IMP – NEUTRAL reccomendation under negligible impact of reciprocal tariffs
05-05-2025
05-05-2025: IMP
: Pharmaceuticals, Biotechnology
: Quyen Nguyen
Tags:
- In Q1/2025, IMP posted net revenue of VND 594 billion (USD 24mn), marking a 21% year-on-year increase. Both the OTC and ETC channels saw solid growth, rising 25% and 27% year-on-year, respectively. Net profit reached VND 74 billion (USD 3mn), up 20% from the same period last year. EBIT and net profit margins held steady at 15.7% and 12.5%, respectively on a year-over-year basis, underscoring IMP’s consistent cost control and operational efficiency.
- We believe the impact of the US reciprocal tax policy on IMP’s operations is indirect and, at present, limited. However, the tariff outlook remains uncertain.
- Our forecasts and valuation for IMP are currently under review. We will update investors as soon as possible. The current target price for IMP stands at VND 44,900 per share. Based on the market price as of April 29, 2025, we maintain a NEUTRAL rating on the stock.
52 OCB – Shrinking non-interest income and deteriorating asset quality
29-04-2025
: OCB
: Banking
: Trang To
Tags: OCB
Q1/25 PBT recorded VND 893 billion, a sharp decline compared to the previous quarter and Q1/24 (-39% QoQ, -26% YoY), achieving only 17% of the full-year target (over VND 5.3 trillion), mainly due to a contraction in non-interest income including FX trading income (VND 7 billion, -94% YoY) and government bond invesment (-VND 100 billion vs. a gain of VND 15 billion in Q1/24).
Credit growth reached 2.2% YTD (Q1/24: 2.5% YTD), with slower growth in the corporate lending portfolio (2.2% YTD vs. 5.3% YTD in Q1/24), while retail credit showed a significantly better performance YoY, growing 2.3% YTD (Q1/24: -2.4% YTD). NIM stood at 3.2% this quarter, with an 80 bps decline QoQ due to: (1) 60 bps drop in asset yields from lower lending rates to support customers, (2) 30 bps rise in funding costs from increased mobilization efforts since Q1, (3) sharp rise in new NPLs formation.
Asset quality deteriorated as new NPLs formation surged (VND 1.6 trillion). Combined with a low provisioning level this quarter (credit cost dropped to 0.2%), this led to the lowest adjusted NPL coverage buffer (including debt pending for foreclosed assets settlement) since 2019, at just 30.5%.
We revise our 2025F PBT forecast to VND 5,030 billion (+26% YoY), with expected credit growth of 20.4% and NIM of 3.4%. OCB stock is valued at VND 12,600/share, with a current P/B of 0.82x based on closing price as of April 29, 2024.
NKG – Transition from export to domestic market
28-04-2025
: NKG
: Materials
: Thach Lam Do, CFA
Tags: Steel
- In 1Q2025, NKG reported revenue of VND 4,090 billion (-23% YoY, +5% QoQ), with coated steel consumption volume estimated at 205,000 tons (-10% YoY, +4% QoQ). The company saw a slight recovery in production volume by focusing on the domestic market, achieving a domestic sales volume of 109,000 tons (+38% QoQ). The export market’s share decreased to approximately 47% of total consumption. The gross profit margin remained stable at 6.4% (compared to 6.7% in Q4/2024), with gross profit reaching VND 263 billion (-13% QoQ), supported by stable raw material and finished product prices (HRC prices steady at USD 500-510/ton in Q1).
- NKG recorded the 1Q25 net profit after tax (NPAT) for the parent company of VND 65 billion (+253% QoQ), reflecting a recovery from the underwhelming business performance in Q4/2024.
- At the 2025 Annual General Meeting, NKG outlined a cautious business plan, targeting revenue of VND 23,000 billion (+12% YoY) and profit before tax of VND 440 billion (-21% YoY). On the investment front, the company is prioritizing the completion of the Phu My steel plant in 2025, with operations expected to commence in Q1/2026
MONETARY MARKET UPDATE APRIL 2025: IMPACT OF THE TARIFF SHOCK ON CREDIT GROWTH AND EXCHANGE RATES
25-04-2025
: VDS
: Macroeconomics
: My Tran
Tags: VDS
- The SBV continued net injection via the OMO channel in April 2025, with a net injection of VND 16.8 trillion (as of April 24, 2025). Demand for longer-term loans in the open market was more evident during the month.
- The interbank market remained relatively stable and did not react significantly to the tariff shock announced by the Trump administration on April 2.
- The previous downtrend in deposit rates has paused. As of April 23, 2025, the average 12-month deposit rate had decreased by about 0.12 percentage points compared to the end of 2024. In contrast, lending rates fell more sharply, by approximately 0.6 percentage points in the first three months of 2025, according to SBV estimates.
- Credit grew positively in Q1/2025. However, the tariff shock may negatively affect credit in the manufacturing and consumption sectors in the coming months.
- In a worst-case scenario where Vietnam's exports face a 46% tariff entering the U.S. market, causing declines in exports and GDP growth, we expect the SBV to implement support measures such as debt deferrals/rescheduling to minimize bad debt risks—similar to the COVID-19 period or the Yagi typhoon disaster. Achieving the 16% credit growth target in 2025 would be difficult under this scenario.
- The USD has weakened sharply since Trump announced retaliatory tariffs, which is favorable for the USD/VND exchange rate. However, uncertainty around Vietnam’s final tariff treatment after negotiations creates concerns about exports and foreign investment flows, triggering pressure on the USDVND stability.
- In the short term, SBV has room to manage VND depreciation within a 3–5% band. In the negative scenario, a 46% tariff on exports could cause stronger VND depreciation to offset export market tariff pressure.
The Unsustainable Trajectory of U.S. Public Debt
24-04-2025
: VDS
: Macroeconomics
: Toan Vo
Tags: Sovereign debt Budget deficit US
- The U.S. Budget deficit soars in 2024 driven by rising government spending needs.
- DOGE's cost-cutting efforts do not significantly reduce the federal budget deficit in 2025.
- U.S. public debt is forecasted to reach a record high over the next 30 years.
TNG – Prioritize caution in the face of unexpected developments in reciprocal taxes
23-04-2025
: TNG
: Textile & Garment
: Quan Cao
Tags: TNG
- TNG's latest target price is VND 26,700/share, which does not yet the reflect tariff risks from the US market. We recommend OBSERVATION in the absence of official information.
- In Q1-FY25, revenue and profit after tax reached VND 1,511 billion (+12% YoY) and VND 43 billion (+3% YoY), respectively. Revenue continued to show double-digit growth thanks to TNG’s focus on expanding into the European market, particularly with long-standing customer Decathlon. NPM decreased by 20 bps to 2.9%, due to Decathlon’s higher quality control and inspection requirements compared to other partners. This led to an increase in both SG&A expenses as the proportion of orders from Decathlon grew.
- To hedge risks from the US market, TNG is actively diversifying its customer base. The company aims to maintain the proportion of the US orders at 26%. At the same time, it is developing a large customer base in Russia and continues to promote the European market.
Revised Power Development Plan VIII: Cautious optimism for renewable energy
22-04-2025
: REE, GEG, BCG, POW, NT2
: Power
: Nguyen Duc Chinh
Tags:
- Vietnam’s Revised National Power Development Plan VIII (RPDP8), approved in April 2025, sets more ambitious energy targets to support 10% annual GDP growth. The plan prioritizes the expansion of wind and solar power, boosting installed capacity by up to 16-55% and reinforcing Vietnam’s long-term shift towards renewable energy.
- Under RPDP8, solar and wind power will receive significant capacity boosts to meet rising industrial demand and offset slower LNG development. In contrast, gas-fired projects see limited progress due to high costs and challenges in execution.
- RPDP8 faces major challenges in capital mobilization, infrastructure readiness, and technological capability. Addressing price regulation, outdated support mechanisms, and weak grid and supply chains will be critical to turning these targets into reality.
NTC – Business results in 1Q2025 remain stable following the handover of the NTC3 project
21-04-2025
: NTC
: Industrial Land RE
: Giao Nguyen
Tags: NTC
- Business results in Q1 2025 remained stable, with revenue reaching VND 134 billion (+136% YoY) and profit after tax reaching VND 69 billion (+6% YoY), mainly thanks to the handover of land area in NTC3 Industrial Park by the one-time accounting method.
- The large source of unrealized revenue (VND 3,515 billion), of which short-term unrealized revenue reached VND 392 billion (+176% QoQ), which is a solid basis for revenue recognition and profit growth in the remaining quarters of 2025.
- In the short term, uncertainty about the U.S. reciprocal tariff policy will not have a major impact on NTC's 2025 business results. However, in the long term, the tariff policy may impact the ability to sell the remaining land area in the NTC3 industrial park.
PNJ – MONITOR reccomendation in all reciprocal tariff scenarios
18-04-2025
: PNJ
: Retailing
: Quyen Nguyen
Tags:
- We propose three baseline scenarios to provide a relatively comprehensive view of PNJ’s business outlook in light of Vietnam’s macroeconomic landscape, particularly under the condition of the reciprocal tariffs that the US imposes on Vietnam exported goods. These three scenarios correspond to different tariff levels and are accompanied by a sensitivity table that illustrates PNJ’s valuation under each scenario:
- Best scenario: 10% reciprocal tariff. In this case, jewellery consumption growth is expected to remain largely unaffected, averaging 4.1% annually between 2025 and 2029. Under this scenario, we maintain our previous forecasts, although we acknowledge that this projection leans toward the optimistic end relative to what may actually unfold.
- Worst scenario: 46% reciprocal tariff. As jewellery is a discretionary item, we anticipate that the decline in jewellery consumption growth will exceed the general slowdown in retail sales. Despite that, we assume an average annual contraction of 2% in jewelry demand.
- Base case scenario: Tariff level falls between the two above. We have not conducted a detailed forecast for the base case.
- We recommend that investors continue to closely MONITOR PNJ stock under any of these tariff scenarios. Nonetheless, we also recognize that in the short term, PNJ’s share price may be driven more by market sentiment and global macroeconomic developments than by fundamentals. As a result, its market valuation may not accurately reflect its intrinsic value.
Oil prices decline but no major concerns: Vietnam’s upstream sector remains in the "safe zone"
17-04-2025
: PVS, PVD
: Oil & Gas
: Huong Le
Tags: Brent crude oil OPEC OPEC+
- Brent crude oil prices for 2025 are expected to fluctuate within a narrow range in 2025 due to increased supply pressures and slower demand growth. The United States, Brazil, and Canada are the leading contributors to supply growth, while OPEC+ may adjust production increases in 2H2025.
- Conversely, ongoing US-China trade tensions have reduced global growth prospects, causing organizations such as OPEC and the EIA to lower their oil demand forecasts. Nevertheless, low inventory levels and the flexible production management policy of OPEC+ will mitigate the risk of a sharp decline in oil prices.
- Notably, Brent crude prices are still significantly higher than the breakeven price of USD 55 per barrel for most oil fields in Vietnam. This has allowed oil companies such as PVDrilling, PTSC, and PVEP to maintain strong profitability.
DRC – Uncertain tariff context affects business prospects in key US market
16-04-2025
: DRC
: Automobiles
: Hung Nguyen
Tags: DRC TBR tire
- The proportion of DRC's truck & bus radial tire (TBR) export revenue to the US has inched up from 13.9% to 20.4% in 2024. The U.S. is identified as a strategic market for the DRC in the long term as key markets in the mainland and Brazil have declined sharply due to the intense competition of Chinese and Thai tires over the years.
- The 90-day tax deferral from the Trump administration helps reduce pressure on tire businesses such as the DRC temporarily. The synchronous reciprocal tariff on tire products of other countries is 10% and China's is 145%, which will help maintain DRC's advantage in low selling prices compared to its main competitor, Thailand. We believe that DRC will boost export orders in Q2-2025 – the period when Thai tires are subject to AD tariffs. and "racing" before the final decision for Trump's reciprocal tariffs for all countries in early Q3-2025. DRC's business results this quarter may be more dramatic than the rest of 2025.
- After the tax deferment period from Q3-2025, in the unchanged tax scenario for Vietnam of 46%, the expected price advantage for Thai tires is expected to be "leveled" when the total tax applied to tires of these two countries is similar. DRC will suffer from the dual impact of the decline in the overall market size and have difficulty expanding its market share here. Therefore, the growth of DRC's market share depends on the ability to share the tariff burden for agents compared to competitors in Thailand and Cambodia. We think DRC will choose the strategy of sacrificing profit margins to ensure output.
- At the moment, the tariff variables in the U.S. market or the extent of the decline in market share in the Brazilian/domestic market are unclear, so we move the recommendation of NEUTRAL to the DRC on MONITOR until there is a clearer update on the above issues from the business or the Trump administration.
TRADE UPDATE MAR 2025 - THE IMPACTS OF TARIFF SHOCK ON VIETNAM’S TRADE OUTLOOK
15-04-2025
: VDS
: Macroeconomics
: My Tran
Tags: VDS
- Trade growth in Q1/2025 is stable but the trade surplus has narrowed significantly.
- Most export items have increased relatively evenly in Q1. Imports may continue to grow in the short term to have enough inventory to serve the stockpiling of inventories in the US during the 90-day tariff suspension period.
- Vietnam's dependence on US-China trade leads to poor adaptation to the trade war in the short term. In Q1/2025, 30% of Vietnam's exports came from the US market and 38% of Vietnam's imports came from China. These are also the two markets that recorded the strongest growth in exports and imports in Q1/2025.
- As Vietnam heavily depends on international trade (total import-export turnover/GDP is 165% in 2024), especially its dependence on the US in terms of exports and China in terms of imports, the impacts of tariff shocks on global trade are harmful to Vietnam.
