Company Report

We upgrade PVD to OUTPERFORM with a revised 1Y target price of VND22,300/share. The upgrade reflects improving long-term industry prospects, while the recent earnings weakness has brought valuation back to attractive levels. At the current share price, PVD trades at 16.6x/11.4x 2026–27F P/E, respectively.

Investment thesis

•           Favorable industry outlook, with potential for a prolonged upcycle as uncertainty over Middle East supply supports more sustained upstream development.

•           46% YoY earnings growth expected in 2027, driven by the addition of two new jack-up rigs and higher day rates.

•           More aggressive fleet expansion, with management planning to add three rigs over the next five years.

A re-rating needs clearer evidence of volume stabilization and earnings growth, which the 2Q print hasn’t delivered. While we note SAB’s efforts in R&D and sales channel diversification, contribution from these improvements remains small at the moment and may not bring material change to business results in the near term.

Margins should plateau absent further price increases. GPM rose to 38.7% on two 1H price hikes (management plans no more in FY26) and a low-cost malt/aluminium inventory advantage, which we view as not durable.

Inexpensive, but fairly valued given the headwinds. 12.3x 2026F P/E sits well below its 5-year historical average (20x), but the current valuation already reflects key headwinds, including higher SCT and weak consumption. We derive our Target Price based on 2026F EPS of VND 3,668 and a target P/E of 14x (previously 15x). We view the 9% dividend yield as the key near-term support for the shares.

Following the significant share price correction since our previous update, we upgrade our rating on REE to OUTPERFORM from MARKET PERFORM, with a revised 12-month target price of VND56,200/share (from VND61,200 previously), implying 23% upside potential. The lower target price primarily reflects the roll-forward of our valuation horizon to mid-2027.

Investment thesis

•           Long-term growth potential in electricity: REE continues to expand its renewable energy portfolio, supporting the long-term growth prospects of its electricity segment.

•           Diversified earnings base provides resilience: While the electricity segment is likely to face near-term pressure, we expect sustained growth or stable performance in M&E services, office leasing, and water & environment to provide a meaningful earnings buffer.

We reiterate our MARKET PERFORM rating on CTR, with an unchanged 12-month target price of VND 85,700/share, implying 11% upside. Our earnings estimates for 2026 remain broadly unchanged.

Investment thesis

•           Infrastructure-driven positioning: As Vietnam’s leading TowerCo and a major provider of solar energy solutions and telecom construction services, CTR is well positioned to benefit from the country’s continued investment in telecom and power infrastructure. The company is also expanding into residential construction, renewable power projects and overseas markets, which should help diversify its revenue base and support longer-term growth.

•           Growth diversification: CTR’s 2026-2027 growth should become less reliant on infrastructure leasing and increasingly supported by its other business segments. Key growth drivers include 1) improving site-level efficiency across its BTS (base transceiver station) portfolio, 2) continued expansion across B2B, B2C and SME customers, and 3) further overseas expansion under its “Go Global” strategy.

We retain a constructive medium- and long-term view on KDH, supported by its reputable track record as a developer and sizable, legally clear landbank in HCMC. While core earnings remained weak in 1H26, we believe improving presales momentum provides better visibility on the recovery in project deliveries and earnings from 2027.

Stronger-than-expected take-up at Gladia Heights supports our 12% increase in FY26 presales forecast to VND7.2tn (+65% YoY) and provides better visibility on demand for KDH’s upcoming launches. We expect presales to remain resilient at VND7.2tn in FY27, supported by continued sales at Gladia by the Waters and the launch of Binh Trung Expansion. However, the pace of earnings recovery remains dependent on timely project launches, sales absorption and cash collection.

KDH is currently trading at a trailing P/B of 1.1x, representing a c.50% discount to its five-year average of 2.2x. While the discount partly reflects weaker core earnings and higher leverage, we see scope for a re-rating as Gladia sales momentum improves and the earnings recovery becomes more visible.

Grocery is emerging as a key earnings driver. We expect the grocery business to sustain its improvement, supported by regulatory tailwinds including tighter tax enforcement on household businesses, the closure of unregulated wet markets in Hanoi and Ho Chi Minh City, and stricter food-traceability requirements. Continued store expansion and deeper penetration into northern markets should provide additional growth opportunities.

ICT & CE growth should normalize, but remain healthy. We expect growth to moderate from the exceptionally strong 1H26 level, although competitive financing programs should continue to support customer acquisition and market-share gains. We therefore see normalization rather than a sharp downturn in the segment.

Strong cash position provides an additional earnings tailwind. MWG’s substantial cash balance should continue to generate higher financial income, providing some offset to the normalization of core retail growth in the current high-interest-rate environment.

NIM recovery is gaining traction. NIM increased by c.20bps QoQ to 2.1% in 2Q26 as loan yields repriced higher, while the loan-tenor mix remained broadly unchanged. With only around one-third of BID’s mortgage book currently repriced to floating rates, we expect the margin recovery to continue into 2027. We forecast PBT growth of 9.4% in 2026F and 11.8% in 2027F, with ROE at around 15%.

Strong funding franchise and infrastructure exposure. BID has the largest deposit base in the banking system, supported by a sizeable State Treasury deposit base and improving CASA. The bank also remains a key financier of public investment and infrastructure projects. The capital raise completed in early 2026 should support CAR at around 10%, providing a more stable foundation for medium-term balance-sheet growth.

Valuation has become more reasonable. BID’s share price has corrected by around 30% from its early-2026 peak, bringing valuation down to 1.4x FY26F P/B and 1.2x FY27F P/B, based on our estimated ROE of around 15%. We believe this provides a more balanced risk/reward profile, although the stock is not yet deeply discounted.

Multiple drivers supporting market share gains. VNM’s broader and increasingly premium product portfolio, improving channel mix toward modern trade and D2C, and rapidly expanding export business should support further market share gains. We forecast FY26F NPAT of VND10.5tn (+12% YoY), significantly above management’s 3–4% target.

Growth momentum likely to moderate in 2H26. Gross margin has recovered to 43.5%, from the 38.8% trough in 2022–23, supported by favorable pricing of locked-in imported WMP/SMP and sugar, as well as a better product mix. However, with input costs rising, management expects 2H26 gross margin to remain broadly flat versus 1H26 and does not plan further selling-price increases. This should limit further earnings upside in 2H.

Valuation remains undemanding. We value VNM at a 15x target P/E applied to our FY26F EPS of VND4,469, implying a Target Price of VND67,000. This represents a modest premium to the current trailing P/E of ~13x. The market continues to price VNM as a low- to no-growth stock, with its current FY26F P/E of ~14x still below its five-year historical average of ~18x.

We reiterate our MARKET PERFORM rating on the shares of GAS, with an unchanged 12-month target price of VND 86,000/share, based on an unchanged 16x P/E target and representing 3% upside potential. We roll our valuation horizon forward to 2027 to better reflect the medium-term outlook.

Investment thesis

•           Balanced sourcing strategy: The exploration of new gas fields and further LNG imports could enhance the proactiveness of domestic fuel sourcing while offsetting long-term depletion risks.

•           Higher natural gas gross profit margin should be a key factor for 2026-2027 earnings resilience.

DHC’s long-term relationships with large-scale customers, now strengthened by new additions such as PepsiCo, provide greater predictability and stability in order and demand flow and support a resilient pricing regime despite potential industry oversupply in 2027 as new high-capacity paper plants come online.

Sustained ASP recovery remains the primary driver: Paper prices (DHC 2Q26 average ~VND 10,400; +16% YoY) are now driven by improved market balance and China-led demand recovery, supporting margins preservation despite rising OCC and freight costs (2026F average +5% and 25% YoY, respectively).

Medium-term earnings step-up from higher-value product mix transition: Giao Long 3’s shift toward Kraftliner (25–30% mix) provide potential upgrades to DHC’s product profile, improving long-term earnings outlook. However, decent incremental performance will be required to justify for the higher depreciation and interest expenses.

Thermal power to offset weaker hydropower. Stable domestic natural gas supply, particularly in Southeast Vietnam, should support gas-fired power generation through 2026–2027. Together with coal-fired generation, higher thermal power utilization should offset weaker hydropower output amid less favorable hydrological conditions.

Nhon Trach 3&4 strengthens POW’s growth profile. As Vietnam’s first and currently only operating LNG-fired power project, Nhon Trach 3&4 represents a strategically important addition to the national power system and provides POW with a new source of growth as thermal power demand increases.

Resilience despite market headwinds. NLG remains relatively well positioned, supported by its net cash position, improving launch pipeline, and product exposure to the affordable and mid-end segments.

Presales remain healthy despite a high base. We forecast FY26 presales of VND 9,882bn (-17% YoY), reflecting normalization from the strong FY25 base but remaining well above 2022–23 levels.

Earnings recovery in 2H26. We forecast FY26 revenue of VND 4,907bn (-13% YoY) and NPAT-MI of VND 670bn (-4% YoY). Earnings should improve materially in 2H26, with NPAT-MI of VND 547bn, up 4x HoH and 11% YoY, driven by accelerated handovers at ongoing projects. Excluding 2025 non-recurring items, core profit is expected to grow 12% YoY.

Higher selling prices support margin resilience. BMP has increased PVC product selling prices by an average of 15% since early April 2026 in response to higher PVC resin costs. With Middle East tensions stabilizing and PVC resin prices normalizing toward pre-conflict levels, we expect the resulting price-cost spread to support GPM in the medium term, similar to the post-COVID period.

Infrastructure projects provide a new growth avenue. BMP’s increasing focus on large-scale infrastructure projects should support volume growth while improving economies of scale and lowering selling expenses, providing additional support to margins.

Strong and consistent shareholder returns. BMP maintains a high-payout policy, with a payout ratio of around 99%, translating into an average dividend yield—and effectively an earnings yield—of close to 10%.

Long-term hydropower resilience: Despite near-term weather-related weakness, hydropower should remain an important component of Vietnam’s power mix and national energy security, supporting the long-term resilience of HDG’s power portfolio.

Medium-term growth catalysts: Earnings growth should be supported by the monetization of remaining units at Hado Charm Villas and the expected launch of the La Trọng hydropower project.

Lower FX exposure: HDG’s FX risk has declined following the conversion of EUR-denominated debt at the 7A plant into VND-denominated debt.

Robust backlog supports volume growth. Large public and commercial housing projects from Vinhomes, Masterise and Hoang Huy Group should support resilient demand for construction materials. With construction activity continuing to expand, we expect NTP to maintain positive volume growth, supporting our forecast of more than 136,000 tonnes of sales in 2026 (+2% YoY).

Pricing power supports margins amid PVC volatility. As the leading pipe manufacturer in northern Vietnam, NTP has demonstrated the ability to adjust ASP when PVC resin prices increase. This provides a degree of natural margin protection and should allow gross and net profit margins to remain around their historical averages of 31% and 14%, respectively, under a normalized input-cost environment.

Strong balance sheet provides additional earnings support. NTP maintains a conservative capital structure with no long-term debt, supported by a sizeable cash and short-term investment position. With interest rates remaining relatively high, financial income from these liquid assets should provide an additional contribution to earnings.

Potential catalyst from State-capital restructuring. Decision 40/2026/QĐ-TTg, which establishes criteria for classifying enterprises for State-capital restructuring, could facilitate the divestment process involving SCIC’s stake in NTP. This could improve the company’s ownership structure and provide an additional valuation catalyst.