Stocks to ride on Vietnam economic recovery in 2021

Since late 2020 to early 2021, Vietnam’s stock market has witnessed a strong rise in terms of liquidity, capital inflows and number of accounts. A certain number of stocks are set to ride on the country’s strong economic rebound this year.

Oil prices in 2021 are set to go up and prompt to higher oil stocks value. Photo: Hung Huy

Cement: While export growth is expected to halt due to the Covid-19 situation globally, the domestic market is on the recovery path given strong demand, putting the sector growth forecast to stay at 5-7% against the previous year.

Such positive outlook is thanks to a recovery in infrastructure development, the real estate and positive inflows from foreign direct investment (FDI).

In 2020, most of stocks from cement producers, such as HT1, BCC, and BTS all rose by corresponding rates of 22%, 23% and 8% against the beginning of the year.

Petroleum: Forecasts from international organizations expected brent oil prices to average US$52 per barrel in 2021, up 23% year-on-year.

A higher oil prices on the international markets would be a major boost to oil and gas projects in Vietnam, including the ongoing Dai Nguyen WHP, LNG Thi Vai and Long Son Petrochemicals Complex.

Profit growth of the petroleum sector could surge by 35.7% year-on-year in 2021, with SSI Securities Corporation predicting pre-tax profit growth of Petrolimex (PLX), Vietnam’s largest petroleum distributor, to expand by 200% year-on-year this year to VND4.8 trillion (US$208.65 million).

For PV Gas (GAS), an estimated higher fuel oil (FO) price by 19% year-on-year in 2021 could lead to the firm’s profit to increase by 16.3% year-on-year.

PetroVietnam Technical Services Corporation (PVS) is set for a busy year with its active bidding for major projects such as Block B, Nhon Trach power plants No.3 and No.4, as well as with other projects abroad.

PetroVietnam Drilling and Well Services (PVD) could also enjoy a fruitful year with demand for jack-up rigs on high following active oil exploration and production continues to rise.

At present, most stocks prices of oil companies have return to their pre-Covid-19 level, while a hike in oil prices could further prompt investors to oil stocks.

Retail sector: while the sector is highly susceptible to diseases and pandemic, customers have somehow adapted their lifestyles to a new circumstance following a Covid-19-ravaged year.

Nevertheless, the recovery process of Mobile World Investment Corporation (MWG) would be slow as the firm is operating in non-essential consumer services sector. Along with the economic recovery, MWG revenue growth from mobile phones and household appliances could go up by 10% year-on-year, lower than the 20% growth rate in the pre-Covid-19 period.

FPT Retail (FRT) would face a similar situation as its main business is from selling mobile phones.

For Phu Nhuan Jewelry Joint-Stock Company (PNJ), a recovery in gold prices would help ensure the firm’s revenue growth this year.