October 8, 2015.
For those investing or looking to invest in the Ho Chi Minh City Stock Exchange, analysts from Barron’s Asia are recommending 2 stocks.
Vingroup JSC (VIC.VN), Vietnam’s largest real estate developer, develops a combination of residential and commercial properties that totals to almost 8,100 hectares. China’s manufacturing boom led to a housing and construction boom in Vietnam, in which property owners benefitted the most. Industrialization often leads to urbanization and Vietnam’s construction and real estate industries are starting to see this as they thrive. Vingroup, which has a focus on high-end properties, will surely take advantage of the growing real estate market. Although Vingroup’s revenues declined 10% and its net profit after taxes dropped 63% in the first half of this year, Viet Securities analyst Phap Dang projects that its earnings growth for 2016 will rebound to 117%, with revenues expected to grow 72%.
In addition to VIC, Vietnam Sun (VNS.VN), a taxi operating company that owns about 6,000 cabs and has 45% of the market share in Ho Chi Minh City, is also expected to grow. The company has been increasing its number of taxis to meet the rising demand, while it climbs over its rival Mai Linh in gaining customers. Although the company’s earnings dropped 10% this year, CIMB analyst Anh Nguyen puts a buy rating on Vietnam Sun. Nguyen expects a 68% upside, as well as a revenue increase of 8% and a 22% rebound in earnings in 2016.
Louie Nguyen, CFA is the Chief Investment Officer of San Diego-based Soledad Investment Management. Soledad invests qualified clients’ assets in markets around the world, including Vietnam.