Company Report

Net Revenue and NPAT Growth: The company targets a net revenue growth rate of -1% and a net profit after tax (NPAT) growth of +8% year-over-year (YoY) for 2025.

Margin Expansion and Management Optimism: Despite headwinds that pressure sector growth, SAB should see margin expansion in 2025. Management remains optimistic about long-term prospects.

Upgrade to OUTPERFORM from Market Perform: SAB’s current upside potential is 18% and dividend yield is approximately 10%.

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.

We maintain a MARKET PERFORM rating but lower our 12-month target price to VND 12,200/share (from VND 12,600) on the shares of POW (representing 1% upside), as we revise down our 2025-2026 core NPATMI estimates by 45%-47%, mainly due to 1) 2024 lower-than-expected results and 2) our projection delay of Nhon Trach 3& 4 project that indicates a higher pressure for the 2026 earnings outlook. Meanwhile, we remain nearly unchanged for the long-term earnings outlook.

2025 outlook: We remain cautious over the operational performance during the early years of the Nhon Trach 3&4 project launch due to depreciation and financing costs, as a sufficient long-term contracted volume (Qc) has not been approved. Relevant to 2025 financial projections, last year POW had fully realized ~VND 1 tn of the compensation related to Vung Ang 1’s Generator 1 technical issues, which is not likely to repeat this year. Hence, we project a 48% YoY NPATMI decline for the year - equivalent to a 26% YoY decline for core NPATMI (excluding the 4Q24 other income that is related to the above one-off compensation) - despite the recoveries at Nhon Trach 2 (from 2024 low base) and Dakdrinh (benefiting from La Niña or a neutral weather pattern) plants, and the profit from the newly acquired Nam Non hydropower plant.

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.

Our 12-month target price on the shares of REE is VND 80,000/share (representing an 9% upside), with a MARKET PERFORM rating. We note that REE currently trades at 2025 P/E of nearly 14x (relatively higher than 5-year P/E average of 11x).

2024 earnings decline was primarily due to the El Niño weather pattern, which adversely affected REE’s hydropower portfolio, especially in H1. The water & environment and real estate segments also witnessed reduced profitability, mainly due to higher depreciation and financing costs. Nevertheless, we have begun to see a rebound from the M&E services and trading segment.

We forecast 2025 NPATMI to achieve VND 2.5 tn (+27% YoY), whilst the majority of NPATMI should be backed by the electricity segment, given the dominance of either the La Niña or neutral weather pattern (supporting the recovery outlook of hydropower volume). In fact, we project that this segment’s NPATMI will grow 35% YoY. On the other hand, we anticipate the other segments to benefit from further sales of Phase 1 of the Light Square project Phase 1, a higher occupancy rate from E.town 6 office building (E.town 6), and a recovery in the M&E services field.

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.

We reiterate our OUTPERFORM rating on the shares of HDG, along with our 1-year TP of VND 33,100/share (representing 19% upside).

2024 results trailed our forecast primarily due to higher-than-expected bad debt provision in 4Q24 related to receivables from the Hong Phong 4 solar farm. As expected, HDG did not launch the next sales phase of Hado Charm Villas project during the year. The electricity segment continued to be the dominant segment in terms of both revenue and earnings.

Outlook: We expect 2025 NPATMI growth of 43% YoY, primarily driven by the real estate and electricity segments. Specifically, we expect the next sales phase(s) of Hado Charm Villas for 2025 to support 69% YoY revenue growth for the real estate segment, along with the continuing recovery of the hydropower portfolio. Meanwhile, we remain concerned about the legal risk related to Hong Phong 4 solar farm (we apply a -10% discount on our valuation for HDG). Over the longer-term, we forecast that the Hado Green Lane and Hado Minh Long projects will realize revenue between 2027-2030.

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.

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.

We upgrade our rating for VNM from MARKET PERFORM to OUTPERFORM as we believe the share price is oversold and now presents an 18.6% potential upside to our DCF-based 12-month TP of VND71,500/share (from TP of VND75,000/share as we lower our 2025E forecast due to a more cautious view on recovery).

Total sales for 4Q were lower due to domestic market pullback. VNM posted 4Q24 net consolidated revenue and NPAT of VND15.47tn (-1% YoY) and VN2.15tn (-9% YoY), respectively, missing our NPAT estimate of VND2.29tn. 

Higher ingredient prices pressure profitability. 4Q24 NPAT saw a decline of 9% YoY, a result of both lower sales and GPM (GPM saw a 112bp decrease YoY to 40.1%). For 2024, VNM post net consolidated revenue and NPAT of VND 61.8 tn (2.3% YoY) and VND9.45tn (4.8% YoY), respectively, trailing our FY24 NPAT estimate of -2.6%, and barely achieving the company’s annual NPAT target.

We raise our rating on KBC from OUTPERFORM to BUY, setting a target price of VND 37,500 per share (30.2% upside). Our upgrade is based on: Anticipated successful sales launches and recognition of TD3 IP and Trang Cat Township, which have recently been granted investment approvals in principle and should drive earnings growth over the medium-term. Expected strong sales at current industrial parks, including Nam Son Hap Linh IP, following disappointing 2024 results.Strong growth of 2025 NPATMI is expected to reach VND 2.18 tn (411.1% YoY) and the highest earnings level since company inception.

2024 results: KBC reported net sales of VND 2.77 tn (-50.6% YoY) and NPATMI of VND 426.1 bn (-79.0% YoY), falling short of expectations due to lower industrial land leases. KBC recorded the sale of only 33 ha of industrial land, compared to the estimated 50 ha, with limited cleared land available for sale.