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Vietnam Petro Gas Joint Stock Company - Initial Coverage

In:

Submitted By haduongle
Words 8363
Pages 34
Student Research
This report is published for educational purposes only by students competing in the CFA Institute Global Investment Research Challenge.

Oil and Gas industry

PetroVietnam Gas
Recommendation: HOLD Price Target: 79,512 VND
2015F 83,482,699 24,051,366 15,143,449 7,991 30.12% 2016F 97,674,758 28,140,098 17,753,969 9,369 28.48% 2017F 2018F

Date: 22 December, 2014

Ticker: GAS Price (Dec 19, 2014): 68,000 VND

Forecast Summary Net Sales (million VND) EBITDA (million VND) Net Income (million VND) EPS (VND) ROE (%)

2011 64,224,500 11,858,894 64,224,500 2,285 28%

2012 68,301,359 15,940,112 68,301,359 5,167 40%

2013 65,399,686 18,434,982 65,399,686 6,478 42%

2014F 72,593,651 20,914,231 13,140,492 6,934 32.20%

117,209,709 142,995,845 33,768,117 21,347,273 11,265 27.37% 41,197,103 26,090,435 13,768 26.51%

Key Market Data Listed on HOSE Ticker GAS Industry Oil and Gas 52 Week high 122,300 (VND) 52 Week low 61,300 (VND) Previous close 68,000 (VND) Market Cap. 128,860,000 (million VND) Outstanding 1,895,000,000 shares (units) Source: Student estimates

Highlights
We estimate PV Gas (GAS) as “HOLD” with target price of VND 79,512, expected higher than its current price 16.9%, VND 68,000. Three-stage discounted cash flows model is employed and the result is confirmed again with P/E analysis.  Operation under control of government as a monopoly in gas industry: PV Gas is the only trader in dry gas market and accounted for 70% national LPG market.  Restructuring period 2011-2015 strategies: PV Gas has focused more on the core businesses: gathering, importing, transporting, storing, processing, distributing and trading of gas and its products.  The decrease in sales since 2011 due to the decline in demand of monopoly EVN: Sales of dry gas depends on the weather. In the rainy reason, EVN prefers hydroelectric rather than gas.

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