TAILIEUCHUNG - Vietnam Airlines corporation (HSX: HVN)

International market share will be threatened by Bamboo Airways, who planned to receive B787 for international route at the end of 2019. Bamboo Airways tends to apply full-service strategy, oriented to be a 5-star airline, and compete directly to the flag carrier. With similar services, lower air fare, mysterious attraction, Bamboo Airways could take the international market share from Vietnam Airlines. | EQUITY RESEARCH SELL downgraded Vietnam Airlines Corporation HSX HVN Report date Aug. 07 2019 Current price VND 39 200 Target price VND 34 000 Downside Bloomberg HVN VN Equity Market cap VND 59 426bn USD 2 518mn 52 weeks movement VND 30 300 - VND 44 000 Average daily value VND USD 726 650 FOL 30 Current FO Too many aircrafts for its own demand Thoughts on the stock We downgrade to SELL rating for HVN with target price of 34 000 VND share International market share will be threatened by Bamboo Airways who planned to receive B787 for international route at the end of 2019. Bamboo Airways tends to apply full-service strategy oriented to be a 5-star airline and compete directly to the flag carrier. With similar services lower air fare mysterious attraction Bamboo Airways could take the international market share from Vietnam Airlines. Vietnam Airlines has been reforming its fleet through operating lease in an attempt to be more efficient. Selling old-owned aircrafts will gradually reduce debt pressure lowering interest expenses and foreign exchange losses. However it puts more pressure on short-term results due to increasing lease expenses and reducing operating margin as seat capacity could grow faster than passenger demand. We maintain our view on VND USD exchange rate and a lower average fuel price that will favor Vietnam Airlines earnings. Price movement Volume 000 shares ---------HVN 000 VND Stock performance 1M 3M 12M HVN VNIndex Source Bloomberg Major shareholders Commission for the Management of State Capital at Enterprises What s new For 2Q19 HVN reported consolidated earnings of VND 79bn down yoy in light of i domestic market share reduced by to ii higher lease expenses which pressed gross margin to compared to 2Q18 s margin of and iii extraordinary gains from sale-lease back of VND 64bn from one A350-900XWB. We continue to revise down our forecasted FY19 and .

• Đầu tư Chứng khoán
• Vietnam Airlines corporation
• Too many aircrafts for its own demand
• Earnings model
• Financials and valuation summary
• Foreign exchange losses