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Gemalink deep seaport (Cai Mep-Thi Vai, Ba Ria-Vung Tau) will be a new growth engine for Gemadept Corporation

The shipping service has become the main growth engine for HAH stock in recent years. The company owns the largest container vessels in Vietnam.According to a report by SSI Securities Corporation, HAH stock of Hai An Transport and Stevedoring JSC is a good investment channel in the logistics industry in Vietnam for its integrated business model (seaport, port operation, shipping and logistics) and good management capacity.

Currently, HAH stock is traded at around VND37,000 per share, doubling from the early this year. According to SSI Research, HAH stock is traded at the price to earnings (P/E) ratio of 8x and 5.3x in 2021 and 2022, respectively, which is an attractive ratio for a fast-developing company. Thus, SSI Research aims to apply P/E ratio of 9x for HAH with a 1-year target price of VND43,800 per share.

Mirae Asset says that the container shortage in Asia has given a great advantage to shipping companies such as HAH in case aviation is facing difficulties in transport due to declining flights. This is a factor raising freight charges and container shipments of the company.

Mirae Asset forecasts that the parent company’s shareholder’s sales and net profit of HAH will reach VND1,686 billion and VND240 billion, up by 41.5% and 73.9% respectively thanks to the increase in gross profit margin due to growth in freight charges and port operation.

GMD stock of Gemadept Corporation is also a bright spot with the prospect of benefiting from the global economic recovery, helping increase shipments through Vietnam's ports by 20% in 2021.

Possessing a nationwide logistics network, GMD's ports are one of the main beneficiaries of this trend. Among seaport areas in Vietnam, Cai Mep will continue to be the focus as demand is expected to be higher than supply in the future, that allows other ports to raise their service prices when Cai Mep works at full capacity. Gemalink port has proven to be a strong port in the region.

SSI Securities Company forecasts that Gemalink Port will immediately bring profit to GMD in the first year of operation, and GMD's ports in Hai Phong are also performing well. In particular, Gemalink and Nam Dinh Vu ports are expected to operate at full capacity from the second half of 2021, which will boost growth for GMD.

Accordingly, SSI Research estimates GMD's pre-tax profit will rise 49% to VND762 billion in 2021 and 39% to VND1,063 billion in 2022.

In the future, GMD sets a plan that pre-tax profit in 2025 will increase three times compared to 2020 to VND1,500 billion, equal to an average growth of 25% per year, much higher than the average growth rate of port companies. This positive result is mainly supported by Gemalink port and three key projects including Nam Dinh Vu Port phase II, Gemalink Port phase II and a new logistics and ICD center in the South.

Solve shortcomings and cut transportation costs to reduce logistics costs

The GMD’s current price has grown by 23% compared to the beginning of the year, to approximately VND41,000 per share. Securities companies forecast a 1-year target price of VND50,000 - 53,000 per share.