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.

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.

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 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.

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.

2025 growth should likely converge to an organic level, without outliers.

Between 2025-2026, HHV plans to issue around VND 1 tn in charter capital to support new BOT infrastructure projects, while potential BOT projects likely require substantial additional funding.

With stable operations and the government's ambitious public investment plans, we believe that the shares of HHV are  well-positioned to benefit from accelerated public investment.

Our 2025 sales and NPAT estimates are approximately VND 3.7 tn (+11% YoY) and VND 519 bn (+9.7% YoY), respectively. Our DCF model provides a one-year target price of VND 15,100 per share, and we reiterate our Outperform rating on the shares of HHV.

While the company's operations remain stable, supported by a robust construction backlog and the government's ambitious infrastructure development targets, we believe that the stock is an opportune vehicle to capitalize on the theme of public investment acceleration, which could boost infrastructure development-related stocks.