Company Report

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.

Maintain MARKET PERFORM rating, with revised 1Y target price of VND 18,000/share (from VND 20,000/share). We revise down our FY 2025 NPAT estimates to VND 604 bn (from VND 699 bn) to reflect tougher industry outlook and lower ASP assumption. We maintain our conservative view on HSG due to demanding multiples and weak sector outlook. The 2025F PE and EV/EBITDA remain quite rich at 18x and 7.2x, respectively.

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.

The Commonwealth Bank of Australia (CBA) has recently proposed to offer and reduce its stake in VIB. This follows CBA's successful divestment of a 15.35% stake in 2024. On March 5th, 130.9 million shares of VIB were transferred via throughput at a price of VND 21,100 per share, translating to a total transaction value of VND 2.76 tn (USD 108 mn).

With CBA no longer a strategic shareholder of VIB, we believe the bank will have greater opportunities to seek a new strategic partner through a private placement in the foreseeable future. This move would not only strengthen its capitalization but also provide valuable expertise and operational synergies, supporting its long-term business expansion and competitiveness in our view. The capital adequacy ratio (CAR) of VIB at the end of 2024 was 11.9%, reflecting the need for additional capital to support long-term future growth.

We currently hold Market Perform rating for VIB shares with 1Y TP of VND 21,100/share. VIB is trading at forward P/B of 1.26x as compared to the historic average of 1.8x since 2020.

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.

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.

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.

During the analyst meeting, the management reaffirmed PNJ’s ability to gain market share, though they still expressed concern over the gold shortage issue. This is in line with our recent view on PNJ that the gold shortage issue may still linger in 2025. The gold price has retreated recently after reaching an all-time high in early February. However, the price correction is quite negligible, and the gold flow on the market remains tight. As such, a change in Decree 24/2012/ND-CP (expected in September 2025) should be crucial to create conditions for jewelry and gold retailers to grow in the long term.

PNJ will publish a detailed 2025 financial plan in late March, along with AGM documents. We currently forecast an expanded net income for PNJ in 2025 to VND 2.5 trillion (+17% YoY) and maintain a BUY recommendation with a 1-year target price of VND 123,000 per share.

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.

4Q 2024 came out outstanding, with consolidated revenue of VND 1.4 trillion (36% YoY and 11.7% QoQ), pushing the top line to an all-time high. Core PBT (before other income/expenses) reached near a historically high level of VND 684 bn (boasting 137% YoY and 19% QoQ.) 

One-off expenses and earnings: GMD booked one-off income of VND 226 bn from reversal of THE payable provision, which is a normal operation according to management. It also booked a one-off in other income of VND 458 bn, which are provisions for a vessel incident as well as rubber plantation expenses, but the company does not provide a clear breakdown for each item(s).

2024 summary: GMD FY2024 revenue and PBT reached VND 4.8 trillion (25.6% YoY) and VND 2.1 trillion (-25% YoY), a bit lower than our PBT estimates of VND 2.2 trillion due to higher provision booking than expected. Income could be even greater in 2025 were this to be reversed.

On February 11th, 2025, KDH hosted its 4Q24 earnings call to update on quarterly performance and project progress. We maintain our BUY rating for KDH, with a target price of VND 41,500 per share, representing a 22% upside.

Looking ahead to 2025, we expect the recognition of the remaining sold units at The Privia and income from upcoming sales phases of the low-rise section of the joint venture project with Keppel (11.8 ha in the suburb of Thu Duc located right next to HCMC, with KDH owning 51%) to be the main drivers for our 2025 forecast.  As a result, KDH is expected to achieve 2025 net revenue of VND 6.28 tn (+91.6% YoY) and NPATMI of VND 1.18 tn (+46.1% YoY).During the earnings call, KDH management expressed optimism about the real estate market’s development, noting that many developers are preparing to launch new projects in line with new land-related laws, which should enhance market transparency and growth.