For the whole year 2024, the growth rate compared to the same period of the portfolio of stocks analyzed by VDSC is estimated to reach 19% compared to the same period. Accordingly, the after-tax profit of VN-Index is estimated to increase by 18% compared to the same period.
The market will balance soon
In a recent report, Dragon Capital Securities (VDSC) assessed that in the first sessions of August, the market reacted negatively following the adjustment trend of global stock markets. The index's adjustment speed was stronger than the macroeconomic picture in the first half of 2024.
Therefore, VDSC expects that with quick and strong adjustments, mainly following the trend of global stocks instead of reflecting a less optimistic picture of corporate business operations, the market will soon regain balance.
Looking at the business results outlook for the rest of 2024, VDSC estimates that profit growth will accelerate sharply with an increase of ~25% over the same period. Similarly, the stock portfolio analyzed by Rong Viet, representing ~60% in capitalization on the HSX floor, has a growth rate of 25% over the same period.
The main growth driver is said to come from the banking group thanks to:
(1) The economy's expansion needs help credit growth in 2024 reach the target of 14%-15% over the same period.
(2) The scale of bad debt will decrease slightly by the end of the year when banks have a better position in terms of pre-provision profits than in 2023 to continue absorbing and cleaning up the balance sheet, the recovery of economic activities helps reduce the pressure on bad debt formation and helps speed up the progress of handling collateral of bad debts.
VDSC forecasts that the real estate group will contribute greatly to profit growth in the second half of the year based on the low base of the same period, when major investors such as VHM, KDH or NLG focus on handing over products that have been opened for sale before.
For other industry groups with large contributions to profit growth, industrial goods and services, retail, and aviation stocks will be the main highlights contributing to the overall growth picture when industrial production prospects are positive, profit margins improve as the price war comes to an end in the retail sector and raw material costs cool down in the consumer goods sector, and aviation businesses record the second consecutive quarter of positive profits thanks to increased selling prices and output.
For the whole year 2024, the growth rate compared to the same period of the portfolio of stocks analyzed by VDSC is estimated to reach 19% compared to the same period. Accordingly, the after-tax profit of VN-Index is estimated to increase by 18% compared to the same period.
Which stock group leads the second half of the year?
With the above profit growth prospects, the analysis team believes that the stock market's yield will continue to improve at the current capitalization level. In addition, the current yield gap (E/P of the stock market compared to the yield of government bonds) (4.53%) is far above the average of the past 5 years and is in the low probability range.
The yield spread above 4.0% usually only occurs when there is an unexpected headwind and usually passes quickly, helping the market to rebalance and recover quickly. Therefore, with the most recent 4Q EPS growth (as of Q2/2024) of ~10% compared to the cumulative 4Q EPS (as of Q4/2023), the reasonable P/E range in Q3/2024 of the index can be expected to be 14x - 15x (corresponding to the yield spread of 3.5% - 4.0%), corresponding to the VN-Index's equilibrium trading point of 1,237 - 1,325.
For the long term, based on the profit growth prospect (14%-18% svxk) and the trading P/E scenario in the range of 13.5 - 15 times, the reasonable point range of VN-Index is 1,236-1,420, after reflecting the growth in business results for the whole year of 2024 compared to 2023.
Source: CafeF
