Recovery with low liquidity and strong resistant level is coming, ACB - A stock each day


- Index increased well in all day
- VNM/GAS/MSN/BID contributes most to Index increase. Most other stock just slightly increase.
- However, liquidity is much lower on context that strong resistance is coming. More selling pressure is expected in next few sessions.
- Liquidity significantly reduced: 34% lower than 20-day average, and 16% lower than last trading day.
- Foreigners net sell, focusing on VJC (45 bill) CTG (32 bill), even though they net buy up to 57 bill on VNM 


- US: financial invetors hope that FED will only raised rate since 2H 2019 due to political pressure and financial fluctuations. If it's true, it's good for stock market currently. But it can be potential risk for even much worse stock market if FED acts to raise rate not as expected.
- WTI and Brent oil price increased ~7% to 48.62 and 57.68 USD per berrel in 2019.

- Credit growth in 2018 is ~14%, NPL ratio reduced from 1.99% in 2017 to 1.89% in 2018.
- State bank: credit growth plan for 2019 is 14%, and giving credit growth priority to banks who apply Basel II standard soon. Credit growth continue to be low in 2019 to control inflation.

ACB (Asia Commercial Bank) - A STOCK EACH DAY

Business model:
- ACB positions itself as a private retail bank since 2000s (when other banks still focused on wholesale banking, ACB sought a different customer segment). Individual loans account for ~ 60% of ACB's outstanding loans and ~40% interest revenue.
- In the past, ACB traded investment products such as gold with high risk high return, however, from 2013 to 2016, ACB has successfully restructured its business model from gold market investments to traditional lending business with more safety.
- In period 2012-2014, ACB suffered some difficulties as Mr. Kien (ACB’s Chairman at that time) was arrested which has affected ACB's deposit and credit growth very much. Non-performing loan (NPL) ratio is very high as ACB has many bad debt loans to Mr. Kien’s subsidiaries which operated badly. However, from 2015, ACB's operations have stabilized, recovered well, and increase provision for these bad debts. By 2017 end, ACB has finished making provision for all G6 companies (related to Mr. Kien).

Investment catalysts: NEUTRAL
- Profit growth in 2019 will be much reduced from ~140% to only 15% as 1) in period 2015-2017, ACB has recorded a lot provision expenses for bad debt to reduce non-performing loan ratio (NPL) to very low level. In 2018, ACB doesn’t have to record such high expenses anymore, reducing provision expense very much. In 2019, provision expenses can slightly increase due to higher credit balance; 2) lower credit growth as state bank control credit growth of banking industry to 14% to control inflation.
- Even ACB still has some other positive factors such as: 1) provision reversal of bad debt recorded, 2) slightly NIM improved. However, these factors can compensate for the higher provision expenses and lower credit growth.
- However, ACB’s valuations are very good with PE ~8.11 and PB ~1.6

Financial Statement Analysis: STRONGLY OUTPERFORM
ACB has very good financial statement position due to:
 - High CAR ratio at 11.5% by 2017 end, ACB will not face with pressure to increase capital in near future and can follow Basel II in2020 on time. 
- Very low NPL ratio at 0.85% by 3Q2018, and ACB finished make full provision for all potential bad debts due raised from G6 Group of Mr. Kien, GP Bank, and Construction bank, and all VAMC bonds.
- Very low loan to deposit ratio at ~ 82.4%, ACB is very cautious in lending activities. ACB’s LDR ratio is top 3 lowest in the industry.