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Power Of Data
Power Of Data

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Internet is a young sector in Vietnam, obtaining its first permanent international connection in December 1997. This late start is partly explained by government hesitation to open the economy with the world. The Internet is perceived as a powerful tool for research and economic development but also a potential threat by spreading variety of views and opinions that are not consistent with the Vietnamese government’s will. In order to guard against this threat, the State has exerted strong control over Internet development and websites content.

As of 2011, Vietnam has 30.5 million Internet users, equivalent to 35.07 per 100 inhabitants.

E-commerce is a largely untapped opportunity in Vietnam since Vietnam has about 87 million aspiring consumers with strongly growing incomes when the retail market is highly fragmented and quality retail space is rare and expensive. E-commerce could be a booming  segment in near future. 

See more at: http://www.stoxresearch.com/reports/143-vietnam-internet-report-2013.aspx
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Internet is a young sector in Vietnam, obtaining its first permanent international connection in December 1997. This late start is partly explained by government hesitation to open the economy with the world. The Internet is perceived as a powerful tool for research and economic development but also a potential threat by spreading variety of views and opinions that are not consistent with the Vietnamese government’s will. In order to guard against this threat, the State has exerted strong control over Internet development and websites content.

As of 2011, Vietnam has 30.5 million Internet users, equivalent to 35.07 per 100 inhabitants.

E-commerce is a largely untapped opportunity in Vietnam since Vietnam has about 87 million aspiring consumers with strongly growing incomes when the retail market is highly fragmented and quality retail space is rare and expensive. E-commerce could be a booming  segment in near future. 

See more at: http://www.stoxresearch.com/reports/143-vietnam-internet-report-2013.aspx
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According to the State Bank of Vietnam, the ratio of non-performing loans (NPL) in late 2010 was 2.16 %, in 2011 was 3.1 %, and reached a peak in Sept 2012 at 4.93%. However, the actual bad debt problem is much more severe than the number reported. In late 2012, SBV organized a special Supervisory Authority to assess the bad debt situation of local banks. This group reported a much higher NPL ratio of 8.6% (or VND220,000 billions of NPL).
 In March 2014, the international credit agency Moody’s reported a “negative” outlook  for the banking system of Vietnam, and a NPL estimate of 15%.
According to our review of International Financial Reporting Standards (“IFRS”) against the local standards and regulations (“VAS”) for several banks and non-banks, it is our finding that NPL categorized under IFRS, which is more conservative, is usually 4 times higher than VAS. This would imply a NPL ratio of around 15% in an approximation basis.
See more at: http://stoxresearch.com/Reports/14A-vietnam-consumer-finance-report-2014.aspx
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During investment boom, many VIetnam SOEs had received government-subsidized credit and diversified into non-core areas. Highly leveraged firms (D/E ratio > 5) are predominantly in construction, transportation and real estate.

Many SOEs are overleveraged and/or invested in industries hit by downturn (e.g., HUD, Songda, Vinashin, Vinalines). 

Other SOEs (e.g., Viettel, Vinarubber, Vinacomin) are highly profitable with low debt. 

Others do not earn a market return due to social mission (e.g., EVN, VEC, Petrolimex).

See more at: http://www.stoxresearch.com/reports/14D-preliminarily-review-on-state-owned-enterprises-of-vietnam.aspx
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Vietnam’s underdeveloped infrastructure and lack of human resources pose great challenges for logistics sector

•Infrastructure investment is not yet proper for country’s development.

•Many seaports and airports also lack supporting logistics distribution centers, which can result in increased inventory and idle time for trucks, ships and planes

•Vietnam logistics industry is in shortage of skilled manpower due to the lack of sufficient training and education in the field
See more at: http://stoxresearch.com/Reports/13E-vietnam-logistics-report-2013.aspx
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Vietnam both exported clinker and cement, in which clinker takes a large part. Main export destinations are Bangladesh, Indonesia, Philippines, Taiwan, and Malaysia.

Vietnam only exports cement to Chile in 2013, average price of US$53.7 per ton.

Popular FOB price is US$37-40 per ton clinker, and US$51-60 per ton cement. Vietnam’s FOB price is lower than the regional price from US$10/12 to US$15/16 per ton. It is easy to see that FOB price was even lower than domestic price, making exporting activities unprofitable. 

See more at: http://stoxresearch.com/Reports/14F-vietnam-cement-report-2014.aspx
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NPL reported by banks under local accounting standards never higher than 5%. SBV’s Supervisory Authority once reported a 8.6% NPL in mid 2012.

According to the SBV, the ratio of non-performing loans (NPL) in late 2010 was 2.16 %, in 2011 was 3.1 %, and reached a peak in Sept 2012 at 4.93%. However, the actual bad debt problem is much more severe than the number reported. In late 2012, SBV organized a special Supervisory Authority to assess the bad debt situation of local banks. This group reported a much higher NPL ratio of 8.6% (or VND220,000 billions of NPL). In March 2014, the international credit agency Moody’s reported a “negative” outlook  for the banking system of Vietnam, and a NPL estimate of 15%. According to our review of International Financial Reporting Standards (“IFRS”) against the local standards and regulations (“VAS”) for several banks and non-banks, it is our finding that NPL categorized under IFRS, which is more conservative, is usually 4 times higher than VAS. This would imply a NPL ratio of around 15% in an approximation basis.

See more at: http://stoxresearch.com/Reports/14A-vietnam-consumer-finance-report-2014.aspx
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The equitisation of SOEs in Vietnam started from early 1990s. The program got peak in 2005-2006 thanks to the high flows of foreign indirect investments into Vietnam at the same time with the booming of stock markets. However, for various reasons, it was extremely slow in the last 5 years. From mid 2011, SOE Reform has been officially put on radar as one of The Three-Pillar Reform of Vietnam (together with the public spending/investment reform and the banking sector restructuring).

SOE privatization (which normally referred as equitisation) has been resumed recently aggressively with various measures by the Government. In our view, among many other reasons, the main motivation for the Government to push such strong actions is to help solve the soaring State budget deficit issue.

Unlike the equitisation in prior years, the SOE privatization this time has introduced a much deeper reduction of State capital in SOEs...

See more here: http://www.stoxresearch.com/reports/150-vietnam-ma-research-report-2013-and-1h2014.aspx
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Total Vietnam M&A deal value is on a decreasing trend since 2011: Vietnam M&A market has been on a decreasing trend, both in terms of number of deals as well as deal value. In 2013, StoxPlus recorded 182 M&A deals with total transaction value of US$3.2bn. This indicates a 36.7% decrease in deal value compared to the US$4.9bn deal value in 2012. In the first 6 months of 2014, we have recorded 88 deals concluded with a total value of over US$1bn. Given that, we expected total M&A deal value in 2014 to reach approximately US$2bn for the whole year of 2014. 

See more at: http://www.stoxresearch.com/reports/150-vietnam-ma-research-report-2013-and-1h2014.aspx
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Cement demand landscape can change significantly based on the implementation of infrastructure projects. However, the status of those projects is very uncertain.

Vietnam is a developing country and still short of all types of infrastructure, both the hard and the soft infrastructure. There are 243 projects planned until 2030, which is value at a total of US$221bn.

However, the status of these infrastructure projects is very uncertain, depending on the availability of funding. Yet, State deficit continues to widen in 2013, to nearly 6% of GDP. Given the lack of funding, the plan for infrastructure is more of a wish list with low chance of being implemented as planned.

See more at: http://stoxresearch.com/Reports/14F-vietnam-cement-report-2014.aspx
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