Pocket Option in-depth analysis of TAR stock: Investment Opportunity Q3/2024
Comprehensive analysis of TAR stock (Tien Son Thanh Hoa Joint Stock Company) with Q2/2024 financial data, latest technical indicators and investment strategies by timeframe. The article provides detailed information on market position, growth prospects of 17-20% and important price levels to help Vietnamese investors make effective investment decisions in the current market context.
Overview of TAR stock and current market position
TAR stock - the securities code of Tien Son Thanh Hoa Joint Stock Company - has been trading on the HNX exchange since 2010 with a current market capitalization of 610 billion VND (equivalent to 24.4 million USD). In the first 6 months of 2024, TAR stock increased by 8.7% while the VN-Index only increased by 3.2%, showing relatively superior strength compared to the general market.
Tien Son Thanh Hoa Joint Stock Company with a charter capital of 418.5 billion VND is currently a leading entity in the construction sector in the North Central region. The company has successfully completed more than 50 large and small projects in the past 5 years, including 3 important packages belonging to the North-South expressway project with a total value of over 1,200 billion VND.
Assessing TAR stock in the current context requires considering the situation of Vietnam's construction industry. According to the latest data from the Ministry of Construction, the construction industry recorded a growth rate of 8.5% in 2023 and is expected to reach 8.8-9.2% in 2024 thanks to accelerated public investment disbursement. Total public investment capital for 2024 reaches 670,000 billion VND, creating a major driving force for construction industry businesses.
| Financial Indicators | 2021 | 2022 | 2023 | 6M/2024 |
|---|---|---|---|---|
| Revenue (billion VND) | 512 | 598 | 685 | 362 (+14.2% YoY) |
| Net profit (billion VND) | 28.5 | 35.2 | 42.7 | 23.8 (+15.6% YoY) |
| EPS (VND) | 681 | 840 | 1,020 | 568 (6M/2024) |
| ROE (%) | 6.8 | 7.9 | 9.1 | 9.5 (expected for the full year) |
Currently, TAR stock is trading at 14,600 VND (July 05, 2024), corresponding to a projected 2024 P/E of 13.5x. Compared to the average P/E of 12.8x for the construction and real estate industry listed on HNX, TAR's valuation is at a reasonable level, accurately reflecting the company's growth potential.
Pocket Option, a leading financial analysis platform with over 250,000 users in Vietnam, assesses that TAR stock is in an accumulation phase with a gradual upward trend thanks to positive business results in the first 6 months of the year and favorable construction industry prospects. Investors should pay attention to the upcoming Q2/2024 financial report to be released in mid-July for a more accurate assessment.
Comprehensive analysis of business operations and financials of Trung An stock
To accurately assess the potential of TAR stock, detailed analysis of the business model and important financial indicators is needed. Tien Son Thanh Hoa Joint Stock Company operates a diverse business model with 4 main segments, helping to diversify risks and take advantage of market opportunities.
Revenue structure and profit margins by business segment
In terms of revenue structure, Trung An stock has a clear distribution among operating segments. In the first 6 months of 2024, the construction segment contributed 232 billion VND (64.1% of total revenue), real estate business reached 92 billion VND (25.4%), construction material production reached 26 billion VND (7.2%), and equipment rental activities reached 12 billion VND (3.3%).
Notably, although the construction segment accounts for the largest proportion of revenue structure, the real estate segment contributes up to 38.6% of gross profit thanks to high profit margins (28.6% compared to 14.2% for the construction segment). The strategy of gradually increasing the proportion of the real estate segment from 18% in 2021 to the current 25.4% has helped increase the company's overall gross profit margin from 14.7% to 17.9%.
| Business Segment | Revenue 6M/2024 (billion VND) | Proportion (%) | Gross Profit Margin (%) | YoY Growth (%) |
|---|---|---|---|---|
| Construction projects | 232 | 64.1% | 14.2% | +10.5% |
| Real estate business | 92 | 25.4% | 28.6% | +22.7% |
| Construction materials production | 26 | 7.2% | 19.3% | +8.3% |
| Equipment rental | 12 | 3.3% | 42.7% | +15.4% |
Asset quality and capital efficiency
Regarding asset structure, as of June 30, 2024, TAR has total assets of 895 billion VND, of which long-term assets account for 42%, mostly investment real estate (185 billion VND) and construction machinery and equipment (122 billion VND). Asset quality is rated as good with a low bad debt ratio (1.2%) and a current payment ratio of 1.45 times.
The company's capital efficiency is clearly improving over the years. ROE increased from 6.8% in 2021 to 9.1% in 2023 and is expected to reach 9.5-10% for the whole year of 2024. However, this indicator is still lower than the industry average (12.5%), showing that there is still significant room for improvement. The company is implementing a plan to optimize working capital, shortening the cash cycle from 65 days to 52 days by the end of 2024.
| Indicator | TAR (6M/2024) | Industry Average | Compared to Previous Year | Assessment |
|---|---|---|---|---|
| P/E (projected 2024) | 13.5x | 12.8x | Decreased from 14.2x | Reasonable, slightly higher than the industry |
| P/B | 1.2x | 1.3x | Decreased from 1.25x | Attractive, slightly lower than the industry |
| ROE (%) | 9.5% (expected) | 12.5% | Increased from 9.1% | Improving but still low |
| Debt/Equity ratio | 0.82x | 1.35x | Decreased from 0.85x | Very good, safe capital structure |
| Net profit margin (%) | 6.6% | 5.8% | Increased from 6.2% | Good, higher than industry average |
Pocket Option provides a DCF (Discounted Cash Flow) financial analysis tool showing that the intrinsic value of TAR stock is around 16,800-17,500 VND/share, 15-20% higher than the current price. This model is based on an average revenue growth forecast of 12.5%/year and net profit margin improving to 7.2% by 2026, with a discount rate (WACC) of 12.4%.
Technical analysis and key price levels of TAR stock
Besides fundamental analysis, investors need to master technical factors to optimize entry and exit points. On the weekly chart, TAR stock has completed a 6-month accumulation pattern (12/2023-05/2024) and began an uptrend from the end of May 2024.
Analysis of the main technical indicators gives detailed results as follows:
- The MA20 line (14,200 VND) has crossed above the MA50 (13,850 VND) since June 12, 2024, creating a "golden cross" signal - a positive technical sign for the medium-term trend
- The RSI indicator is currently at 57, still with room to increase before entering the overbought zone (70+)
- MACD is maintaining above the signal line with positive and expanding histogram, confirming that upward momentum is strengthening
- Average trading volume over 10 sessions reached 285,000 shares/session, increasing 32% compared to the previous 30-session average
- Bollinger Bands are widening with prices sticking close to the upper band, showing that the uptrend is occurring strongly
Pocket Option provides detailed analysis of price patterns that have appeared on the TAR stock chart over the past 6 months:
| Technical Pattern | Time of Appearance | Price Level at Appearance | Subsequent Movement |
|---|---|---|---|
| Double Bottom | May 15-25, 2024 | 12,600-12,800 VND | Increased 15.8% in 4 weeks, reaching 14,600 VND |
| Bull Flag | June 10-24, 2024 | 13,800-14,200 VND | Increased 4.2% after breaking the pattern to 14,600 VND |
| Ascending Triangle | Currently forming (since June 28) | 14,300-14,600 VND | Expected to break resistance at 14,800 VND in the next 1-2 weeks |
Based on technical analysis of TAR stock, the following important price levels can be identified:
- Strong resistance: 14,800 VND (short-term), 15,500 VND (medium-term), 16,800 VND (long-term - highest in the past 2 years)
- Important support: 14,200 VND (MA20), 13,850 VND (MA50), 12,800 VND (strong support - double bottom in May)
- Price targets: 15,500 VND (short-term - 1 month), 16,800 VND (medium-term - 3-6 months), 18,500 VND (long-term - end of 2024/early 2025)
Trading volume analysis shows a noteworthy point: price increase sessions usually come with large volume (averaging 320,000 shares/session), while correction sessions have lower volume (averaging 215,000 shares/session). This is a positive sign showing that selling pressure is not high and investors are actively buying during the uptrend.
Macroeconomic factors affecting the prospects of TAR stock
To accurately assess the prospects of TAR stock, it is necessary to consider macroeconomic factors that directly affect the company's business operations. Below is a detailed analysis of the 5 most important macroeconomic factors.
Public investment policy and impact on the construction industry
The Vietnamese government is accelerating public investment disbursement with a total of 670,000 billion VND in 2024, of which 60% is focused on transport infrastructure. In particular, 28 component projects of the North-South expressway for the 2021-2025 period with a total investment of 146,990 billion VND are being actively implemented.
Tien Son Thanh Hoa has won 3 bidding packages for the North-South expressway section through Thanh Hoa and Nghe An with a total value of 1,230 billion VND. The company aims to win at least 2 more bidding packages in the second half of 2024, with a total value of about 800-900 billion VND. These projects will ensure stable revenue for the company in the next 2-3 years.
| Macroeconomic Factor | Current Developments | Specific Impact on TAR | Forecast for Next 6-12 Months |
|---|---|---|---|
| Public Investment | Increased 25% in 2024, disbursement reached 32.2% in 6M/2024 | Ensures stable workload of 1,230 billion VND currently and opportunity to win additional 800-900 billion VND | Continue to increase 15-20% in 2025 |
| Real Estate Market | Recovery from Q2/2024 with transaction volume increasing 18.5% compared to Q1 | Accelerating progress of 2 existing real estate projects and launching 105 townhouses with expected revenue of 325 billion VND | Continue strong recovery in Q4/2024-Q1/2025 |
| Construction Material Prices | Stable, steel decreased 2.3%, cement increased slightly 1.5% | Helps maintain gross profit margin of construction segment at 14-15% | Forecast to increase slightly 2-3% due to increased construction demand |
| Interest Rates | Decreased 0.5-1% since early 2024, currently at 7-8%/year | Reduces financial costs by 3.2 billion VND/year, improves net profit margin | May decrease by another 0.25-0.5% by the end of 2024 |
| GDP Growth | Reached 6.42% in Q2/2024, full year forecast 6.5-7% | Creates favorable business environment, increases demand for housing and infrastructure | Maintain level of 6.5-7% in 2025 |
Besides favorable factors, some challenges should also be noted. Competition in the construction industry is increasingly fierce with more than 65,000 businesses operating. Hoa Binh Construction Group, Coteccons, and CIENCO4 are major competitors actively participating in bidding for transport infrastructure projects, creating competitive pressure for TAR.
Pocket Option provides monthly macroeconomic analysis reports with important economic indicators and impacts on each industry. According to the platform's latest assessment, the macroeconomic environment for the next 6-12 months is forecast to be favorable for TAR stock, especially thanks to the recovery momentum of the real estate market and accelerated public investment.
Detailed investment strategy with TAR stock according to different timeframes
Based on comprehensive analysis of fundamentals, technicals, and macroeconomic factors, specific investment strategies can be developed for TAR stock according to three main timeframes: short-term, medium-term, and long-term.
- Short-term strategy (1-4 weeks): Apply the strategy of "buy in accumulation zone, sell in resistance zone" within the range of 14,200-15,500 VND. Buy when the price corrects to the 14,200-14,300 VND zone and volume decreases, with the RSI indicator returning to the 45-50 zone. Set a selling target at 15,300-15,500 VND when RSI enters the overbought zone (70+). Stop-loss at 13,800 VND if the price breaks the MA20 with large volume.
- Medium-term strategy (1-6 months): Apply trend accumulation strategy with the goal of building a long-term position. Allocate capital into 3-4 buying phases at times when the price corrects to important technical support levels (14,200, 13,850, 13,200 VND). Price target 16,800 VND (highest in 2 years) in Q4/2024 or Q1/2025. Overall stop-loss at 12,800 VND if the market has negative fluctuations.
- Long-term strategy (over 6 months): View TAR as a core investment asset with expected growth of 12-15%/year and dividend of 5-7%. Gradually buy at reasonable price levels below 15,000 VND and hold for 1-2 years. Price target for the end of 2025 is 18,500-19,200 VND based on 2025 EPS forecast of 1,380 VND and target P/E of 14x.
Below is a summary table of important principles and specific implementation methods for each strategy:
| Principle | Specific Implementation Method | Time of Application |
|---|---|---|
| Reasonable capital allocation | TAR should not exceed 5-7% of the portfolio; allocate 60% for long-term strategy, 40% for short-medium term trading | Apply continuously |
| Risk management | Short-term stop-loss: -5% from purchase price; medium-term: -8%; long-term: -15% or when breaking the main trend | Set immediately when opening position |
| Smart DCA strategy | Divide capital into 4 parts: 30% at current price, 25% when decreasing 3%, 25% when decreasing 6%, 20% when decreasing 9% | When beginning to accumulate medium-long term position |
| Profit-taking discipline | Close 50% of short-term position when reaching +8%, 100% when reaching +12%; close 30% of medium-term position when reaching +15% | When price reaches target or enters overbought zone |
| Monitoring catalysts | Increase position when there are positive catalysts: quarterly report exceeding expectations, winning new project bids, industry support policies | According to business results announcement schedule (Q2 on July 15-20, Q3 on October 15-20) |
Pocket Option provides the "TAR Price Alert" tool helping investors set up automatic alerts when TAR stock reaches important price levels or breaks through technical patterns. In addition, the "Position Sizing Calculator" tool helps calculate optimal order size based on acceptable risk level and predetermined stop-loss point.
A noteworthy perspective is that while many investors consider construction industry stocks mainly as short-term trading opportunities, Trung An stock with its diverse business model, low debt ratio, and attractive dividend policy, can truly be a long-term asset in an investment portfolio. Investors can consider applying a "buy and hold" strategy combined with "periodic rebalancing" when prices fluctuate strongly.
Detailed comparison of TAR stock with 3 main competitors
For an objective view of TAR stock's competitive position, it needs to be compared with direct competitors in the segment of small and medium-sized construction companies listed on HNX. Below is a detailed comparison table with 3 main competitors: HU1 (HUD1 Investment and Construction JSC), C47 (Construction JSC 47), and CII (Ho Chi Minh City Infrastructure Investment JSC).
| Indicator (Q2/2024) | TAR | HU1 | C47 | CII |
|---|---|---|---|---|
| Market cap (billion VND) | 610 | 720 | 580 | 1,350 |
| Revenue 6M/2024 (billion VND) | 362 (+14.2% YoY) | 386 (+8.5% YoY) | 312 (+6.2% YoY) | 658 (+12.8% YoY) |
| Net profit 6M/2024 (billion VND) | 23.8 (+15.6% YoY) | 20.2 (+10.3% YoY) | 16.5 (+7.8% YoY) | 48.2 (+14.5% YoY) |
| Net profit margin (%) | 6.6% | 5.2% | 5.3% | 7.3% |
| P/E (projected 2024) | 13.5x | 17.8x | 15.2x | 14.3x |
| ROE (%) | 9.5% (expected) | 7.8% | 7.2% | 10.5% |
| Debt/Equity ratio | 0.82x | 1.24x | 1.35x | 1.08x |
| Real estate proportion in revenue structure | 25.4% | 15.6% | 8.2% | 35.7% |
| Bid win rate 6M/2024 | 42.7% | 38.5% | 32.3% | 45.2% |
| Cash dividend 2023 (expected 2024) | 6% (7%) | 5% (5%) | 4% (4.5%) | 3% (3.5%) |
Comparative analysis shows that TAR stock has several outstanding competitive advantages:
- Highest revenue and profit growth rate in the group (14.2% and 15.6%), only behind CII - a business with twice the size
- Healthiest financial structure with the lowest debt/equity ratio (0.82x), helping reduce financial costs and increase resilience when the market fluctuates
- Good balance between construction and real estate segments (real estate proportion 25.4%), higher than HU1 and C47, helping ensure decent profit margins (6.6%)
- Most attractive valuation (P/E 13.5x) compared to the group average (15.1x), while having the highest dividend rate (6-7%)
- High bid win rate (42.7%) thanks to reputation and experience in the transport construction field in the North Central region
Pocket Option assesses that with reasonable valuation and good fundamental indicators, TAR stock is currently the most attractive investment choice in the small and medium-sized construction business group. Although its market capitalization and revenue are lower than CII, TAR has higher growth potential and more attractive valuation, creating room for price increases of 15-20% in the next 6-12 months.
Conclusion: Investment prospects and price targets for TAR stock
After comprehensive analysis of fundamentals, technicals, macroeconomics, and industry comparisons, specific conclusions and prospects about TAR stock assessment can be drawn as follows:
TAR stock is in a favorable position with a diverse business model, strong financial structure (debt/equity ratio of only 0.82x), and clear development strategy aimed at balancing between construction and real estate. Business results for the first 6 months of 2024 are positive with revenue reaching 362 billion VND (+14.2% YoY) and net profit reaching 23.8 billion VND (+15.6% YoY) showing strong growth momentum.
In terms of valuation, with a projected 2024 P/E of 13.5x and P/B of 1.2x, TAR stock is trading at an attractive level compared to growth potential and industry average. The DCF model shows a fair value of the stock at 16,800-17,500 VND, 15-20% higher than the current price of 14,600 VND.
Factors supporting growth in the next 12-18 months include:
- Recovery momentum of the real estate market from Q2/2024 will boost TAR's real estate business segment, expected to contribute 30% of revenue and 45% of profit by 2025
- Public investment continues to be accelerated with 28 component projects of the North-South expressway being implemented, creating significant bidding opportunities for TAR in the North Central region
- Strategy to diversify revenue sources with gradual increase in the proportion of equipment rental segment (high profit margin 42.7%), expected to contribute 5% of revenue by 2025
- Downward trend in interest rates will help reduce financial costs and stimulate real estate demand, benefiting both of TAR's main business segments
However, investors should also note some risks:
- Increasingly fierce competition in bidding for transport construction projects from large competitors like Hoa Binh, Coteccons
- Construction material prices may increase in the second half of 2024 due to high construction demand, putting pressure on profit margins
- Liquidity risk for medium-capitalization stocks like TAR when the market fluctuates strongly
- Public investment disbursement pace remains slow (32.2% in the first 6 months) which may affect cash flow of ongoing projects
Based on comprehensive analysis, Pocket Option provides the following price target forecast for TAR stock:
- Short-term target (1-3 months): 15,500 VND (+6.2% from current price)
- Medium-term target (3-6 months): 16,800 VND (+15.1% from current price)
- Long-term target (6-12 months): 18,500 VND (+26.7% from current price)
The optimal investment strategy is to combine "buy and hold" for 60-70% of the position, focusing on accumulation in the price range of 13,800-14,600 VND, with the remaining 30-40% applying technical trend trading strategy to increase overall performance. Pay special attention to good buying points when the price corrects to important technical support levels and trading volume is low.
With a strong financial position, clear business strategy, and positive industry prospects, TAR stock deserves to be an attractive investment choice for both medium and long-term investors looking for sustainable growth opportunities combined with stable dividend flow in their investment portfolio.