Company Report

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.

We are upgrading our stock rating from OUTPERFORM to BUY due to our strong belief that the potential introduction of new U.S. import tariffs by President Trump could lead to a significant surge in import demand before the tariffs take effect. This anticipated increase in demand is likely to extend the upcycle of the container shipping industry into 2026, rather than peaking in 2025 as previously expected. As a result, we expect this change to positively impact the earnings of container shipping companies in 2025.

Accordingly, for 2025, HAH’s NPATMI are projected to grow by 17% YoY, reaching VND 649 bn fueled by higher charter rates and increased spot rates driven by strong shipping demand. For 2026, assuming that container shipping rates reach peak within the year, a significant freight decline is expected, as a consequence of the new tariffs. This could lead to less favorable growth, with 2026 earnings projected to decrease by around 13% YoY.

We upgrade our rating on the shares of HPG from OUTPERFORM to BUY, with a 1-year TP of VND 31,700/share. Over the short-term, the recent recovery of steel prices, the increase in sales volume, and update on AD tariffs for imported HRC should be supportive to the share price.

Revenue and net profit in 3Q24 came in at VND 34 tn and VND 3.02 tn, respectively, achieving strong growth of 19% and 51% YoY. This was driven by strong growth in long steel sales volume of 39% YoY, as well as through a substantial increase in earnings from agriculture and real estate of 206% YoY to VND 583 bn, which equated to 19.3% of total earnings during the quarter. On the other hand, HRC volume was resilient with a slight increase of 4% YoY, despite strong competition from China and a slowdown of exports.

We forecast EPS for 2024 and 2025 at VND 1,840/share (+46.9% YoY) and VND 2,313/share (+25.7% YoY), respectively. SZC is well-positioned to capitalize on several factors: (1) The company has over 400 ha remaining available for lease, with 250 ha fully cleared for compensation; (2) Lease prices in SZC are projected to increase compared to other industrial parks in Ba Ria - Vung Tau. Currently, these other IPs are leased at 13% - 15% lower. The connectivity improvements provided by the Bien Hoa-Vung Tau Expressway further enhance SZC's appeal. We maintain OUTPERFORM rating with 1-year target price of VND 43,200/share, representing a 12.9% upside based on the SOTP valuation method.

Although VHC earnings began rebounding during 3Q24 after seven consecutive quarters of negative earnings growth, we are reducing our target P/E on the stock from 12x to 11x, as the ASP recovery has been slower than expected. While we expected a stronger recovery in ASP leading to margin expansion, the improvement in GPM this quarter primarily came from lower input costs. We believe segment share prices remain very sensitive to pangasius ASP. Despite the multiple reduction, we reiterate our OUTPERFORM rating on the shares, with a 1Y target price of VND 83,000/share (+15.4% upside) [previous target of VND 88,000/share]. Our estimates for 2024 and 2025 remain unchanged, as gross profit margin expansion remains on track. Sales for 2024 and 2025 are expected to reach VND 12 tn (+20% YoY) and VND 13.7 tn (+13% YoY), respectively, whereas NPATMI is expected to reach VND 1.2 tn (+34% YoY) and VND 1.58 tn (+29% YoY).

We maintain our PBT projection of VND 27.8 tn (+21.5% YoY) for 2024 and VND 32.3 tn (+16.2% YoY) for 2025. We believe that the pricing competition as well as the impact from the flexible pricing scheme for corporate clients will continue to impede NIM expansion despite credit growth remaining solid. As such, NIM is expected to reach 4.18% in 2024 before improving slightly to 4.22% in 2025. With that support, asset quality should be under control with NPL ratios at 1.2% for 2024 and 2025.

We believe that the property market is gradually recovering, starting from the Northern Vietnam, and focusing on project with healthy legal status, which will be a positive catalyst for TCB. However, we think that the high-end and luxury property segments will need more time to fully recover. Although the cash flow of property developers is still slow, we think the flexible pricing scheme will continue to support these clients fulfilling debt obligations. Therefore, we maintain OUTPERFORM rating and keep target P/B of 1.2x for TCB shares with 1Y TP of VND 28,700 – equivalent to an upside of 18.6%.

We lower our estimate of 2024 new BTS sites from 4,500 to 3,500 sites as 1) 8M24 respective progress (2,011 sites) is trailing our previous forecast (as well as CTR’s own 2024 target of 4,000-5,000 sites) and 2) the company’s focus on dealing with the aftermath of Typhoon Yagi in northern Vietnam during September might weigh on its further acceleration of BTS site construction in the remainder of the year. On the other hand, we maintain our respective estimate (4,500 BTS sites) for 2025 as we believe that the 1-month extension of deadline for discounting 2G-only service (through the Circular 10/2024/TT-BTTTT) will not create significant delay to the implementation of more advanced mobile technologies in Vietnam. We also maintain our view of 5G commencement during late 2024 or early 2025 to support the long-term growth potential. Hence, we forecast that NPATMI will experience a single-digit growth for 2024 (+7% YoY) but a double-digit growth (+18% YoY) for 2025, mainly be driven by the infrastructure leasing and construction segments (equivalent to 3%-4% lower 2024-2025 NPATMI estimates compared to previous projections).Despite earnings downward revision, we maintain our 12-month DCF target price of VND 135,000/share as we roll over to 2025 (from average 2024-2025). With 3% upside potential, we lower our rating from OUTPERFORM to MARKET PERFORM on the shares of CTR.

DBC should benefit from higher hog price. As 2H is usually high season and a consumption recovery is expected, we believe that the price may not dip to last year’s level of between VND 52,000-56,000/kg.

Farming business witnessed low feed costs and higher sow productivity (from the import of new pig breeds from France). Average production costs at DBC are c. VND 50,000 /kg (down from VND 55,000/kg in 2022), with new farms in Thanh Hoa province achieving as low as VND 48,000/kg, according to management.

With assumptions of continued favorable pork prices through year-end and low production costs, we expect that 2024 revenue and net profit will be VND 11.7 tn (+6% y/y) and VND 472 bn (+1,789% y/y), respectively. While DBC has improved protection against ASF, we are more conservative than management given the unpredictability of disease post-typhoon. For 2025, we forecast revenue and net profit of VND 12.9 tn (+10% y/y) and VND 721 bn (+53% y/y), given the continued expansion of 3F’s operations and a GPM increase due to higher productivity breeds.