Update on Banking Sector’s Asset Quality in 1Q25
06-06-2025
: BID, CTG, VCB, VPB, MBB, SHB, STB, HDB, ACB
: Banking
: Tung Do
Tags:
- On-balance sheet non-performing loans (NPLs) from customer loans at 27 listed banks increased by over VND 37 trillion in 1Q25, following a reduction of more than VND 25 trillion in the prior quarter, representing a 16% QoQ increase. As a result, the total on-balance sheet NPLs at the end of 1Q25 rose to over VND 265 trillion, corresponding to an NPL ratio of 2.16%, compared to 1.92% at the end of 2024.
- Net NPL formation (before write-offs) in 1Q25 reached VND 64.5 trillion, a significant increase from approximately VND 11 trillion in the previous quarter. Of this, net NPL formation for the banking group (excluding consumer finance companies) amounted to VND 57.5 trillion, with a high concentration among four banks—BID, CTG, VPB, and MBB—accounting for 69% of the total net NPL formation.
- NPLs are expected to continue rising in the upcoming quarter, driven by the strong net increase in Group 2 loans, estimated to be equivalent to the net NPL formation in 1Q25, with significant latent NPL risks remaining. However, the scale of new NPLs will vary between state-owned banks and joint-stock commercial banks, as the substantial NPLs incurred by BID and CTG in 1Q25 have passed probation period and returned to the standard loan category.
- Specific credit risk provisioning expenses amounted to nearly VND 29 trillion, representing only 45% of the net NPL formation. Consequently, the industry’s loan loss reserve (LLR) coverage ratio declined to 92% at the end of 1Q25 from 110% in the prior quarter. The LLR coverage ratio for state-owned banks remained above 100%, at 132% (4Q24: 167%), while that of joint-stock commercial banks (JSCBs) further deteriorated to 56% (4Q24: 62%). The low LLR coverage ratio for JSCBs will increase pressure to bolster provisions to address both existing on-balance sheet NPLs (with a high proportion of Group 3 and 4 loans) and newly arising NPLs to manage the NPL ratio effectively.
PVS – Strong Q1/2025 performance driven by major projects
05-06-2025
: PVS
: Oil & Gas
: Huong Le
Tags: Result Update Block B
- PVS reported solid Q1/2025 results, with consolidated revenue reaching VND 6,014 billion (+62% YoY), driven mainly by the M&C segment and the Block B – O Mon and Greater Changhua offshore wind projects in particular. NPAT-MI reached VND 332 billion (+10% YoY), fulfilling 38% of the full-year target, reflecting stable earnings quality from FSO/FPSO joint ventures and provision reversals at PSB.
- We maintain our 2025 forecast with net profit is VND 1,358 billion, up 27% YoY, supported by stable contributions from the FSO/FPSO segment and continued growth in M&C.
- We recommend ACCUMULATE for PVS, with a target price of VND 37,900 per share, offering a 17% upside from the closing price on June 5, 2025.
FMC – Accelerating exports ahead of US tariff decision
04-06-2025
: FMC
: Fishery
: Hien Le
Tags: Fisheries FMC
- Vietnam's shrimp industry has recently faced many difficulties when the US tariff is expected to be applied to Vietnam higher than competitors in the world. However, FMC still shows a reasonable strategy when continuously showing strong growth in the first 5 months of 2025. FMC's 5M2025 export value reached 115 million USD (+41% YoY) as a strong 38% YoY growth of shrimp consumption.
- Although the selling price of Vietnamese shrimp is often higher than that of competitors, Vietnamese enterprises such as FMC have had a strong direction in the niche market of value-added shrimp products, such as breaded shrimp. Vietnam's value-added shrimp is only under pressure to compete directly with Thailand thanks to the positioning of high-quality products.
- In the field of food consumption, in addition to the selling price, consumers are very interested in product quality. Shrimp with high antibiotic residues are often refused import by the FDA. Therefore, we believe that Vietnam can compete in the US market with the position of high-quality value-added (VAT) shrimp products, as shown by accounting for 37% of the market share of value-added shrimp in Japan.
- Although tariff risks from the US and high raw shrimp prices due to the epidemic situation continue to cause difficulties for the shrimp industry , we expect FMC to easily change the market when the tariff rate in the US is not favorable. Since then, FMC's net profit is estimated at VND 308 billion (+1% YoY), equivalent to the long-term target price of VND 48,000 and BUY recommendation.
GDA – Focusing on the domestic market, initial steps for the listing plan
03-06-2025
: GDA
: Materials
: Thach Lam Do, CFA
Tags: Steel
- In Q1 2025, GDA recorded revenue of VND 3,977 billion (-3% YoY, -2% QoQ), with stable sales volume compared to the same period last year, reaching 197 thousand tons (-3% YoY, -1% QoQ). However, compared to the first half of 2024, when the export market had not yet been impacted by protectionist policies, GDA shifted its order allocation towards the domestic market in 2025. This resulted in a domestic sales volume of 117 thousand tons (ranking second in market share and accounting for 16% of the total domestic coated steel output). Gross profit reached VND 282 billion (-19% YoY, +54% QoQ), and the company’s net profit after tax (NPAT) amounted to VND 63 billion (-34% YoY, +194% QoQ).
- The company plans to distribute a 2024 dividend in cash at a rate of 10% (VND 1,000 per share), and in shares dividend of 30% (100 shares entitled to 30 new shares). GDA maintains its plan to construct a new coated steel plant (with a capacity of 1.2 million tons per year), with Phase 1 expected to commence operations in 2026.
- Notably, at the Annual General Meeting of Shareholders, the company presented to a plan to transfer its listing to the Ho Chi Minh Stock Exchange (HOSE), although no timeline was specified. This indicates that GDA has taken initial steps towards listing and is laying the foundation to enhance its visibility among investors in the stock market
Vietnam bond market report - May 2025
02-06-2025
: VDS
: Macroeconomics
: Toan Vo
Tags: Bond
- Primary government bond issuance dropped sharply in May, with new issuance totaling only VND 18,049 billion (–57.5% MoM); the auction success rate fell to its lowest level YTD (46.5%). Winning yields and secondary market yields continued to edge up, reflecting ongoing upward pressure from global yield trends and investor caution.
- Government bond market liquidity remained solid, with average daily trading value at VND 14,463 billion (+14.4%), primarily from outright transactions. Foreign investors maintained net buying activity, helping stabilize liquidity and support market sentiment.
- The real estate sector accelerated bond buybacks in May. New corporate bond issuance decreased (VND 34,500 billion, –21.6% MoM), but early redemption activity picked up, particularly among real estate and banking groups. Cumulatively over the first five months, corporate bond issuance reached more than VND 80,500 billion (+26.2% YoY); early buybacks totaled nearly VND 54,900 billion (+6.8%).
- Corporate bond maturity pressure will rise in the coming quarter. In Q3/2025, the real estate group is expected to face significant maturity pressure with VND 42,000 billion due (57% of total maturities). The value of overdue corporate bonds rose to VND 53,600 billion, with real estate accounting for nearly 60%.
- Liquidity in the secondary corporate bond market improved but remained polarized. Total trading value in May reached VND 9,890 billion (+10.1%), mainly in the 1–3 year tenor segment among financial institutions. Real estate bonds were traded mostly at longer tenors (over 3 years), highlighting a clear divergence in risk appetite across sectors.
HDB - Outstanding growth driven by expanding credit scale and non-interest income
30-05-2025
: HDB
: Banking
: Trang To
Tags: HDB
- Positive 1Q25 business results were mainly driven by a sharp expansion in non-interest income (+204% YoY), especially from fee income, bond trading activities, and other activities. Net interest income grew 3% YoY with credit growth of 3.8% YTD, led by corporate lending at 9.9% YTD, while NIM narrowed by 80 bps QoQ to 4.8%. However, asset quality deteriorated, with a strong rise in net NPLs formation pushing the consolidated NPL ratio (customer loans) to 2.4% (4Q24: 1.9%).
- For 2025, PBT is projected to grow 22% YoY, based on (1) credit growth outlook of 31% and a ~50 bps decline in NIM to 4.8%, and (2) robust non-interest income growth (+51% YoY), primarily contributed by bancassurance, corporate advisory, and recoveries of written-off bad debts.
- The current target price is VND 27,400/share, implying an expected return of 29% (including VND 1,000 in cash dividend), with a BUY recommendation for HDB.
GEG – Revenue rose sharply thanks to the retroactive payment of Tan Phu Dong 1
29-05-2025
: GEG
: Power
: Nguyen Duc Chinh
Tags:
- In Q1/2025, GEG recorded revenue of VND 1.1 trillion (+51% YoY) and NPAT-MI of VND 378 billion (+322% YoY). The main growth driver came from the retroactive payment amount of VND 397 billion from Tan Phu Dong 1 wind power plant after the completion of the PPA, despite a 25% YoY decline in wind power output due to low wind speeds. Solar power output decreased by 9% YoY due to cool weather, leading to a 6% YoY decrease in revenue, to VND 210 billion. In contrast, hydropower benefited from favorable hydrological conditions, output increased by 19% YoY and revenue reached VND 61 billion (+7% YoY), despite a decrease in market prices.
- GEG's interest expense decreased by 24% YoY due to a 9% YoY decrease in the company's total outstanding loans. GEG's NPAT increased by 315% YoY, to VND 375 billion. During the quarter, GEG completed 33% of its revenue plan and 89% of the annual profit plan thanks to unexpected revenue spikes.
MWG – Q1-2025 results exceeded expectations driven by a recovery in ICTCE retailing market share
28-05-2025
: MWG
: Retailing
: Hung Nguyen
Tags:
- MWG’s Q1-2025 results surpassed our expectations, delivering net revenue of VND 36,135 bn (+14.8% YoY) and it of VND 1,546 bn (+71.3% YoY), propelled by a significant recovery in ICTCE retail market share through a leaner store network with lower operating and depreciation costs. Two key strategies underpinned this success: (1) Strengthening partnerships with high-potential brands (familyship), and (2) Revamping customer acquisition strategies, adhering to twin principles of “saving customer wallets” through 0% installment plans, enhanced discounts, and price reductions, alongside “upgraded premium after-sales services.”
- The profit potential for MWG stock in the near term hinges on the spearhead of “BHX Central penetration,” as the current market price fully reflects the restored ICTCE retail market share and the company’s efficient financial investment performance.
- Bolstered by the robust recovery in electronics retail market share, we raise MWG’s valuation to VND 68,700 per share (including a VND 1,000 cash dividend per share), derived from a 50:50 blend of long-term DCF and short-term SoTP methodologies.
- We advise investors to closely monitor BHX’s key performance indicators in upcoming quarters, particularly improvements in sales per store (from VND 1.8 bn to above VND 2.0 bn) or net margin (from 0.2% to 0.5-1.0%). Strong/underwhelming BHX results could amplify or dampen short-term profit expectations for MWG’s stock, thereby increasing/decreasing the short-term SoTP method’s contribution (50%) to MWG’s overall valuation, potentially unlocking greater/lesser profit upside.
NLG – Business performance strengthened by handovering of Akari 2 and Can Tho projects
27-05-2025
: NLG
: Real Estate
: Giao Nguyen
Tags: NLG
- In Q1/2025, NLG's revenue and gross profit increased sharply over the same period, reaching VND 1,291 billion (+531% YoY) and VND 413 billion (+377% YoY), respectively, thanks to the promotion of handovers at Akari 2 and Nam Long Can Tho projects. Gross profit margin recorded 32%, due to NLG's handover of high-rise products and low-value products (Akari 2 and EhomeS Can Tho)
- Presales in the first quarter decreased compared to the same period and the previous quarter and reached VND 545 billion (-68% QoQ, -53% YoY). However, presales in April alone reached VND 2,031 billion, showing positive signs of recovery in Southgate (Long An) as well as satellite areas.
- We estimate that NLG's revenue and net profit after tax and minority interest (NPAT-MI) in 2025 to reach VND 6,661 billion (-7% YoY) and VND 794 billion (+53% YoY), respectively, mainly from handovers at Southgate, Can Tho and Akari 2 projects.
MONETARY MARKET UPDATE MAY 2025: ANCHORING AGAINST THE TIDE
26-05-2025
: VDS
: Macroeconomics
: My Tran
Tags: VDS
- The State Bank of Vietnam (SBV) conducted net withdrawals on the open market in May 2025, with the volume of collateralized lending via open market operations (OMO) falling sharply compared to the previous month.
- Interbank interest rates and deposit rates remained stable throughout the month.
- Commercial banks continued to promote mortgage lending, especially targeting young homebuyers through preferential interest rate packages, while the Government urged banks to participate in large-scale credit programs to accelerate national strategies on infrastructure development and digital transformation.
- Despite external pressures, credit growth maintained strong momentum in April 2025, with the credit outstanding as of April 28th already surpassing full-year growth expectations.
- Three notable and significant changes in the global monetary landscape: 1. Rising concerns about debt and fiscal deficits, especially following Moody’s recent downgrade of the US sovereign credit rating; 2. The possibility of foreign exchange market interventions being included in trade negotiations with the US; 3. A visible trend of foreign reserves diversification, reducing overreliance on the US dollar.
- We believe these developments will shape a medium- and long-term outlook of weakening US dollar strength. Overall, this trend is expected to be favorable for maintaining VND stability.
- A favorable outcome of the negotiations will help to contain the depreciation of the VND. Currently, we still maintain the view that the VND may depreciate by 3-5% in 2025.
ACV – Revenue and profit maintain growth momentum thanks to international tourism demand
23-05-2025
: ACV
: Aviation
: Quan Cao
Tags:
- In Q1-FY25, NPAT reached VND 2,716 billion (+5% YoY), in line with our forecast (estimated NPAT for Q1-FY25 was VND 2,560 billion), representing 26% of our full-year projection.
- We maintain a positive outlook on ACV’s growth potential in 2025. For 2025, projected passenger volumes are 46 million for international (+9% YoY) and 76 million for domestic (+6% YoY). Revenue and NPAT are expected to reach VND 24,626 billion (+9% YoY) and VND 10,472 billion (+3% YoY), respectively.
- Despite a recent resurgence of COVID-19 in parts of Southeast Asia and China, most cases are mild and the situation remains under control. Nevertheless, this poses a potential risk to international passenger volumes and must be closely monitored.
- The market price largely reflects its current growth outlook. We maintain an ACCUMULATE recommendation with a target price of VND 113,200 per share, implying an expected return of 15%.
The Fed’s independent monetary policy amid political challenges and global volatility
22-05-2025
: VDS
: Macroeconomics
: Toan Vo
Tags: FED US Trump interest rate
- The Fed maintains its stance despite pressure from the White House.
- Safeguarding the Fed’s monetary policy independence under the Trump administration.
06-06-2025
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