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PLX target price 141,000 VND per share

Sunday - 03/06/2018 05:56
PLX - Vietnam Petroleum Corporation. Currently, the price of trading on the stock exchange at the end of 6/01/2018 at the price of 60,500 VND per share is not reflecting the core value of PLX. We expect PLX to stand at 141,000 VND per share, equivalent to a nearly increment of 125% from the price set at 6/01/2018,
Year 2017 is the third consecutive year that Petrolimex has completed and exceeded its planned targets with an encouraging growth rate. Petrolimex has been listed on the stock exchange (PLX), the number one in terms of turnover, being recognized as the top 50 best listed companies in Vietnam, the capitalization value reached VND100,000 billion.
 
plx revenue profit capital growth cophieuviet com 2018

In 2017, Petrolimex has made impressive progress in developing distribution network, successfully applying 5-step sales process in the whole system, launching new product DO-V & E5 demonstrates responsible leadership with the state, with consumers and with the environment; Blowing new life into production and business to step into the 2018 days from the beginning of the year.

Implementing the roadmap for replacement of RON 92 petrol with E5 RON 92 biofuel from 1 January 2018, Petrolimex has carried out a conversion of more than one month and ensured coverage in all 63 provinces and cities. Network of about 2,500 affiliated stores. Deputy General Director of Petrolimex Nguyen Quang Dung said that trading the highest quality products is Euro 5 standard diesel is the business strategy of "compete with quality products and professional services."
Petrolimex estimates that gross profit of E5 products will increase by 80-100 VND / liter compared to gasoline A92 because E5 petrol does not have to set aside price stabilization fund and environmental tax for E5 petrol is lower than A92 petrol.

In addition, Petrolimex will also focus on new high-end products to compete with its peers. Petrolimex is currently the only distributor of Euro IV / V in Vietnam, which has higher profit margins than other products. Petrolimex's A95 gasoline line always grows steadily every year and accounts for 28% of petrolimex's petrol output.

The retail segment is also one of the drivers of growth for Petrolimex. The company will expand its retail sales from 70-100 new petrol stations a year. PLX's retail margin is higher than the wholesale segment, so the expansion of the company's gas stations is strategic. The share of retail sales in total sales has increased from 40% to 60-65%. Vietnam's annual petroleum consumption is estimated to increase by 5-6% over the next five years.

The freight optimization is expected to contribute to Petrolimex's growth in 2018. The company is planning a 9% reduction in freight costs during 2018-2019, while working with JX Nippon's strategic partner uses technology to establish advanced gasoline distribution systems and other value-added services across the nation's gasoline and petrol network (for example, car care).

On the other hand, in 2018, the Ministry of Industry and Trade plans to withdraw capital in some companies on the stock exchange such as withdrawing 24.9% of capital at Vietnam Petroleum Corporation (PLX), thereby reducing the ownership ratio from 78.6% to 53.7%.

Based on PLX's prospects for the period from 2018 to 2023, we calculate the discounted cash flow of the current business at a discount rate of 9% per annum, PLX is about 141,000 VND / share.

In terms of technical analysis PLX's current price is plunging in the green area of ​​the Ichimoku Mountains (9.26,52) at the price of 78,000 VND / share, showing the potential for PLX's price increase.
 
plx chart cophieuviet com 6 2018

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