Company Report

We reiterate our BUY rating on the shares of CTG with a higher 1Y TP of VND 49,100/share (from VND 44,200/share), representing 15.8% upside. Given the VND 85 tn in aggregate bad debt written off since 2019, we believe that the bad debt clearance process has been largely completed during 2024. As such, CTG should be able to reduce credit costs during 2025 and optimize its lending structure over the medium-term. Fundamental improvements should enable ROE to exceed 19%.

For 2025, we estimate pretax profit of VND 40 tn (+26% YoY), fueled by a provision reduction (-12.7% YoY to VND 24 tn) and NII improvement (+15% YoY). Non-NII grows 6.3% YoY, as we anticipate better writeback income of VND 9 tn for 2025. Credit growth is expected at 17.5% YTD to VND 2.03 qn, with a focus on big projects and the FDI zone while supporting the retail and SME sectors. We expect CTG will maintain a healthy interest rate structure despite deposit rates inching higher during 2H25, hence, NIM likely will decrease slightly to 2.84% (-4bps YoY) during 2025. Asset quality continues to strengthen, with NPLs declining to 1.15% of total loans and credit costs lingering around 1.2%. Loss coverage ratio should improve to 179%. CIR is expected to rise to 30.7% during 2025 (up from 27.5% during 2024) as CTG continues its investment in digitalization.

Market share gains to offset tepid consumption recovery at ICT & CE in both 2024 and 2025.

Accelerated grocery store openings to secure long-term growth.

Both the Erablue and Avakids chains turned profitable (from 3Q24 and September 2024), while the An Khang pharmacy chain is expected to reach breakeven point during 2Q25.

Investment view: We reiterate our BUY recommendation but lower our SOTP-based Target Price to VND 73,000 (from VND 77,000) to reflect: (1) slower-than-expected consumption recovery; and (2) faster-than-expected new openings within the grocery chain, which should negatively impact on the profit margin over the short-term.

We have witnessed encouraging quarterly results and the prospect of an improved economy reinforces our confidence in SAB’s growth going forward. However, we remain cautious regarding potential headwinds, including regulatory challenges, intensified competition, and the risk of further increases in aluminum prices. As a result, we lower our forecasts for 2025E net sales and NPATMI to VND 33.3 tn (+4.4% YoY) and VND 4.6 tn (+6.2% YoY), respectively. Our earnings forecast for 2025 is 7% lower than our previous forecast, as we lower the GPM forecast from 31% to 30.2% and increase the A&P-to-sales margin from 12% to 12.7% to match 2024 spending levels.

We continue to rate the shares of SAB as MARKET PERFORM, given the challenging outlook. Our 12-month target price for SAB is lowered to VND 58,000/share (from VND 64,500/share), indicating an 11% potential upside.

• Market share gain to offset tepid consumption recovery for ICT & CE
• Accelerated grocery new openings to secure long term growth
• Both the Erablue and Avakids chains turned profitable (as of 3Q24 and September 2024 respectively), while the An Khang pharmacy chain is expected to reach breakeven in 2Q25.

Investment view: The management has set a 2025 revenue target of VND 150 tn (+12% YoY) and net income at VND 4.85 tn (30% YoY), which implies stable earnings for ICT & CE segment, consistent with the gradual recovery in consumption spending. Despite the slow pace of consumption recovery, MWG’s robust business model across major segments and the anticipated mobile phone replacement cycle are expected to drive significant earnings growth in 2025.  However, we may need to revise our 2025 earnings estimates on weaker consumption growth, and detailed projections and valuation will be provided in our fortcoming report. 

We lower our rating to Outperform from Buy for TCB, with 1Y TP of VND 29,200/share - representing an upside of 13% as the shares increasing 8.7% from our last report. We still expect property revival during 2025, with numerous projects up for sale. This should be a positive catalyst for TCB. Given the brighter fundamentals from 2025, TCB valuation is attractive with a forward P/B of 1.07x, which is well below its historic average of 1.4x.  

We project 2025 pretax profit to expand to VND 33.5 tn (+21.8% YoY vs. our previous forecasts of 15.2% YoY), driven by better non-NII (+16.8% YoY) and lighter credit costs (0.55%, -16 bps YoY). We believe that the property recovery will be the main driver to achieve credit growth of 21.8% YTD with the focus on mortgage lending. With several supporting mechanisms including the flexible pricing scheme, bullet payments, and incentive lending rates, we believe that asset quality should be well managed and gradually improve along with the revival of property market. The NPL ratio is projected to be 1.05% in 2025. However, the NIM us expected to be under pressure at 4.2% (-3 bps YoY), due to the intense competition and rising funding costs.

Maintain BUY. Fine-tuning 2025 estimates and target price to VND 33,500/share (from VND 31,700/share), based on unchanged P/E and EV/EBITDA targets of 15x and 8x respectively. Dung Quat 2 being put into operation and announcement on prelim AD duty for imported HRC from China and India are 2 key catalysts for the share price.

2025 outlook is positive for both the sector and HPG,  with revenue and NPAT growth of 15.9% YoY and  28% YoY respectively, thanks to: public investment strongly pushed and the recovery of the real estate market, with higher steel volumes from Dung Quat 2 – Phase 1 operation from 1Q 2025 and base-case assumption for HRC AD duty to be applied for China HRC imports.

We see minimal to slightly positive impact for HPG from Trump’s recent tariff on steel imports. The recent proclamation to raise US import tax for steel to 25% by Trump does not impact Vietnam steel directly, as Vietnam steel exports to the US have already been taxed at 25% since 2018, and the recent action of Trump would put Vietnam steel exports to the US on a relatively more equal footing compared to other countries.

We lower our rating to OUTPERFORM (from BUY) on the shares of FPT, with a 12-month target price of VND 176,400/share (from VND 186,300/share) (representing 23% upside), as we revise down our 2025 NPATMI estimate by 5%. In fact, based on the current implementation progress of FPT AI Factory project and the weak enrollment situation of FPT Education, we believe that 2025 revenue from FPT AI Factory and the education segment may not meet our previous expectations. Nevertheless, we still project double-digit growth for FPT during 2025 (19% YoY for revenue and 22% YoY for NPATMI), whereby the technology segment will continue to be the primary growth driver.

Upside potential: Higher-than-expected revenue growth from the Americas; faster-than-expected economic recovery to support domestic IT, and online advertising segments.

Downside risks: Higher IT engineer salaries, lower-than-expected revenue/contract value from software and IT services, and slower-than-expected implementation progress at FPT AI Factory.

On February 11th, 2025, KDH hosted its 4Q24 earnings call to update on quarterly performance and project progress. We maintain our BUY rating for KDH, with a target price of VND 41,500 per share, representing a 22% upside.

Looking ahead to 2025, we expect the recognition of the remaining sold units at The Privia and income from upcoming sales phases of the low-rise section of the joint venture project with Keppel (11.8 ha in the suburb of Thu Duc located right next to HCMC, with KDH owning 51%) to be the main drivers for our 2025 forecast.  As a result, KDH is expected to achieve 2025 net revenue of VND 6.28 tn (+91.6% YoY) and NPATMI of VND 1.18 tn (+46.1% YoY).During the earnings call, KDH management expressed optimism about the real estate market’s development, noting that many developers are preparing to launch new projects in line with new land-related laws, which should enhance market transparency and growth.

MSB reported 4Q24 pretax profit of VND 2 tn (230% YoY, or 65% QoQ), reflecting the low base in 4Q23. Such solid profit growth was driven by strong recovery in NII (31.7% YoY), better NFI (11.4% YoY), trading income improvement in both forex (5x times YoY) and securities (81% QoQ), greater effort in collecting bad debt written-off (400% YoY, or 324% QoQ) and lighter credit provision (-35% QoQ). In general, MSB accomplished 2024 earnings guidance at VND 6.9 tn, beating our projection of VND 6.2 tn.

We currently hold an OUTPERFORM rating for MSB shares with 1Y TP of VND 14,500. MSB is trading at trailing P/B of 0.79x, significantly lower than the historic average of 1.17x since 2020.

HAH achieved its highest quarterly earnings ever. No doubt impressive, this also aligns with our expectation of a robust year, justifying our Buy recommendation. In Q4, NPATMI surpassed historically high quarters during 2021-2022, and exceeded 20% of our estimates for this quarter. HAH reported Q4 sales and NPATMI at VND 1.21 trillion (82% YoY and 7% QoQ) and VND 280 billion (340% YoY and 40.6% QoQ). The earnings followed a QoQ improving trend throughout the year, with preliminary 2024 NPATMI increasing by 70% YoY to reach VND 650 billion. This led to the valuation of HAH being adjusted to a more appropriate level, with the stock trading at a TTM P/E of 10.x and a TTM EV/EBITDA of 4.x.

Although international spot rates have been adjusting as geopolitical tensions ease mixing with freight rallies due to frontloading events, the impact on HAH's earnings is delayed. The charter segment, the primary driver of HAH earnings, has locked in charter rates around Q2. The rate in Q4 2024 doubled, equating a tripling of rates charged during Q4 2023, which should be a strong factor leading to this surge. Meanwhile, the YoY comparable charter rate hit a trough point, with vessels even generating accounting losses in Q4 2023. The domestic market rebound has witnessed a pickup in shipping demand, although it shouldn’t make much a dent due to being characteristic of low yield, despite its high weight in sales.

HDB reported 4Q24 pretax profit of roughly VND 4.1 tn (-7% YoY, or -9% QoQ), mainly due to larger operating expenses (+35% YoY, or +20% QoQ) and a higher provision burden (+47.4% YoY, or +67.5% QoQ). However, NIM improvement (+7 bps QoQ) and better non-NII (+58.6% YoY, or +63.5% QoQ) became a spotlight in 4Q24 business results. In general, HDB achieved 2024 PBT of VND 16.7 tn, beating earnings guidance and in line with our projection.

For HD Saison, 4Q24 pretax profits rose to VND 353.5 bn (+37% YoY), thanks to stable NIM at 30.6%. The NPL ratio improved slightly to 7.39% in 4Q24 given the decent credit growth of 13.2% YTD (or +5.5% QoQ) to VND 18.2 tn.

We currently hold an OUTPERFORM rating for HDB shares with 1Y TP of VND 28,200. HDB is trading at trailing P/B of 1.45x, below the historical P/B of 1.67x since January 2018.

MBB recorded a rise in 4Q24 pretax profit of roughly VND 8.1 tn (+28.5% YoY, or +10.5% QoQ), mainly thanks to an improvement in NII (+21.6% YoY, or +7% QoQ), securities trading income (47x times QoQ), and write-back income (+33.6% QoQ). In general, MBB surpassed company earnings guidance and our estimates alike, with a 2024 PBT improvement to VND 28.8 tn (+9.5% YoY).

We currently hold an OUTPERFORM rating for MBB, with a 1Y TP of VND 25,200. MBB is trading at trailing P/B of 1.06x, below the historical average of 1.4x.

Improving sales, thanks to the advertising & promotions (A&P) campaign in anticipation of the Tet holiday. SAB posted an improvement in 4Q24 net revenue and NPAT of VND 8.93 tn (5% y/y) and 991 bn (3% y/y), trailing our expectation of 1.26tn VND. Net sales was higher, thanks to more aggressive A&P spend (A&P accounting for 16% of net sales compared to 15.7% during 4Q23).

Net margin hurt as COGS rises, partially offset by increase in associate income. GPM of beer category decreased for the 2^nd consecutive quarter, to 31.8% compared to 33.8% during 2Q24, due to higher cost of raw materials. Profit from associates nearly tripled to 130 bn VND, but was offset by increase in SG&A. Overall, while net profit increased 3%, net margin saw a decrease of 20 bps y/y, 400 bps q/q.

Missed full year NPAT target amidst challenging background. For FY24, SAB posted an expansion in net revenue and NPAT of 32.2 tn (5% y/y) and 4.49 tn VND (6% y/y), despite the zero-tolerance alcohol ordinance in place, fierce competition, and weak demand. This result even trailed both the company’s and our NPAT expectations by -7%. Lower interest income and lower profit from associates also hurt the parent company’s profit during 2024, offset by lower A&P spend during 1H24. Overall, SAB recorded a NPAT increase of 6% y/y, and a slight NPM increase from 14 to 14.1%.

We currently hold a MARKET PERFORM rating for SAB, with 1Y TP of 64,500/share. We will follow up with a full report after SAB's analyst meeting on Feb 13^th.

In 4Q24, FRT witnessed expansion through net sales of VND 11.4 tn (32% YoY) and PBT of VND 169 bn, bouncing back from a loss of VND 97 bn in 4Q23, thanks to improved performance of both FPT Shop and Long Chau chains.

Investment view: Revenue and PBT for FY2024 increased to VND 40.1 tn (26% YoY) and VND 527 bn (vs. a loss of VND 294 bn in 2023). Such result was better than our full year PBT estimate of VND 492 bn. Our latest recommendations for FRT was OUTPERFORM. With better than expected 4Q24 results, we see upside to our 2025 earnings estimate, and will update our valuation in a more comprehensive report.