- Hai An Transport and Stevedoring JSC (HOSE: HAH) is the owner of the Hai An Container Port in Hai Phong. Its businesses are port operation, container shipping, and depot & warehouse operations.
- Container shipping is HAH’s largest segment (accounting for 52.7% of 2020 gross profit), followed by port operation (36.9%) and others (10.4%).
- H1 2021 NPAT–MI surged 127% YoY, which was primarily driven by rising freight rates, a recovery in logistics demand and lower fuel oil prices.  
- HAH guides for 2021G NPAT of VND158bn (+8% YoY), which we believe is relatively conservative as H1 2021 NPAT already exceeded that of 2021G in addition to our positive outlook for the logistics industry in 2021F.
- In 2021F, we expect HAH with its integrated business model and largest container vessel fleet in Vietnam will continue to benefit from rising freight rates and increasing demand for logistics.
- HAH is currently trading at a TTM PER of 14.0x — a 48% premium vs our selected peer group blended median of 9.5x, which we believe reflects investors’ strong expectations for HAH’s future earnings (details on page 11).
- HAH announced it will pay 2021 DPS of VND1,500 — equivalent to a dividend yield of ~3%.
- Key risks: (1) Fourth wave of COVID-19 could disrupt operations and/or add to operating costs; (2) higher fuel oil prices could squeeze margins. 

We believe Vietnamese logistics is in an uptrend due to increasing demand. Thanks to recently signed free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU-Vietnam Free Trade Agreement (EVFTA) and Regional Comprehensive Economic Partnership (RCEP), connectivity in the region will be improved. Combined with an increase in investment inflows from multinationals relocating from China and the rapid adoption of e-commerce, we anticipate demand for logistics will surge, thus supporting HAH’s future earnings. 

HAH’s H1 2021 NPAT exceeded its 2021G. HAH finished H1 2021 with NPAT of VND183bn — 16% higher than its 2021G of VND158bn. In addition to our expectation for freight rates to remain high in H2 2021 along with increasing logistics demand, we believe HAH will achieve stronger results than its conservative 2021 forecast. In 2021, HAH will increase its vessel container capacity by ~30% and purchase ~3,000 new twenty-foot equivalent unit (TEU) empty containers to ensure stable and high-quality supply to customers amid the current global container shortage. Moreover, the Pan Hai An Depot project is expected to break even in 2021, per management.