Company Report

We are establishing a new target price on the shares of PVD at VND 28,700/share (~20% upside) [previous target VND 32,000/share] and are reiterating our OUTPERFORM rating. Most recent result were impressive, as 3Q24 revenue and NPATMI grew 77% and 21%, respectively, as all segments posted strong results.  PVD recently announced an investment in a new jack-up rig, which is expected to become operational at the end of 2025. We also anticipate 25% YoY NPATMI growth of 4Q 2024 as well as a potential one-off gain over the near-term associated with PVD’s potential rig/asset divestiture to act as share price catalyst. We believe that the recent share price correction presents an excellent opportunity to accumulate the shares.

Revenue increased to VND 10.5 tn (26% YoY), while PBT jumped to VND 197 bn (146x YoY). Notably, FPT Shop earnings revert back to profitability in the quarter (PBT of VND 40 bn in 3Q24) after 6 consecutive quarters incurring losses. Meanwhile, Long Chau continued to post solid earnings, despite aggressive new openings of both drugstores and vaccine centers.

2024-2025 is and will likely end up being the early phase of a new earnings cycle, wherein FPT Shop earnings will revert back to profitability after a prolonged period of destocking and cost optimization, while the Long Chau  will continue to achieve strong performance from scaling up its store network and profit margin expansion. Given 3Q24 earnings growth momentum, we revise 2024-2025 net income to VND 392 bn (vs a loss of VND 329 in 2023, from VND 360 bn) and VND 529 bn (+35% YoY, from VND 511 bn). Long Chau pharmacy network expansion (from 1849 stores as of 3Q24 to over 3,000 in 2-3 years) and profitability improvement (from 1.9% in Q1-Q3 ‘24 to >3% when stores reach optimum level) should be the main growth driver for FRT over the long term. The Long Chau vaccine business should further aid growth, though its contribution in Long Chau is quite small (4%-9% of Long Chau 2024-2025 revenue). Given the promising earnings outlook, we call for an OUTPERFORM rating on FRT, with a target price of VND 215,000 (18% upside).

HSG recorded a net loss of VND 186 bn in 4QFY24, a contrast to the positive profit of VND 438 bn in 4QFY23 and VND 273 bn in 3QFY24, and lower than our estimate due to the decline in steel price and the depreciation that affected the export price. The steel sales volume of the company increased strongly by 27.9% YoY to 499k tons in the recent quarter, albeit falling by 3.1% QoQ due to seasonal factor. Cumulatively, HSG attained a net profit of VND 510 bn for the whole of FY2024, an increase by 17x off the low base in the previous year.

For FY2025, we expect the net profit to increase by 37% YoY to VND 699 bn thanks to a slight increase by 2% YoY in sales volume, and the improvement in gross margin due to a more stable steel price and the increase in proportion from domestic channel that usually carries a higher margin.

Despite the strong earnings growth potential in 2025, the 2025F PE and EV/EBITDA forwards are still demanding at 16.7x and 7.1x respectively. As a result, we maintain our current MARKET PERFORM rating for the stock with 1 -year target price of VND 20,000/share based on target PE and EV/EBITDA of 14x and 7.5x respectively.

Looking forward into 2025, PNJ market share gain trend will still continue, helping retail sales of PNJ to increase by 14% YoY in 2025. The gold shortage issue might still linger in 2025, though it might not be as severe as in 2024. With a narrower price gap between international and domestic gold price, there will be  less incentives for unauthorized purchase gold from overseas to resell on domestic market, hence reducing the need for control over gold origin and easing the gold shortage might ease in 2025. We hence expect the blended gross profit margin of PNJ to improve in 2025 due to more retail revenue in the sales mix, less severe gold shortage, and the absence of inventory write down. Net income is projected at VND 2.5 tn (18% YoY). With revised 2025 estimates, we derive a new target price for PNJ at VND 117,000 per share, with upside of 21%. As the stock recently pulled back on 3Q24 earnings weakness, we upgraded our rating from OUTPERFORM to BUY.

We upgrade our rating to BUY (from OUTPERFORM) for FPT, with a 12-month SOTP-based target price of VND 186,300/share (from VND 153,100/share) (with 34% upside potential).  We raise our 2025 NPATMI estimates by 6%, factoring in the performance outlook of the upcoming FPT AI Factory, which was launched in mid-November and is targeted to realize revenue from 2025. We also, lift the target P/E for the technology segment to 30x (from 23x) as we believe FPT will continue to increase its market share in overseas markets, promoting the continuing expansion of the technology segment sustaining promising earnings growth over the long-term. During 10M24, the company maintained strong growth in both revenue and PBT (~20% YoY growth for each, generally meeting our expectation). Currently, FPT trades at a 2025F P/E of 22.4x (our target P/E is 30x, with an implied PEG for 2025-2026F of ~1.1x), on the back of 27% YoY EPS growth (vs. global technology peer P/E of 19x, with 11% EPS growth), which we find attractive. For 2025-2026, we forecast a 23%-27% YoY EPS growth for FPT (vs. 11%-12% YoY growth of peers).

Nam Dinh Vu (phase 3) legal process is completed, and the project has started construction during 4Q 2024. Gemalink Phase 2 is awaiting for legal process and might complete in 1Q2025.

Trump 2.0 policies & potential impact: our view is that main impact will be volume growth of seaports, with a positive impact on the years discussing and applying tariffs (due to rushing the frontloading of cargo before the tariff date imposition), and a negative impact on the years thereafter (2017-2019 volume growth of the Hai Phong region: 9%, 7%, and 3.5% YoY), while price impact (revenue/TEU) is mainly due to the application of tariffs (-6.6% YoY during 2017, +4.4% YoY during 2018, and flat during 2019 based on ports in the Hai Phong region).

Reiterate MARKET PERFORM, with revised 1-year target price of VND 71,500/share (~11% upside), and some further correction would present a very good risk/reward ratio to start accumulating the shares. The stock remains our favorite pick for exposure into deep sea port and Vietnam trade growth story.

We have revised our 1-year target price to VND 44,000/share (down from VND 48,000/share) due to a 9% downward adjustment in 2024-2025 earnings projections. Despite this, we are upgrading our stock rating from Market Perform to Outperform. We believe the recent sharp correction in share price has already reflected the lower-than-expected earnings in 3Q24. Additionally, PLX's business results are expected to recover in the coming quarter, supported by a 6%-7% rebound in petroleum prices since early October. For 2025, we anticipate a 9.7% increase in PBT to VND 4.78 trillion, driven by a 4% growth in retail sales volume. Our forecast does not yet include the potential impact of the new Decree of Petroleum Business, as it has not been finalized.

We trim our 2024F net income to VND4tn (2,259% YoY, from VND4.3tn) due to the one-off expenses in 3Q24, and our 2025F net income to VND5.7tn (+44% YoY, from VND6tn) to reflect the slow consumption recovery and grocery store expansion into new provinces, which might weigh on profitability. The solid 2025F earnings growth is driven by continuous improvement in the ICT & CE and grocery segments, lower losses from the pharmacy business and the absence of one-off expenses. With revised financials and the inclusion of Erablue chain into the valuation, we derive a new SOTP-based 12-month target price for MWG of VND77,000 per share (from VND76,000), implying 28% upside potential. As the share price recently pulled back on seasonal earnings weakness amid heavy foreign selling pressure, we upgrade our rating for MWG to BUY (from OUTPERFORM). Longer term, the improvement in earnings of BHX would be the main growth driver from 2026, while earnings growth of the ICT & CE chains will likely normalize after strong growth in 2024-25. We estimate a 2026-28F net income CAGR of 15-20%.  

We reiterate our Outperform rating on the shares of MSN, with a new target price of VND 86,500/share (from VND 90,800/share) based on 2025F SOTP analysis, reflecting 20% upside from the current market price. As we roll our valuation basis to December 2025, we increase the conglomerate discount rate to reflect the uncertainty of the mining business and potential offload pressure on MSN shares from SK Group in the near future. Fundamentally, our 2024 NPATMI forecast remains almost unchanged at VND 1.9 tn as the better-than-expected results of MCH (consumer) and WCM (consumer retail) are offset by poorer-than-expected results at MSR (the mining business). 2025 NPATMI growth is forecast at 48%, fueled by continued profitability improvement at subsidiaries (WCM, MML and MSR).

We upgrade the shares of CTG to BUY (from Outperform) with a 1-year target price of VND 44,200/share (previously VND 38,500/share), implying upside of 26%. We expect that the bad debt clearance process is nearly complete, which would enable CTG to drastically reduce credit costs and optimize its lending structure over the medium term. Asset quality improvement, combined with the steady recovery of the economy, should be the perfect combination for improvement in CTG’s NIM and generate solid profit growth. ROE would appear set to accelerate and remain above 18%.

We lower our 1-year TP on the shares of HDG to VND 33,100/share (from VND 34,200/share) as we delay our earnings projections for Hado Charm Villas, Hado Minh Long and Hado Green Lane projects. With an 17% upside potential, we lower our rating from BUY to OUTPERFORM for the stock.

3Q24 results exceeded our expectations, as we witnessed stronger-than-expected hydropower recovery. We note that 3Q24 hydropower volume impressed with 32% YoY and 177% QoQ growth, while that of renewables (excl. hydropower) remained stable. We expect the transition from El Niño to La Niña or neutral weather pattern will continue to be supportive to the electricity segment in 2025.

With a 12-month target price of VND 12,600/share (representing 11% upside potential), we lower our rating from OUTPERFORM to MARKET PERFORM on the shares of POW as we are concerned about uncertainties related to the Nhon Trach 3&4 project. In fact, we expect the project to commence operation during 2025, and its significant depreciation and financing costs might place pressure on performance during early years of operation. Nevertheless, we might see the recovery from Nhon Trach 2 and Dakdrinh plants in 2025. On the other hand, we witnessed higher-than-expected 3Q24 earnings, mainly supported by higher-than-expected net FX income and lower-than-expected G&A. Hence, for 2025-2026, we forecast a 15%-16% YoY decline for core NPATMI (excluding the one-off income related to compensation for Vung Ang 1’s Generator 1 technical issues). In the long-term, a sufficient long-term Qc commitment with EVN for the Nhon Trach 3&4 project could be an impetus for earnings recovery. We believe that it is normal for a project to suffer poor performance during early operational years

We maintain our Market Perform rating on the shares of NLG, with a target price of VND 43,000 per share (reflecting a 11.4% upside). Despite the short-term underperformance due to market conditions and slower than expectation of new project’s sales, NLG is well-positioned to benefit from its land plots over the long-term, as land prices are anticipated to rise with the implementation of the new land law.

Like the first quarter of 2024, NLG reported net losses of -VND 40 bn during 3Q24, primarily due to low property deliveries. Additionally, presales values slowed to VND 845 bn, marking a -6% YoY decrease. Given these results, we do not expect NLG to meet their 2024 presale target of VND 9.55 tn and our previous presales forecast.  The real estate market in provinces near Ho Chi Minh City continued to be sluggish, prompting us to lower our forecast for NLG’s NPATMI -4% YoY during 2024.

TNH reported disappointing Q3 results, with weak revenue and net profit of VND 110 bn (-41% y/y) and VND 9 bn (-81% y/y), given the unexpected typhoon and severe flooding throughout September; slower hiring activity across nearby industrial zones, which constrained patient intake; and the lack of one-off real estate sales. We lower our 1-year target price of VND 23,000/share (from 25,100/share), and maintain MARKET PERFORM rating on the shares, reflecting an 11.1% upside.

For the longer-term, we anticipate improvement in TNH’s performance driven by new hospital openings. However, we are lowering both 2024 and 2025 forecasts due to: low results thus far, and a lower gross profit margin as the constructions for new hospitals are likely to exceed initial expectations.