Company Report

We upgrade our rating for VEA to BUY from Outperform; with 1-year target price of VND 48,000/share (previously 46,500/share) as we roll our valuation to end of 2025 and increase our forecast for 2025 NPAT slightly. The share price has also decreased recently, giving it an attractive 25.3% upside potential. VEA remains a strong defensive stock, as the business is somewhat insulated from potential global macroeconomic volatility. On the other hand, the better-than-expected recovery can provide future dividend upside:

• The ongoing recovery in domestic demand of Honda motorbikes and export figures are set to drive 2024 profit growth for VEA. Additionally, the Passenger Car (PC) market is sustaining its growth momentum through Q4, with VEAM companies outperforming the broader industry.
• Favorable factors in the short term include reduced registration taxes (until end of Nov 2024), low consumer loan rates, and dealer promotions are expected to further drive Q4 car sales.
• While we maintain our 2024 forecast of net revenue and consolidated NPAT, we increase our 2025 estimate for consolidated NPAT to 6.75 tn (+3% YoY), from 6.68 tn. While the earning growth is low single digit, VEA’s dividend yield for 2025 and 2026 are expected to be at 12-12.5%, one of the market’s the highest dividend yields.

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).

We reiterate our BUY rating on the shares of KDH, with a target price of VND 41,500 per share (+25.2% upside). The HCMC real estate market continues to exhibit signs of recovery, as primary condo sales have surpassed new supply and secondary condo prices continue to rise. Consequently, KDH stands to benefit from this recovery, with anticipated increases in real estate prices and new launches in HCMC.

During 3Q2024, KDH reported an NPATMI of VND 70.4 bn, driven by sales and deliveries of the remaining low-rise units in The Classia project. For 4Q24, we expect KDH to hand over approximately 75% of total condo units in The Privia project, for  revenue of VND 2.42 tn (+417% YoY) and an eyepopping NPATMI of VND 558.5 bn (+798% YoY). During 2025, KDH is projected to generate profit from two projects, Emeria and Claritia-HCMC, achieving NPATMI of VND 1.18 tn (+21.9% YoY).

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 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.

Slight recovery in 3Q24 net profit driven by sales volume recovery, lower input prices, and interest expenses. HT1 delivered an encouraging recovery during 3Q24 with net income posting at VND 23 bn compared to a loss of -VND 10 bn during. Cement sales volume in 3Q24 posted at 1.3 mn tons, recovering 8.5% YoY off the low base in 3Q23. Although the average sales price is estimated to drop over -4% due to strong competition and the company’s income coming through cheaper product lines, the gross margin rebounded slightly to 9.9% from 9% during 3Q23, largely due to the decline of over -10% for the coal input price. 

At the current price, HT1 is trading at 2025 PE and EV/EBITDA forwards of 36x and 6x respectively. We maintain our Market perform rating on the shares of HT1 with a 1-year target price of VND 12,000/share based on a target EV/EBITDA of 6.5x. Although we expect the company’s core business to have bottomed-out, we think the upside from the current price is limited in the short term as valuations are not attractive yet, and the intense domestic competition can still push some pressure on the volume growth and profit margin.

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 reiterate our OUTPERFORM rating on the shares of KBC, with a target price of VND 33,600 per share (+24.9% upside). Despite weaker results during the first three quarters of 2024 due to a shortage of industrial land for lease, we anticipate significant profit growth at KBC once key real estate projects receive legal approvals, which is expected anytime between now and the first half of 2025. During 3Q24, KBC reported revenue and NPAT of VND 950.4 bn (+284.5% YoY and 6.6% QoQ) and VND 201.5 bn (980% YoY & -26.1% QoQ), respectively, driven by the delivery of industrial park land in Nam Son Hap Linh IP and Quang Chau IP. For 4Q24, we expect KBC to lease industrial lands of total 21 ha in Nam Son Hap Linh IP, Quang Chau IP, and Tan Phu Trung IP. This should lead to revenue of VND 916.5 bn (+8% YoY) and NPAT of VND 301 bn (+129% YoY). KBC is projected to achieve FY2024 revenue and NPAT of VND 2.91 tn (-48.2% YoY) and VND 698 bn (- 69% YoY), respectively.

We reiterate our BUY rating on the shares of ACB, with a 1Y TP of VND 31,100/share - representing an upside of 27% plus a potential dividend yield of 4%. Solid asset quality combined with conservative lending distinguishes ACB from other private commercial banks, which should enable ACB to have its NPL peak earlier than peers and reduce provisions for the next several years. Profit growth likely will not be as strong in the near future, but a healthy ROE of more than 20% would appear sustainable.

For 2024, we lower our expectation for pretax profit to VND 21.1 tn (+5% YoY), equivalent to a -4.4% decline from our previous estimate, owing mostly to NIM compression. We believe that pricing competition will continue in the near-term with the gradual rise in deposit rates, putting pressure on NIM. As a result, we lowered the NIM forecast to 3.8% for 2024 (-11 bps from our previous estimate).

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.