Vietnam Stock Market News

From July 20 when VN Index fell to the bottom of 412 points to October 14, most seafood shares all posted the higher rises in prices compared with market's average. Most impressively, TS4, BAS and FMC surged 162 percent, 132 percent and 133 percent in turn during the period while FBT rose by 25 percent only. Also, newly listed share codes like AAM and ATA soared strongly.

Statistics showed that the fisheries sector in Jan-Sep earned $3.02 billion from exports, down 9.5 percent year-on-year. In three months of July, August and September, Vietnam's seafood export still retained a downfall trend despite the world's economy reporting a positive recovery. In the year early, Russia had banned the import of Vietnam processed seafood from last December to May 2009. Egypt, Spain, US, France, Italy and New Zealand and some organisations launched the boycott programmes as for Vietnam's tra and basa products. In June, US also decided to continue maintaining the anti-dumping tariff on Vietnam's catfish.

Factually, the revenue of listed seafood processors mainly comes from exports. In the first half, average revenue from export of 17 companies accounted for 74 percent of their total revenue. The higher ratio of over 90 percent was seen in Basa JSC, Mekong Seafood, Ben Tre Aquaduct, Cuu Long An Giang Fisheries. Export earnings of the above companies affected strongly to Vietnam's monthly export turnover.

First six month business results of seafood companies were not much satisfactory. Among 17 listed firms, seven posted big losses. Compared with the same period of 2008, profit of 10 enterprises slumped 77.4 percent on average although their total revenue still surged nearly 4 percent.

Even Nam Viet JSC (coded ANV) reported a loss of 80 billion dong, Ben Tre Aquaduct (coded FBT) lost 57 billion dong.
However, exports of seafood processors started to rally. AGF earned $20 million from Jan-Jun export, but its export turnover in Jan-August reached over $32 million. The figures of Ben Tre Aquaduct were only $4 billion and $9 million.

Periodically, seafood export usually jumps in year end. Yet, Vietnam's export in the rest of 2009 will face some certain difficulties in terms of materials for processing because of the cold weather in the northern and floods in the central region. Furthermore, EU decided to apply IUU law on seafood imports to the region from January 1, 2010. Seafood exporters to EU must gain certificates of ship and exploitation region.

This year's seafood export is hard to reach the previous year's figure. In three remaining years, the average seafood export of Vietnam must bring in $520 million a month, which can not be reached because the highest figure was recorded at $483 million a month only. Thus, 2009 seafood export will drop 5 percent y-o-y.

Up to October 14, among listed seafood companies, only Mekong Seafood JSC (coded AAM) announced Q3 business report with the profit of 14.56 billion dong.

According to statistics, average EPS of last four quarters (till Q2 of 2009), 17 fisheries processors only gained 1,341 dong that may reach 2,427 dong in the whole year and P/E forward (calculated based on the price of October 14) is 16 times, approximately to the market's average level.

Therefore, in medium and long term, shares of many seafood companies remain very attractive but in short term, investors should be cautious as for the overheated increase of some shares.