瑞信-亚太地区-科技行业-越南与科技供应链：越南会是下一个主要的科技中心吗？-2019.3.21-54页.pdf

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.21 March 2019Asia Pacific/VietnamEquity ResearchMulti Industry Vietnam and the tech supply chain THEMEThe Credit Suisse Connections Series leverages our exceptional breadth of macro and micro research to deliver incisive cross-sector and cross-border thematic insights for our clients.Research AnalystsFarhan Rizvi,CFA65 6212 3036farhan.rizvicredit-Kim Nguyen65 6212 8863kim.nguyencredit-Keon Han82 2 3707 3740keon.hancredit-Thompson Wu886 2 2715 6386thompson.wucredit-Kyna Wong852 2101 6950kyna.wongcredit-Is Vietnam the next major tech hub?Figure 1:Key takeaways from the CS tech company surveysCountryKey survey conclusionsImplications for VietnamKoreaVietnams key attractions are cheap labour,tax incentives&govt.supportCorporates will continue to expand capacityKorea to continue to lead FDI flows Samsung and LG remain committed to future investmentsTaiwanNo plans to shift China capacityChina still offers most mature supply chain Manufacturers exploring new destinations but Vietnam faces strong regional competitionOnly 5-10%of capex allocation outside Greater China over 2019-21Potential incremental tech FDI to Vietnam of US$400-600 mnChinaLabour-intensive simple-assembly products more suitable for VietnamMore companies conducting feasibility for setting up assembly lines15-20%of capex likely to be allocated overseas over the next 3 yearsPotential incremental FDI to Vietnam of US$1.5-1.8bnSource:Company data,Credit Suisse estimatesThe rise in labour costs in China and need for an alternative manufacturing base has led to the emergence of Vietnam as a potential tech manufacturing hub.In this report,CS Vietnam research and the Asia technology team come together to explore the viability of Vietnam as a tech manufacturing base.A fast-developing manufacturing powerhouse.Vietnam has emerged as a major investment and export destination attracting FDI across multiple industries.Its attractiveness as a major manufacturing hub is premised on:(1)dedicated industrial&economic zones;(2)its strategic location;(3)robust infra spending;(4)attractive investment incentives;and(5)low labour costs.What do the Korea and Greater China tech surveys highlight?Korea has been the largest source of FDI for Vietnam since 2012,led by Samsung and LG.Surveys by CS Korea tech research with five major manufacturers identified cheap labour,attractive investment incentives and government support as key reasons for investing,with plans to expand capacity.In contrast,corporate surveys by Greater China research indicate no plans by Taiwan ODMs to shift China capacity due to comprehensive supply chains,but rising costs have led corporates to explore new destinations including Vietnam for expansion.Chinese corporates see labour-intensive assembly production as more suitable for the ASEAN region.Limited incremental positives in the offing.We see continued FDI from Korea tech based on our surveys;however,incremental FDI from Greater China tech is likely to be more modest.CS estimates US$1.5-2.4 bn(2-4%)of incremental tech FDI from Greater China by 2021.We highlight companies exposed to the FDI theme,including KBC,SNZ,HT1,CTD,CII,HT1,GMD and HPG.HT1,CII and HPG also screen well on CS HOLT.Second-order impact in the form of higher discretionary spending should benefit MWG,VRE and VPB(all OUTPERFORM).21 March 2019Vietnam and the tech supply chain2Focus charts and tablesFigure 2:Key reasons for Vietnams attractiveness as a major manufacturing and investment destinationKey attractions of VietnamCS commentsStrategic locationLocated at the centre of ASEAN with close proximity to China and Singapore.Its long 3,260 km coastline provides direct access to South China Sea&major shipping routes.Dedicated industrial and economic zones 3 key economic zones(North,Central and South)with dedicated industrial landbank of 83k ha&35k ha of new capacity by 2021.Strong infrastructure spendingRobust infrastructure spending 6.3%of GDP on average over the past 5 years more than twice the average in ASEAN.Attractive tax incentives and tariffs Preferential tax rate of 10-17%with 2-4 years of tax exemption and up to 50%reduction for another 4 years.Land rental incentivesGenerous land rental exemption period from 3 years to the whole rent period depending on type of investment and project location.Low cost hardworking labour forceA young,hardworking and cheap labour force(52%of people within working age)and one of the lowest hourly minimum wages in the region of US$5.1 below Cambodia(US$6.0),India(US$6.0),Indonesia(US$6.1),Philippines(US$7.9)and China(US$8.6)Source:Credit Suisse estimatesFigure 3:Korea has led FDI flows since 2012 driven by tech majors Samsung and LG Figure 4:helping Vietnams share of global merchandised exports to double since 20120.05.010.015.020.025.030.035.040.02012201320142015201620172018Registered FDI by country(US$bn)JapanKoreaSingaporeHongkongChinaOther0.53%0.62%0.70%0.79%0.98%1.10%1.21%1.23%0.20%0.40%0.60%0.80%1.00%1.20%1.40%20112012201320142015201620172018Source:Vietnam Ministry of Planning and InvestmentSource:WTOFigure 5:US$1.5-2.4 bn of incremental FDI from Greater China tech over the next 3 yearsFigure 6:Companies exposed to the secular FDI trend and beneficiaries of discretionary spending 38.5 52.4 66.9 1.9 20.030.040.050.060.070.080.02013-152016-182019-21EImplemented FDIOption value-Greater China techUS$bnReuters Market Cap 6M ADT Free Float Available TickerUS$mn)US$mn)(%)FOL room(%)19E20E19E20ENon covered companies exposed to FDI ACV.HNO8,2570.244.601.029.327.820.919.7HPG.HM2,9208.0053.539.27.17.313.514.0CTD.HM4680.9985.652.77.26.717.816.3GMD.HM3561.0060.80-17.214.717.816.3KBC.HM3141.6475.4329.19.39.28.18.3SNZ.HNO2920.0020.460.5n.an.an.an.aHT1.HM2590.1919.9643.08.58.013.514.0CII.HM2660.9683.3917.97.87.516.515.5Beneficiaries of rising discretionary spending-CS CoveredVRE.HM3,8102.5543.016.828.623.29.810.8MWG.HM1,7043.1187.1-11.19.529.226.6VPB.HM2,3822.3569.0-6.86.219.117.1P/E(x)ROE(%)Source Vietnam Ministry of Planning and Investment,Credit Suisse estimatesSource:Bloomberg Professional Service,I/B/E/S,Credit Suisse estimates21 March 2019Vietnam and the tech supply chain3Is Vietnam the next major tech hub?What makes Vietnam an FDI magnet?Vietnam has emerged as a major investment and export destination in the region,attracting FDI across multiple industries from manufacturing and real estate to energy and retail,etc.The cumulative implemented FDI since 2012 is US$101 bn(7%of GDP)with manufacturing leading the way(55%),followed by real estate(11%)and energy(9%).This has led to the rapid development of the industrial land market with more than 83,000 ha of land currently dedicated to industrial parks(from just 335 ha in the 1980s)with 30,000-35,000 ha of landbank to be added by 2021(CBRE&JLL).Vietnams attractiveness as a major manufacturing and export hub is driven by:(1)dedicated industrial and economic zones;(2)its strategic location;(3)robust infra spending;(4)investment incentives for tax and tariffs;(5)land rental incentives;and(6)a hardworking labour force at competitive costs.Decoding the Korean tech experienceSouth Korea remains the largest source of FDI for Vietnam,contributing more than US$60 bn in foreign direct investment(FDI)to date(24%of total registered FDI since 2012)led by Samsung electronics(US$18 bn to date).In order to understand the experiences of some of the largest Korean tech firms and their future investment strategies in Vietnam,the CS Korea tech research conducted company surveys with five of the largest corporates.The three key takeaways are:(1)the key reasons for choosing Vietnam were availability of cheap labour,attractive tax incentives and strong government support;(2)corporates are largely satisfied with operations and would continue to expand production particularly to new sites;and(3)US-China trade tensions have a fairly moderate impact on their outlook for Vietnam as most of them had already started shifting production to Vietnam ahead of these developments.Will Greater China tech relocate?While Korea tech has been investing aggressively for years,investments from Greater China have been limited.The CS Greater China technology research conducted surveys with a number of tech companies to understand whether they are actively exploring the option to diversify manufacturing to Vietnam.The key conclusions from the survey are:(1)Taiwan ODMs have no plans to physically shift China manufacturing capacity elsewhere,as China still offers the most mature and comprehensive supply chain;(2)labour supply shortages,rising costs and US-China trade tariffs have led manufacturers to continue to explore new destinations for expansion,but Vietnam faces strong competition from India;(3)Chinese manufacturers see labour-intensive and simple assembly production as more suitable with several Apple supply chain companies operational and(4)more companies are evaluating feasibility to set up production lines in Vietnam and elsewhere in ASEAN.Limited incremental FDI from new sourcesBased on the conclusions of our company surveys,we see continued FDI momentum in Vietnam from Korea tech;however,incremental flows from Greater China are likely to be more modest.CS Research estimates US$1.5-2.4 bn of incremental FDI flows from Greater China tech over the next three years(2-4%of implemented FDI)with the broad structural FDI story continuing over the medium to long term.We highlight some non-covered companies which are exposed to the FDI theme including industrial parks(KBC,SNZ),construction and cements(CTD,CII,HT1),ports(GMD),steel(HPG),and aviation(ACV).HT1,CII and HPG also rank well on HOLT.A few of these names have limited free float and liquidity,with SNZ and ACV being OTC listed(UPCOM).Second-order impact in the form of higher discretionary spending should benefit MWG,VRE and VPB.All three stocks are rated OUTPERFORM.Vietnam is a major FDI and export hub Strategic location,generous incentives and low labour costs are key attractionsSouth Korea is large source of FDI since 2012(24%contribution)Our surveys reveal continued investment by Korean tech Greater China tech has no plans to relocate China capacityBut rising costs has led to capacity expansion in ASEAN and India Chinese tech views simple assembly production as more suitable for Vietnam CS Research estimates US$1.5-2.4 bn of incremental FDI from Greater China techCompanies exposed to the FDI theme include:KBC,SNZ,CTD,CII,HT1&HPG21 March 2019Vietnam and the tech supply chain4Table of contentsFocus charts and tables2Is Vietnam the next major tech hub?3What makes Vietnam an FDI magnet?.3Decoding the Korean tech experience.3Will Greater China tech relocate?.3Limited incremental FDI from new sources.3Strategic location with strong growth opportunity.10Robust infrastructure spending.11Wide ranging FTAs helping to accelerate global integration.16Koreas New Southern Policy.22Gravitating towards Vietnam.23Why Samsung is leaving China?.24Findings from the CS Korea tech research surveys.25Taiwan ODM not interested in relocating from China.26Chinese manufacturers actively seeking capacity expansion for cable assembly.27Credit Suisse HOLT analysis.38APPENDIX I Questionnaire with Korean technology companies42APPENDIX II Taiwan technology companies questionnaire44APPENDIX III Questionnaire with Chinese technology companies46Company A.46Company B.46Company C.47Company D.47Company E.4821 March 2019Vietnam and the tech supply chain5What makes Vietnam an FDI magnet?Vietnam has emerged as a major investment and export destination in the region attracting FDI across multiple industries from manufacturing,real estate,energy,retail,IT etc.The cumulative implemented FDI since 2012 is US$101 bn(7%of GDP)with manufacturing leading the way(55%)followed by real estate(11%)and energy(9%).This has led to the rapid development of the industrial land market over the years,with more than 83,000 ha of land currently dedicated to industrial parks across three zones with 30,000-35,000 ha of landbank to be added over the next 2-3 years(according to JLL Research).This compares with only 335 ha of industrial landbank 30 years ago.Vietnams attractiveness as a major manufacturing and export hub in ASEAN is driven by:(1)dedicated industrial and economic zones;(2)strategic location;(3)robust infrastructure spending;(4)investment incentives particularly in area of tax concessions and tariffs;(5)attractive land rental incentives;and(6)a hardworking labour force with competitive cost structure.Figure 7:Robust FDI flows led by manufacturing Figure 8:with Korea and Japan the largest contributors 0.05.010.015.020.025.030.035.040.02012201320142015201620172018Registered FDI by sector(US$bn)ManufacturingReal EstateWholesale&retail tradeITUtilitiesOther0.05.010.015.020.025.030.035.040.02012201320142015201620172018Registered FDI by country(US$bn)JapanKoreaSingaporeHongkongChinaOtherSource:Vietnam Ministry of Planning and InvestmentSource:Vietnam Ministry of Planning and InvestmentVietnam has received US$101bn(7%of GDP)of FDI since 2012 21 March 2019Vietnam and the tech supply chain6Figure 9:FDI as%of GDP is the regions highest Figure 10:helping exports to continue outperforming the region6.4%3.2%3.0%2.1%2.0%1.6%1.4%1.1%0.6%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%VNPHMYIDTHINCNKRTWFDI as%of GDP34.2%18.2%15.3%13.8%7.9%9.0%21.8%18.7%3.3%4.6%4.0%-6.2%-6.2%10.6%9.1%-12.0%-6.0%0.0%6.0%12.0%18.0%24.0%30.0%36.0%2011201220132014201520162017Exports GrowthVietnamNJA WeightedSource:CEIC,Credit Suisse estimates(2017)Source:CEIC,Credit Suisse estimates Figure 11:Vietnams exports by products2018Handset and components20%Computers and electronic goods12%Clothing12%Shoes7%Mechanical equipment7%Others42%Source:GSOA fast developing industrial market The industrial market in Vietnam has developed considerably in recent years with favourable locations near major transport hubs.According to JLL Research,the industrial landbank has grown exponentially from just 335 ha 30 years ago to more than 83,000 ha of landbank at present,with average occupancy of 73%.Given the rising FDI demand and potential positive effects of a structural manufacturing shift from China,approximately 30,000-35,000 ha of new supply is expected to be added across the country over the next three years(CBRE).Vietnams industrial landbank is 83,000 ha,with 35,000 ha of new supply by 202121 March 2019Vietnam and the tech supply chain7Figure 12:More than 83k ha of industrial landbank at presentFigure 13:growing strongly over the pas