistics service chain are forecasted to be major beneficiaries in the next growth period and act as counterweights to
large foreign shipping lines.
‐ Large state-owned corporations (Saigon New Port and Vinalines) own outstanding advantages thanks to holding the majority of the market share of seaports, stretching
logistics infrastructure with full services (transportation, ICD, cargo, port services and marine shipping), advantages in land resources and project development ability.
‐ In the private sector, we appreciate GMD with extensive seaport system, logistics infrastructure and a diversified service portfolio. Meanwhile, Viconship (VSC) is also
increasing its position rapidly in operating a full logistics chain thanks to high efficiency container yard - transport – seaport infrastructures, orientation to focus on developing
logistics service and increasing cooperation with strategic partners such as SAFI (transport agency) and Sao A (depot operation).
Develop large-scale logistics chains
Promote investment in logistics centers
‐ The development of the logistics centers is being strongly promoted by the Government to meet the demand from export-orientated production, increase the efficiency of goods
and container rotation and the orientation to minimize the proportion of logistics costs (currently is at a high level compared to the world).
‐ National and economic regional logistics centers are especially interested in with many economic benefits: (1) Integration of many services (warehouse services, gathering,
serving and clearance of goods, container distribution,...) to bring efficient logistics chain; (2) Become hubs for transshipment, distribution of goods and connecting transportation
routes, minimizing the situation of empty vehicles in the return journey. In the listed companies, we appreciate ICD Tan Cang Long Binh (ILB) with many advantages to
develop into a economic regional logistics center.
‐ Smaller logistics center systems are developed in the fan shape from the original centers, in charge of goods circulation in regions and economic corridors. These logistics
centers will also aim to integrate many logistics services, become transit centers and can specialize in a flow of import and export goods or certain consumer or E-commerce
goods.
13
SEAPORT – LOGISTICS INDUSTRY UPDATES
INDUSTRY OUTLOOK 2021
RECOMMENDATIONS
© RESEARCH DEPARTMENT
14
GEMADEPT CORPORATION (HOSE: GMD)
© VCBS Research Department
OVERVIEW
Business activities
GMD is a leading company in seaport and logistics operations sector with a system of 6 seaports
across the country, including: Nam Hai port, Nam Hai Dinh Vu port, Nam Dinh Vu port, Dung Quat
port, Binh Duong port and Gemalink port.
Business results 2020
GMD recorded a slight decline in revenue (-1,5% yoy) due to competitive pressure at Nam Dinh Vu
port. NPAT decreased by 28,7% yoy due to increasing administration costs and in 2020 GMD no
longer recognized financial income from investment transfer.
Business results of GMD (unit: VND billion)
11,9%14,6%
70,2%
23,2%
16,8%
0%
20%
40%
60%
80%
2016 2017 2018 2019 2020
NPAT margin of GMDShareholder structure of GMD
Source: GMD, VCBS
6,18%4,59%
4,77%
2,00%
1,96%
80,49%
KIM Vietnam Growth Equity Fund
ReCollection Private Limited
PYN Elite Fund (Non-UCITS)
Wareham Group Limited
Deutsche Bank Aktiengesellchaft
Other
2.643 2.604
1.013 950
614 438
0
500
1.000
1.500
2.000
2.500
3.000
2019 2020
Revenue Gross profit NPAT
15
GEMADEPT CORPORATION (HOSE: GMD)
© VCBS Research Department
INVESTMENT THESIS
Benefit from industry growth
‐ As one of the leading companies in the industry with a nationwide seaport system, GMD is in
a great position to benefit from the boom in cargo volume through seaports in 2021.
‐ Nam Hai and Nam Hai Dinh Vu ports are forecast to increase operational efficiency thanks to
the trend of cargo movement to downstream ports has basically finished.
‐ Binh Duong port benefits strongly in 2021 thanks to the relocation of Truong Tho ICD cluster
and the development orientation to the east of Ho Chi Minh City.
Advantage from the logistics service chain
‐ With the advantage of owning a relatively complete logistics service chain with seaport
infrastructure, ICD and control of fleet and container through associate company, GMD
limits the impact of market shocks such as the scarcity of containers and hold a good position
in negotiation with shipping lines.
‐ In the future, GMD will increase investment in the ICD system in the South, which is
expected to improve the efficiency of the logistics chain.
Source: GSO Hai Phong, Vinamarine, VCBS
Cargo output through seaports in Vietnam (unit: million tons)
771,24
-5%
0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1.000
2016 2017 2018 2019 2020 2021F
Output Growth
Volume of goods through seaports in Hai Phong
(unit: million tons)
163,76
0
40
80
120
160
200
2016 2017 2018 2019 2020 2021F
16
GEMADEPT CORPORATION (HOSE: GMD)
© VCBS Research Department
Gemalink is expected to basically reach break-even output in 2021
‐ Cargo service demand in the Cai Mep area is forecast to maintain a high growth rate in 2021
along with growth in import-export volume, motivation from EVFTA and the process of
relocating ports in Ho Chi Minh City.
‐ Most downstream Cai Mep ports are already at their design capacity limits.
‐ Cargo source from CMA-CGM shipping line (joint venture partner at Gemalink), which
currently using services of other ports in Cai Mep area.
Cargo volume through downstream Cai Mep seaports (unit: TEU)
Capacity utilization rate of downstream Cai Mep seaports
Source: VPA, SNP, Vinalines, VCBS
We forecast Gemalink's output in to be 736.247 TEU, basically help the port reach
breakeven point.
Growth momentum from Gemalink will be strongly reflected from 2022, when:
‐ SSIT port is forecasted to operate at full designed capacity, while Cai Mep Ha port will take a
few more years to complete.
‐ With Cai Mep's growing position as a regional transshipment hub, Gemalink has many
advantages to attract cargo sources of Ocean Alliance shipping lines from Singapore.
123,5%
88,3%
95,2%
66,7%
0%
20%
40%
60%
80%
100%
120%
140%
2016 2017 2018 2019 2020
TCCT - TCIT CMIT TCTT SSIT
0
2.000.000
4.000.000
6.000.000
8.000.000
2016 2017 2018 2019 2020 2021F
Cargo volume Total capacity
17
GEMADEPT CORPORATION (HOSE: GMD)
© VCBS Research Department
P/B Method 30.025
FCFF Method 43.708
FORECAST
40.972 VND
TARGET PRICE
+27,2%UPSIDE
VALUATION
Unit: VND billion 2020 2021F 2022F
Revenue 2.604 2.871 6.107
+/- yoy (%) -1,48% 10,25% 112,76%
Profit for common shareholders 366 408 509
+/- % -29,28% 11,59% 24,82%
EPS (VND) 1.133 1.219 1.521
STOCK PRICE FLUCTUATION
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
GMD Relative VN Index
18
DINH VU PORT INVESTMENT & DEVELOPMENT JSC (HOSE: DVP)
© VCBS Research Department
Business activities
DVP is a subsidiary of Hai Phong Port (PHP) - a member of Vinalines. Currently, the company is
operating Dinh Vu port in the midstream of Cam River (Hai Phong) with the ability to
accommodate ships of up to 40.000 DWT and capacity of 500.000 TEU / year.
Business results 2020
DVP recorded a slight decrease in revenue and profit due to still being affected by the movement of
major customers in the first half of the year. Specifically, in 2020, DVP's revenue was VND 518
billion (-7,5% yoy), NPAT was VND 238 billion (-4,0% yoy).
OVERVIEW Business results of DVP (unit: VND billion)
45,87%
45,05%
44,23%
45,87%
43%
44%
45%
46%
47%
2017 2018 2019 2020
NPAT margin of DVPShareholder structure of DVP
Source: DVP, VCBS
51,00%
18,70%
5,15%
5,16%
4,52%
4,90%
10,57%
PHP
Apromaco
Halley Asian Prosperity
Samarang UCITS
Erikoissijoitusrahasto Elite
PYN Elite Fund (Non-UCITS)
Other
560 518
285 249 248 238
0
100
200
300
400
500
600
2019 2020
Revenue Gross profit NPAT
19
DINH VU PORT INVESTMENT & DEVELOPMENT JSC (HOSE: DVP)
© VCBS Research Department
The trend of cargo allocation has basically ended
INVESTMENT THESIS
‐ After shipping line O.N.E (a major customer of DVP) completed the movement to Lach
Huyen, DVP began to witness a rebound in cargo volume since Q3.2020.
‐ With the cargo movement trend basically completed, the positive growth trend of output in
the region is forecasted to be reflected in DVP's business results from 2021.
Expectation for price adjustment of container handling service in 2021
DVP holds a good position in the adjustment of service prices when the new circular
adjusting the price bracket for container handling services at seaports is implemented thanks
to factors:
‐ Competitive pressure in the area around Dinh Vu port (midstream of Cam river) has decrease
dramatically.
‐ High container freight rates are a positive basis for DVP to increase prices for handling
services at ports.
Volume of goods through seaports in Hai Phong
(unit: million tons)
163,76
0
40
80
120
160
200
2016 2017 2018 2019 2020 2021F
-6,0%
-18,5%-17,8%
-17,6%-13,2%
-8,0%
16,7%
7,3%
-30%
-20%
-10%
0%
10%
20%
Q1.2019 Q2.2019 Q3.2019 Q4.2019 Q1.2020 Q2.2020 Q3.2020 Q4.2020
Growth of cargo volume through Dinh Vu port
Source: GSO Hai Phong, DVP, VCBS
20
DINH VU PORT INVESTMENT & DEVELOPMENT JSC (HOSE: DVP)
© VCBS Research Department
Benefiting from the relocation of Hoang Dieu port
‐ According to the restructuring orientation of the parent company - PHP, Hoang Dieu port is
gradually being relocated and shifting bulk cargo operations to Chua Ve port.
‐ Dinh Vu and Tan Vu ports will then receive container cargo from Chua Ve port and position to
be the main members in charge of the group's container handling operations in the next few
years.
‐ People's Committee of Hai Phong city has decided to push up the construction progress of
Nguyen Trai bridge. Accordingly, PHP will start relocating Hoang Dieu to hand over the site to
the project right in Q1.2021 and accelerate the cargo movement between member ports.
Seaports in PHP’s system
Source: PHP, DVP, Hai Phong Maritime Administration, VCBS
SeaportBerth leng
(m)Depth (m)
Number of
berth
Cargo
categoriesCapacity
Hoang Dieu 1.717 -8,4 11 Bulk 10 million tons/ year
Chua Ve 848 -8,5 5 Bulk, container 550.000 TEU/ year
Tan Vu 1.002 -8,7 5 Bulk, container 1.000.000 TEU/ year
Dinh Vu
(DVP)425 -8,7 2 Container 500.000 TEU/ year
Bulk cargo
Container cargo
Cargo allocation between member ports of PHP
Hoang Dieu Port
Chua Ve Port
Tan Vu Port Dinh Vu Port
21
DINH VU PORT INVESTMENT & DEVELOPMENT JSC (HOSE: DVP)
© VCBS Research Department
P/B Method 53.014
FCFF Method 63.474
FORECAST
55.106 VND
TARGET PRICE
+17,2%UPSIDE
VALUATION
Unit: VND billion 2020 2021F 2022F
Revenue 518 604 650
+/- yoy (%) -7,5% 16,5% 7,74%
Profit for common shareholders 238 278 303
+/- % -4,0% 17,0% 9,1%
EPS (VND) 5.942 6.238 6.800
STOCK PRICE FLUCTUATION
0
10.000
20.000
30.000
40.000
50.000
60.000
DVP Relative VN Index
22
ICD TAN CANG – LONG BINH JSC (HOSE: ILB)
© VCBS Research Department
Business results 2020
OVERVIEW Compare a number of ICDs in Dong Nai, Binh Duong and HCMC
Business result of ILB (unit: VND billion)
Nguồn: ILB, VCBS tổng hợp
Business activities
‐ ILB is a member unit of Saigon Newport Corporation (SNP), responsible for providing
logistics services and inland clearance points (ICD) within the logistics service chain of Tan
Cang in the Southeast Vietnam.
‐ With a land reserve of 230 ha for logistics infrastructure development in Bien Hoa city, Dong
Nai, ILB is the logistics enterprise and ICD that has the largest land area in the country.
‐ ILB witnessed a net revenue of VND 456 billion (+8,9% yoy), mainly coming from the
growth of warehouse rental segment thanks to the following factors: (1) Some new
warehouse clusters went into operation, (2) Import and export activities in the region
maintained growth despite the influence of Covid-19.
‐ NPAT in 2020 was VND 69.3 billion (+6,0% yoy). Profit margin decreased slightly due to:
(1) The depreciation expense recorded from the new warehouse cluster that came into
operation in Q4.2020; (2) Financial expenses increased sharply over the same period.
ICDLand area
(ha)
Warehouse
(m2)Position
ICD Phuoc Long 15 1.200 D.9 & D.Thu Đuc, HCMC
ICD Transimex 10 27.000 D.Thu Đuc, HCMC
ICD Sotrans 10 N/A D.Thu Đuc, HCMC
ICD TBS – Tan Vạn 23 86.000 Di An, Binh Duong
ICD Tanamexco 18 8.000 Di An, Binh Duong
ICD Tan Cang
Long Binh230 436.175 Bien Hoa, Đong Nai
418 456
152 158
65 69
0
100
200
300
400
500
2019 2020
Revenue Gross profit NPAT
23
ICD TAN CANG – LONG BINH JSC (HOSE: ILB)
© VCBS Research Department
Growth motivation from new warehouse system
INVESTMENT THESIS
‐ Some warehouse clusters in Long Binh Service Area 2 (130 ha) have gradually come into
operation. The company plans to complete an additional 100.000 m2 of warehouse in 2021.
‐ Warehouse rents in the region have increased positively and are forecast to remain high in the
coming period due to limited supply.
‐ With the abundant land reserve, ILB has plenty of room to continue building warehouse
systems in the coming years. In the long term, the demand for warehouse space in the region
will continue to expand thanks to:
FDI inflow into Dong Nai (unit: USD million)
E-Commerce B2B market value of Vietnam (unit: USD billion)
Source: DPI Dong Nai, IDEA, ECOM, VCBS
1) FDI inflows into Dong Nai maintain positive outlook.
2) The trend of using outsourced warehouses of companies in the region due to scarcity of
industrial land and taking advantage of warehouse service businesses.
3) The strong growth of the e-commerce market poses a great demand for warehouse
infrastructure due to the fact that the use of warehouse and logistics space is much
greater than the traditional trade channel.
1.9181.839 1.916
2.302
919
0
500
1.000
1.500
2.000
2.500
2016 2017 2018 2019 9M.2020
5,0
6,2
8,1
10,1
12,0
0
2
4
6
8
10
12
14
2016 2017 2018 2019 2020
(estimated)
24
ICD TAN CANG – LONG BINH JSC (HOSE: ILB)
© VCBS Research Department
The ICD segment is expected to make a positive contribution to revenue in the event
that ILB is included in the ICD category in 2021:
‐ Benefit from FDI inflows and growth in import - export volume in the region.
‐ The trend of returning to using ICD services in Dong Nai of enterprises in the province
as Truong Tho port cluster is being relocated.
‐ The over-capacity state of SNP's deep-water ports in Cai Mep boosts demand for
services at ICD Tan Cang Long Binh to save time for cargo handling.
Source: VPA, SNP, MOIT, VCBS
Cargo volume through SNP’s seaports in Cai Mep (unit: TEU)
The potential for development into an important logistics center in the region thanks to
advantages :
‐ Outstanding land reserve with full infrastructure for logistics service chain.
‐ Favorable geographical location to become a hub for import-export goods in the
Southeast region with infrastructure connecting industrial parks, Cai Mep port cluster
and Long Thanh airport.
‐ Owning a convenient location to integrate logistics service provision for e-commerce
and consumer goods.
‐ As an important link in the logistics chain of SNP- the unit holding the majority of
market share in seaports and logistics market in the South.
1.112.2791.324.348
1.632.290
1.957.0832.100.000
224.609 389.419 470.704648.835
1.047.000
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
2016 2017 2018 2019 2020
TCCT - TCIT TCTT
Project Size (ha)Invested capital
(VND billion)Position
ICD Vinh Phuc 83 3.800 Binh Xuyen, Vinh Phuc
Hateco Logistcs
center12 N/A Long Bien, Ha Noi
Logistics center for
Dong Nam
Economic Zone
72 2.000 Hai Lang, Quang Tri
ICD Tan Cang
Long Binh230 N/A Bien Hoa, Đong Nai
Compare a number of infrastructure project that orientated to be
logistics center
25
ICD TAN CANG – LONG BINH JSC (HOSE: ILB)
© VCBS Research Department
P/E Method 29.880
FCFF Method 33.437
FORECAST
31.658 VND
TARGET PRICE
+17,3%UPSIDE
VALUATION
Unit: VND billion 2020 2021F 2022F
Revenue 456 560 628
+/- yoy (%) 8,95% 22,90% 12,17%
Profit for common shareholders 64 92 111
+/- % 5,91% 44,34% 20,26%
EPS (VND) 2.600 3.258 3.918
STOCK PRICE FLUCTUATION
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
ILB Relative VN Index
26
DISCLAMER
© VCBS Research Department
This report is designed to provide updated information on the fixed-income, including bonds, interest rates, some other related. The VCBS analysts exert their best efforts to obtain
the most accurate and timely information available from various sources, including information pertaining to market prices, yields and rates. All information stated in the report has
been collected and assessed as carefully as possible.
It must be stressed that all opinions, judgments, estimations and projections in this report represent independent views of the analyst at the date of publication. Therefore, this report
should be best considered a reference and indicative only. It is not an offer or advice to buy or sell or any actions related to any assets. VCBS and/or Departments of VCBS as well as
any affiliate of VCBS or affiliate that VCBS belongs to or is related to (thereafter, VCBS), provide no warranty or undertaking of any kind in respect to the information and materials
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when quoting. Copyright 2012 Vietcombank Securities Company. All rights reserved
CONTACT INFORMATION:
Tran Minh Hoang Mac Dinh Tuan Pham Hong Quan
Head of Research
Head of Equity team
Equity Analyst