Pegatron, Amazon … are looking for new supply chains after the epidemic, Vietnam is a “bright spot” with low costs, the Government increased public investment with a total plan of nearly 30 billion USD.


Noted in the analysis of a new industrial real estate group published by SSI Research, related to the FDI group – the main investor in the industrial park has had positive signs, the total newly registered capital and capital increased by 4 months, reaching US $ 9.8 billion, up 32%.

Vietnam has the advantage of hiring and labor costs compared to Indonesia, Thailand or Malaysia

The Covid-19 epidemic opened a new turning point, with the aim of minimizing supply chain disruptions, urgently increasing the need to diversify the production portfolio, and avoid over-reliance on one country. Shifting production from China to other countries will take place more quickly.

In addition, big businesses like Pegatron, Amazon and Home Depot have started to recruit and search supply chains, showing that Vietnam is one of the destinations in the transition process, besides potential countries. Another possibility is regional, Indonesia, Thailand or Malaysia.

Compared with Indonesia, which directly competes with Vietnam in attracting FDI, Vietnam has the advantage of being close to China so the transportation distance is more favorable. Vietnam’s political institutions are very supportive of businesses, with many incentives for large FDI projects (preferential policies vary by case).

At the same time, Vietnam also participates in many FTAs ​​such as EVFTA or CPTPP that Indonesia does not participate in. In terms of macro, recently VND has been very stable compared to IDR fluctuations.

In the first quarter of 2020, according to Collier International, comparing occupancy rates and rents of industrial parks in Southeast Asian countries, Vietnam is quite attractive with the average rent being 45 – 50% lower. with Thailand, Malaysia and Indonesia.

According to a Jetro report in 2019, Vietnam’s labor costs are also lower than Thailand, Malaysia and Indonesia.

The Government has stepped up public investment with a total capital of nearly VND 30 billion

Not to mention, promoting public investment is expected to increase sharply in 2020 with a plan of 20 billion USD in addition to the remaining undisbursed value of 2010 of 9.5 billion USD. Total estimated disbursement scale in 2020 is very large of 30 billion USD (+ 2.2x compared to the actual disbursement amount in 2019).

Especially, the North-South Expressway, Bien Hoa-Vung Tau Expressway, Dau Giay-Phan Thiet Expressway, helping to connect infrastructure and logistics of industrial parks in satellite provinces of Ba Ria Vung Tau and Phan Thiet to centers of Ho Chi Minh City, Dong Nai and Binh Duong. From there, improve the competitive advantage to attract FDI compared to other countries in the region.

According to Department of Economic Zone Management, Ministry of Planning and Investment, by Quarter 1/2020 Vietnam, there were 335 industrial zones established (an increase of 5 industrial zones compared to the end of 2019), including 260 industrial zones with a total land area of ​​68,700 ha has been put into operation and 75 industrial parks are under construction with a total area of ​​29,200 ha. The occupancy rate is 75% – an increase of 0.7% compared to the end of 2019.

According to the JLL report, from February 2020 when the Covid-19 outbreak began, the restriction of movement between regions caused transactions to be delayed because investors were unable to directly conduct field work and work. dealing with industrial zone investors.

However, successful transactions were made before the translation, which helped to increase the occupancy rate in the North region by 200 bps to 75%. The rent of industrial zones in the North also increased by 6.5% YoY to reach 99 USD / m2 / rental cycle. Southern Industrial Zones have the occupancy rate of 82% and the rental price is 101 USD / m2 / rental cycle.

PHR and SZC are concerned, stocks are on the rise

Some businesses in the industry are interested, according to SSI Research, there is Sonadezi Chau Duc (SZC) with Q1 / 202020 revenue of 120 billion dong (+ 2.5x), in which revenue from land lease in Chau Duc Industrial Park reaches VND 103 billion (+ 2.4x), road toll revenue at BOT 768 was VND 15.4 billion (+ 0.1%). Gross profit margin continued to be recorded at a high level of 53.3%.

At the same time, SZC recorded dividends from Sonadezi Long Binh JSC of 1.6 billion dong, helping financial revenue increased by 61.9%. In 2020, the revenue is expected to reach 365 billion VND (+ 11%), in which the revenue from industrial zone leasing is 284 billion VND with the leased area of ​​50 hectares and the rental price is 50 USD / m2 / lease cycle, fee revenue BOT reached VND 68 billion (+ 3%).

EAT is expected to be 137 billion dong (+ 2.5%). Estimated EPS in 2020 is VND 1,374 / share, equivalent to P / E of 13.61x.

Big companies Pegatron, Amazon ... are looking for new supply chains after the epidemic, Vietnam is a bright spot with low costs, the Government increased public investment with a total plan of nearly 30 billion USD - Photo 1.

Or Phuoc Hoa Rubber (PHR): recorded the revenue in the first quarter of 202020 with 221 billion dong (-24%). The company also recorded 156 billion dong from collecting compensation from NTC, helping EAT to reach 211 billion dong (+ 88%). By 2020, the revenue is expected to reach 1,712 billion VND (+ 4%) and EAT is 1,102 billion VND (+ 126%).

In particular, revenue from natural rubber is expected to reach VND 1,277 billion (+ 17%), with rubber production expected to reach 39.5 thousand tons (+ 21%, thanks to higher consumption from Cambodia when PHR signed pre-order agreement with Kumho Tire); The new leased area from Tan Binh Industrial Park reaches 10 hectares with the rent of USD 85 / m2 / rental cycle, estimated revenue of VND 245 billion (-38%); Income from land compensation from NTC is estimated at 863 billion VND (Compensation area of ​​345 ha and price of 2.5 billion / ha).

Big companies Pegatron, Amazon ... are looking for new supply chains after the epidemic, Vietnam is a bright spot with low costs, the Government increased public investment with a total plan of nearly 30 billion USD - Photo 2.

Bao An



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