Update BWE - Sep 14th, 2020

 BWE UPDATE - Upgrade to BUY with TP: 29,536VND/share: BWE announced its 1H2020 results with top line of VND 1,425 bn (+24% YoY) and an EAT of VND 249bn (+20% YoY) completing 45% and 53% of its targets respectively. The increasing water price, which went up 5% this year in Binh Duong and is scheduled for a 5%-yearly increase for the period of 2019-2022, is one of the key factors contributing to the company ‘s robust growth. In addition, total water consumption increased by 8% YoY and the newly launched waste water treatment segment also helped BWE’s top line increase. For 2020, we expect a top line of VND 3116 bn (+22.4% YoY) and an EAT of VND 571 bn (+20% YoY). Using a combination of DCF and P/E as our valuation method, our 1-year- target price for the stock is 29,536/share equivalent to an upside of 12.3%. Including in the dividend yield, total return we expect from the stock is 16.1%. Thus we upgraded our recommendation to BUY.

 

 


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