Company Report

AGM highlights: The company has set a conservative net income guidance of VND 3 trillion for 2025, which is flat year-over-year. This cautious outlook is attributed to a shortage of apatite ore and a longer-than-expected licensing process for expanding capacity at Mine Site 25. Consequently, we expect DGC to experience lower sales volumes of phosphoric acid.

2025 CAPEX Capital expenditures for 2025 will primarily focus on the construction of a Chlo-alkali plant in Nghi Son, which is anticipated to commence operations in Q2 2026. Once fully operational, this plant is projected to generate VND 2 trillion in revenue and VND 200 billion in net income annually, representing approximately 6% of the company's 2024 net income.

Impact of US reciprocal tariff: Exports to the US account for approximately 2% of DGC's total revenue and could be subject to a reciprocal tax of less than 46%, in addition to existing import duty. Given the relatively small contribution of the US market to DGC's overall revenue, the impact is expected to be marginal.

Earnings rebounded to positive growth in 4Q24, driven by the recovery in yellow phosphorus sellingprice. We anticipate that this earnings growth will continue into 2025, supported by favorable selling price, resilient sales volume growth across most product categories, and increased usage of in-house apatite ore. However, due to the current apatite ore shortage in Vietnam, DGC may experience lower sales volumes of phosphoric acid. As a result, we have revised our 2025 net income estimate to VND 3.5 trillion (a 14% year-over-year increase, down from our previous estimate of VND 4.3 trillion).

Short-term view: Short-term share price performance may face challenges due to significant selling pressure amid uncertainties surrounding the export outlook. However, this could present a strategic entry point for investors, as the company is projected to deliver robust earnings growth of 34% YoY in 2025 and decent longer term growth.

Long term view: Improvement in BHX earnings should be the main growth driver from 2026, while earnings growth of the ICT & CE chains will likely normalize after strong recovery during 2024. We estimate a 2026-2028F net income CAGR of between 15-20%.  

PNJ has released AGM documents, surprising us with decelerating earnings growth guidance for 2025 (VND 1.96 tn, -7% YoY). This likely reflects the continued challenges faced by jewelry retailers due to the gold material shortage, which has made it difficult to pass elevated gold material costs onto customers as those tend to favor gold bars/rings over gold jewelry in the rising gold price environment. Consequently, we trim our 2025 net income estimate to VND 2.24 tn (+6% YoY, from VND 2.5 tn). Our 2025 net income estimate is higher than PNJ guidance as we believe that the company has adopted too conservative a stance in target setting. Our new target price for the shares of PNJ is VND 97,500/share. With a 35% upside, we reiterate our BUY recommendation. PNJ may face gold material shortages and an indirect impact from the US tariff increase (up to 46%) in the short term. However, the stock's current valuation is very compelling, with a forecast 2025F P/E of 12x, which is significantly below the 16.5x average over the past three years.

• 2M25 results met expectations, mainly driven by IT and telecom segments.
• Continuing reluctance in IT spending in the US similar to last year weighed on the overall growth of the global IT field.
• Signed contract value/signed revenue is showing a slowing growth signal.

We maintain our OUTPERFORM rating on the shares of FPT, with a 12-month target price of VND 156,300 (from VND 176,400/share) (representing 22% upside).

2M25 results met our expectations, although revenue growth of the global IT field is slowing, as US businesses remain cautious on IT spending (vs. our previous assumption of an improvement in IT spending). While the FPT AI Factory project has not realized revenue, domestic IT revenue still managed to rise 10% YoY, reducing the loss vs. 2M24. The telecom segment performed well with double-digit growth in terms of both revenue and earnings, reflecting FPT’s effective sales efforts and internet service packages optimization.

2025 outlook for the whole sea port sector in terms of volume growth is positive mixed with the current uncertainties in the tariff imposition landscape. The company would seek growth by focusing on: improving revenue/TEU, seeking new services to improve port utilization rate, negotiating for higher pricing.

Divestment of non-core asset, especially from the rubber plantation, would be in focus this year and should provide upside risk for forecast and valuation.

Competition in the North would be higher this year with new supply, but the company would try to maintain and increase its market share by attracting new services. We expect some discount in pricing this year as market share is the priority.

We have revised our 2025 net income forecast to VND 610 bn (+49% YoY, from the previous VND 529 bn), driven by stronger-than-expected 4Q24 results. Consequently, we have raised our one-year target price for FRT shares to VND 220,000 (from VND 215,000), representing an 24% upside, and we maintain our OUTPERFORM rating. Long Chau pharmacy, which constitutes 89% of FRT's total valuation, continues to be the fastest-growing chain among listed retailers in Vietnam, benefiting from its competitive edge and the relatively low penetration of modern trade (less than 15% of the drug market). The anticipated capital raising at Long Chau could serve as a catalyst for the stock, alongside the positive earnings outlook.

FRT achieved net sales of VND 11.4 tn (32% YoY) and PBT of VND 169 bn, rebounding from a loss of -VND 97 bn for 4Q23 due to improved performance at both FPT Shop and Long Chau pharmacy chains. FPT Shop has been profitable for two consecutive quarters largely due to cost optimization and less intense competition from rival MWG. Meanwhile, pharmacy chain Long Chau continued to deliver upbeat results, driven by store network expansion and improved profitability with existing stores ramping up.

As PLX share price has increased 12% since our last report, we are lowering our rating on the shares of PLX from Outperform to Market Perform with 1-year target price of VND 45,000/share.

PBT for 4Q24 was VND 760 bn, improving 215% QoQ, but declining -11% YoY due to the increase in sales-related expenses. FY2024 PBT was VND 3.96 tn, exceeding guidance by 37% and remaining flattish versus 2023 despite the absence of one-off income from the divestment of PGB during 2023.

We expect that the company’s PBT will increase 14% YoY during 2025, driven by an  increase of 3% in petroleum sales, the implementation of cost-cutting measures, and the potential positive impact from the to be finalized new decree on petroleum businesses.

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.