Mid-cap stocks in these five sectors will attract investment flows in June: VNDIRECT

Inside Century Synthetic Fiber's plant. The company is on the list of recommended stocks of VNDIRECT in June. Photo courtesy of Century Synthetic Fiber

In the recent monthly outlook report for June, VNDIRECT Securities Corporation (VND) said that besides large-cap stocks, some mid-cap stocks from steel, real estate, financial services, textile and seafood industries will attract cash flows this month.

In May, the market benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) continued its rally despite the outbreak of COVID-19 in late April.

On May 31, the index closed at 1,328.05 points, up more than 18.5 per cent compared to the beginning of the year.

However, stocks witnessed strong pisions with 47 per cent of stocks listed in three exchanges falling in May.

The market’s gain was mainly driven by large-cap stocks, especially bank stocks. Of which, Vietinbank (CTG) contributed the most to the market’s gain in May.

In the report, VNDIRECT estimated that profits of listed companies grew up to 89.9 per cent year-on-year in the first quarter of 2021.

The market's net profit during the period jumped 41.6 per cent compared to the pre-pandemic level, or the first quarter of 2019.

With the above positive signals, VNDIRECT raised its forecast of HoSE-listed companies’ earnings per share (EPS) growth to 30 per cent, compared to the previous forecast of 23 per cent.

As of May 25, the P/E ratio of VN-Index reached 17.8 times, lower than the level of 18.4 times at the end of April as the business results of listed companies improved in the first quarter.

“We estimated that 2021’s P/E ratio is at 16.5x, equivalent to its five-year average,” VNDIRECT stated in its outlook.

Analysts from the securities firm cited some factors supporting the market in June, including some countries being ready to fully open, brighter export outlook and expectations that listed companies’ net profits will surge in 2021.

However, some risks remain. They are the negative impact of the new COVID-19 outbreak on Việt Nam's GDP growth outlook in the second quarter, the risk of rising inflation in the second quarter of 2021, and high market margin balance.

"We expect VN-Index will move in the range of 1,280 - 1,380 points in June," VNDIRECT said.

This securities company believes that besides large-cap stocks, some mid-cap stocks in the steel, real estate, financial services, textile and seafood industries will attract capital inflows this month.

In June, VNDirect recommended five stocks including Vinhome JSC (VHM) with the target price at VND134,300 per share, Century Synthetic Fiber Corporation (STK) with the target price at VNĐ41,000 per share, Vĩnh Hoàn Corporation (VHC) (target price at VNĐ50,000 per share), SCSC Cargo Service Corporation (SCS) (target price at VNĐ161,400 share) and Petrovietnam Transportation Corporation (PVT) with the target price at VNĐ19,800 per share.

Of these stocks, VHM was the only one dropping on Friday, down 0.95 per cent, while the rest rose with PVT hitting the maximum daily gain of 7 per cent.

VND shares finished lower on the last trading day of the week, down 0.82 per cent to VNĐ60,400 per share. VNS