Banking stock boost market, Securities stocks was sold sharply, BSR - A stock each day


- Index increases all the day.
- Cash flow focus on baking stocks 
- Some other stock still increase well such as VRE VNM GAS HPG
- Securities stocks are sold sharply.
- However, strong resistance level at 900-920 is coming.
- Liquidity increased well: 15% lower than 20-day average, but 30% higher than last trading day.
- Foreigners net buy and trade actively: buy much on VRE VNM CTD, and sell much on NVL CTG VJC VIC


- U.S.-China trade talks went well, and will extend 1 more day. US stock market are 3-week highest.
- WTI and Brent oil price increased sharply to 50.32 and 59.15 USD per berrel due to positive US China trade talks.

- VCB Chairman: already sold 3% shares to foreigners at price ~57,000 VND/share, total value of VND6,200 bill.
- Chairman of all big-4 banks - VCB, CTG, Agribank, BID all raised their requests to support their capital increase. If these banks can't raise capital in 2019, their credit grwoth will be very low as their CAR ratio now are very low already.

BSR (Binh Son Refinery) - A STOCK EACH DAY

Business model:
- BSR owns Dung Quat oil refinery to filter crude oil into finished oil. BSR’s 3 main products o are: gasoline RON92, gasoline RON95, and diesel (DO) which account for ~ 90% total revenue. In addition, some other products are also related to oil and gas such as fuel oil, Petrol jet A-1, LPG, PP plastic pellets.
- Output products are sold to petroleum distribution companies with following percentage: PLX 41%, OIL 25%, and other businesses such as Saigon Petro, Dong Thap Petroleum, Thanh Le...
- 90% crude oil for production is purchased domestically (mainly from Bach Ho basin) from PVOil, the rest is imported; then transported by ships of 110K-150K DWT. Raw material currently accounts for 92% total costs.
- Dung Quat oil refinery is operating stably at full design capacity.
- BSR receives many incentives from the government such as lower land leasing rate, duration term, and especially corporate taxes. From 2017, BSR is free to decide on the selling price without having to pay any taxes (meanwhile imported petroleum products are subject to 10% import tax).

Investment catalysts: NEUTRAL
- Currently, BSR is operating at full capacity, so volume can’t increase in near future. BSR is investing in upgrading and expanding Dung Quat oil refinery plant but the project will only be expected to come into operation since 2020.
- From early 2018, Nghi Son oil refinery plant has come into operation with capacity of 10 mill ton/year (meeting 40% local petroleum demand), which will increase competitive pressure in the future.
- In addition, oil and gas prices have plummeted since late 2018 and will continue to decline in 2019 due to global lower GDP growth. According to previous years' data, BSR's profit margin fluctuates in line with global oil price movements.
- BSR has been approved to sell 49% ownership to strategic shareholders, and the State will hold only 43%. There are currently 2 investors registered to participate: PLX and Nation Indian Oil Corporation (an Indian oil company)

Financial Statement Analysis: OUTPERFORM
Financial position is good due to high cash balance ~ 10K bill, quite safe liabilities to equity ratio at 0.845, and positive and stable cash flow from operation activities. However, borrowing balance is rather high at ~ 11.8K bill and almost 100% is in USD currency, so the exchange rate risk is high. If USD/VND exchange rate increases by 1%, BSR will record ~ 100 bill as foreign exchange loss (equal 1.3% profit before tax).