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Behind the impressive net profit growth in the fourth quarter

According to SSI, "recovery" and "growth" will still be the two main stories that cash flow will come to in the coming period, especially with the very low interest rate environment in the country and recession risks from other economies. somewhat toned down.

In the newly published strategic report, SSI Securities assessed that seasonal factors (Lunar New Year 2023 falls in January) have greatly affected the macroeconomic comparison results of early 2024 with the same period and therefore need must wait for February data to have more accurate views on production and consumption.

In general, the economy is still in the recovery phase but the pace is relatively slow when key factors such as manufacturing and consumption have not yet been able to return to the same level of excitement as before the pandemic. In February, the focus will be on domestic consumption demand during the Lunar New Year.

Regarding the stock market, Vietnam's stock market had a quite busy first month of the year with many important information received. The focus in the first half of the month is the Banking group with a series of important events. Meanwhile, the last days of the month were quieter with attention focused on the fourth quarter 2023 business results reporting season and moves from the FED's policy meeting.

Regarding the fourth quarter profit picture, the number continues the positive recovery trend since the bottom in the fourth quarter of 2022. Total net profit of the entire floor (1,130 businesses as of February 5) increased sharply by 35.3% over the same period. period last year and increased by 4.8% compared to the previous third quarter, thereby recording the highest profit within 5 quarters.

However, SSI noted that behind the impressive net profit growth, there are also signs that the market recovery is still in the initial stages and there are still many challenges ahead in the recovery process. . The reason is that the revenue scale did not increase correspondingly, the total market revenue continued to decrease slightly; Gross profit margin even decreased while abnormal profits coming from other income and financial income increased sharply.

Therefore, SSI Research believes that profit growth in the fourth quarter of 2023 depends a lot on the low comparative base of the same period in 2022, in addition to sudden earnings, which have not shown much growth. from within the enterprise. However, besides the remaining difficulties, the picture of the final quarter of 2023 financial statements is also encouraging when businesses are in the process of adaptive restructuring, creating a stepping stone for the expected recovery of business segments. core in the coming quarters of 2024.

Ready for "healthy setbacks"

SSI forecasts that the VN-Index will likely fluctuate in the range of 1,160 - 1,210 points in the trading sessions of the second half of February with a constant state of struggle. The support zone of 1,127-1,130 points is a strong support zone; In case the market corrects, investors should consider increasing the proportion of stocks in this area and conversely should return the portfolio to a safe state if the index cannot maintain. However, investors need to be ready for "healthy setbacks" in the market to regulate supply and demand (the estimated P/E for 2024 is still attractive in the long term when maintained at 10.3 times - low). significantly higher than the average level of 13.8 times in the last 5 years).

"When industry groups have not agreed on growth, cash flow in recent times has been in a cycle of rotation and overturning to look for short-term opportunities rather than welcoming new cash flows into the market," SSI assessed.

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Regarding investment strategy, "recovery" and "growth" will still be the two main stories that cash flow will come to in the coming period, especially with the very low interest rate environment in the country and recession risks from foreign countries. The major economy is somewhat subdued. Investment topics that can be relied on to find opportunities in the early stages of the year include:

(i) The group of enterprises whose business status has created a bottom has recovered and their stock prices have recovered more slowly than the general average

(ii) The group maintains sustainable growth in core activities

(iii) Information during the shareholders' meeting season with plans to increase capital/expand business plans of businesses after recovery

(iv) Business groups will benefit from the Government's supportive monetary/fiscal policies and new Laws that are gradually being completed.