Company Report

Revenue increased to VND 10.5 tn (26% YoY), while PBT jumped to VND 197 bn (146x YoY). Notably, FPT Shop earnings revert back to profitability in the quarter (PBT of VND 40 bn in 3Q24) after 6 consecutive quarters incurring losses. Meanwhile, Long Chau continued to post solid earnings, despite aggressive new openings of both drugstores and vaccine centers.

2024-2025 is and will likely end up being the early phase of a new earnings cycle, wherein FPT Shop earnings will revert back to profitability after a prolonged period of destocking and cost optimization, while the Long Chau  will continue to achieve strong performance from scaling up its store network and profit margin expansion. Given 3Q24 earnings growth momentum, we revise 2024-2025 net income to VND 392 bn (vs a loss of VND 329 in 2023, from VND 360 bn) and VND 529 bn (+35% YoY, from VND 511 bn). Long Chau pharmacy network expansion (from 1849 stores as of 3Q24 to over 3,000 in 2-3 years) and profitability improvement (from 1.9% in Q1-Q3 ‘24 to >3% when stores reach optimum level) should be the main growth driver for FRT over the long term. The Long Chau vaccine business should further aid growth, though its contribution in Long Chau is quite small (4%-9% of Long Chau 2024-2025 revenue). Given the promising earnings outlook, we call for an OUTPERFORM rating on FRT, with a target price of VND 215,000 (18% upside).

HSG recorded a net loss of VND 186 bn in 4QFY24, a contrast to the positive profit of VND 438 bn in 4QFY23 and VND 273 bn in 3QFY24, and lower than our estimate due to the decline in steel price and the depreciation that affected the export price. The steel sales volume of the company increased strongly by 27.9% YoY to 499k tons in the recent quarter, albeit falling by 3.1% QoQ due to seasonal factor. Cumulatively, HSG attained a net profit of VND 510 bn for the whole of FY2024, an increase by 17x off the low base in the previous year.

For FY2025, we expect the net profit to increase by 37% YoY to VND 699 bn thanks to a slight increase by 2% YoY in sales volume, and the improvement in gross margin due to a more stable steel price and the increase in proportion from domestic channel that usually carries a higher margin.

Despite the strong earnings growth potential in 2025, the 2025F PE and EV/EBITDA forwards are still demanding at 16.7x and 7.1x respectively. As a result, we maintain our current MARKET PERFORM rating for the stock with 1 -year target price of VND 20,000/share based on target PE and EV/EBITDA of 14x and 7.5x respectively.

Looking forward into 2025, PNJ market share gain trend will still continue, helping retail sales of PNJ to increase by 14% YoY in 2025. The gold shortage issue might still linger in 2025, though it might not be as severe as in 2024. With a narrower price gap between international and domestic gold price, there will be  less incentives for unauthorized purchase gold from overseas to resell on domestic market, hence reducing the need for control over gold origin and easing the gold shortage might ease in 2025. We hence expect the blended gross profit margin of PNJ to improve in 2025 due to more retail revenue in the sales mix, less severe gold shortage, and the absence of inventory write down. Net income is projected at VND 2.5 tn (18% YoY). With revised 2025 estimates, we derive a new target price for PNJ at VND 117,000 per share, with upside of 21%. As the stock recently pulled back on 3Q24 earnings weakness, we upgraded our rating from OUTPERFORM to BUY.

We believe CTD is set for stable growth over the next three years, following three years of organizational restructuring in the construction segment. CTD reported a starting backlog of approximately VND 22 tn for FY25, which aligns with the typical value in the past 2 years. With new contracts in Q1 FY25 totaling around VND 10 tn, we estimate that the current backlog should reach around VND 28tn. This solid workload supports our expectation of robust net revenue growth of about 20% in 2025. Meanwhile, investment in the property segment is expected to generate significant earnings starting in 2026. Although we remain conservative about future provision on receivables and investments, the strong balance sheet provides a solid foundation for navigating potential risks.

Based on our revised estimates and the WACC of 11.75%, our DCF model generates a higher 1-year target price for CTD at VND 77,100 per share, translating to a potential upside of 15% (previously an equal weighting of its P/B and DCF valuation). We upgrade the stock to an OUTPERFORM rating from Market Perform.

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.

During the 2024 AGM, the company has stated that it will lever its current business and invest into the logistics business to integrate deeper into the production and distribution supply chain, and help complete the nationwide logistics network, which would lower logistic costs across the country. The company is considering 3 options: B2B logistics for domestic manufacturers, B2C delivery for cross-border ecommerce, and B2B smart border logistics services.

In Dec 2024, VTP will commence operation its first investment in B2B smart border logistics services in Huu Nghi Border Gate – Lang Son province, naming Viettel Lang Son Logistic Park. The project is based on a 144-ha leased infrastructure from Lang Son Transshipment Joint Stock Company (the investor of the infrastructure, total capex of VND 3.3 trillion) and Viettel Post would be the operator of the project.

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 have revised our 1-year target price to VND 44,000/share (down from VND 48,000/share) due to a 9% downward adjustment in 2024-2025 earnings projections. Despite this, we are upgrading our stock rating from Market Perform to Outperform. We believe the recent sharp correction in share price has already reflected the lower-than-expected earnings in 3Q24. Additionally, PLX's business results are expected to recover in the coming quarter, supported by a 6%-7% rebound in petroleum prices since early October. For 2025, we anticipate a 9.7% increase in PBT to VND 4.78 trillion, driven by a 4% growth in retail sales volume. Our forecast does not yet include the potential impact of the new Decree of Petroleum Business, as it has not been finalized.

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 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