IT Services outlook – Transition from Labor-Intensive to AI-Intensive Model

• The formula “the more personnel, the more revenue” in the traditional IT consulting model appears to be encountering difficulties when examining the total headcount of related companies in 2025. In reality, this is not an anomaly but an early indicator of the industry’s shift from a labor-intensive (human-centric) model — monetizing per headcount or man-hour — to an AI-intensive model that monetizes per project.
• Nevertheless, this transition is still in the “AI adoption phase,” meaning IT consulting models leveraging AI have not yet formed a clear monetization framework. Low-value tasks such as basic coding and testing are facing price pressure as clients expect engineers to deliver significantly larger volumes of work in shorter timeframes thanks to AI automation. This is compounded by multiple global macroeconomic headwinds, causing software outsourcing demand growth to decelerate sharply in 2025, especially following the strong digital transformation wave of 2021–23.

STATE TREASURY DEPOSITS AND SYSTEM LIQUIDITY

• State Treasury (ST) deposits play an increasingly important role in the liquidity of the banking system in both Primary market and Interbank market (especially during the 2023-2025 period).
• The inclusion of an additional 20% of term State Treasury deposits in the LDR ratio and the relaxation of the SFL ratio (as reflected in Circular No. 25/2026/TT-NHNN) are aimed at supporting liquidity. However, relaxing these ratios (structurally for the system) in the current context will still face challenges: scarcity of VND cash liquidity and persistently high interest rate levels.
• To address the above issue, several key solutions can be considered: (1) in addition to OMO, the USD source available in the system couldn be utilized by expanding the USD/VND swap channel. This would help supplement liquidity and creating more space for the system to "self-stabilize" and rebalance its structure over time. We believe that this solution would not affect foreign exchange reserves or directly impact the exchange rate in the short term; (2) Continue to relax the limit for State Treasury deposits placed at commercial banks from idle budget sources (currently at 50%) to a higher level. However, this tool will become less effective in the context of increased budget revenue and requires coordination between the Ministry of Finance and the SBV; or (3) Exogenous intervention to inject money, which could resolve the balance issue, but this would directly impact the exchange rate and foreign exchange reserves.
• We believe that the synchronized implementation of liquidity support policies, combined with the expectation that the Fed will maintain current interest rate levels, will contribute to cooling down interest rates in the near future (expected in Q3).

HPG – Maintain double-digit growth.

• HPG recorded positive sales results during the first 5 months of 2026, highlighted by: 1/ Construction steel volume reaching 2.3 million tons (+7% YoY); and 2/ HRC volume reaching 2.7 million tons (+50% YoY, driven by the commissioning of the DQ02 complex). Notably, in April and May, the company sustained hot-rolled coil sales volumes above 600,000 tons per month (equivalent to an 85% operating utilization rate across production lines), with over 80% of the products consumed in the domestic market.
• We project Q2 revenue and NPAT-MI to reach VND 61.6 trillion (+17% QoQ, +72% YoY) and VND 5.6 trillion (-38% QoQ, +31% YoY), respectively.
• We maintain our fair value for HPG at VND 30,800 per share. Combined with an expected 12-month cash dividend of VND 500 per share, the total expected return stands at 32%. Consequently, we reiterate our BUY recommendation for HPG, designating it as our top pick for the building materials sector in 2026.
  

Textile Industry – Expecting positive signals in the second half of 2026

• In the first 5 months of 2026, the export and import values of Vietnam's textile and garment product groups reached USD 28.2 billion (+1% YoY) and USD 10.6 billion (+1% YoY), respectively. Textiles, garments, and footwear continue to account for the largest share, with the FDI sector leading the growth. Due to declining demand from the US market, the import-export activity of the textile and garment industry has generally grown slowly.
• Vietnam's textile and garment industry is expected to recover in 2H2026 as retailers increase inventory accumulation to meet the high shopping demand of US consumers. This is supported by (1) real expenditure still growing strongly by 5.5% YoY, (2) no signs of reduced spending on clothing, and (3) US retailers having cut inventories to their lowest level since January 2022.

Banking Sector Q2-2026 Earnings Estimates: Double-digit profit growth intact; credit leads, asset quality improves modestly through the cycle

• We forecast aggregate pre-tax profit (PBT) for our 11-bank coverage at nearly VND83tn in 2Q26, up 20% YoY and 10% QoQ, taking 1H26 PBT growth to 22% YoY. CTG leads the sector on absolute earnings at VND15.4tn (+27% YoY), ahead of VCB and BID, while VPB (+42%), OCB (+35%) and HDB (+31%) top the growth table on favourable base effects and robust credit expansion.
• Net interest income (NII) remains the sector's earnings engine, up 19% YoY. We expect credit growth of 8.1% YTD (c.18% YoY), with the disbursement mix continuing to skew toward medium-to-long tenors. Together with a decline in net new overdue loan formation from the 1Q peak, this lifts asset yields and underpins a modest 5bp QoQ NIM recovery to 3.07%.
• We see net NPL formation easing to nearly VND30tn (0.25% of loans) from VND42tn (0.37%) in 1Q26 on seasonality. On a conservative basis, we still pencil in credit provisioning broadly in line with net NPL formation to preserve the coverage buffer. The headline NPL ratio edges down 5bp to 1.55% — largely a dilution effect from credit growth — while loan-loss coverage (LLR) holds at 94%, materially thinner than the 120–127% range seen in 2023 and a key item to watch into 2H26.
• We reiterate a selective accumulation stance, prioritising: (i) state-owned banks (CTG, BID, VCB) on superior asset quality and funding-cost control, set to benefit from the inclusion of 20% of State Treasury deposits in the LDR calculation (under Circular 08/2026/TT-NHNN, carried over into Circular 25/2026/TT-NHNN), with potential upside should the Treasury raise its deposit allocation to SOCBs in 2H to underpin system liquidity and the government's high-growth ambitions; (ii) high-ROAE names (HDB, MBB), where a wide spread over the cost of equity offers clear re-rating headroom; and (iii) banks with strong 2H26 earnings-recovery momentum off a low base and healthy asset quality (ACB).

ANV – Strong Growth Recorded in Both Pangasius and Tilapia Fillet Segments

• Net revenue in Q1/2026 reached VND 1,841 billion (+66% YoY) and NPAT-MI reached VND 195 billion (+48% YoY), accounting for 24% of the company’s annual revenue target and 18.3% of its NPAT-MI plan. This represents 22% and 18% of our full-year forecasts, respectively.
• Growth was driven by both the pangasius and tilapia segments. Tilapia export volume 259% YoY from a low base as the company ramped up this segment from Q2/2025, while pangasius volume grew 18% YoY (fillet volume +39% YoY). Market structure in Q1/2026 showed a short-term shift in tilapia sales toward Brazil (66%) and the US (20%), compared to 0%/60% in the same period last year. The pangasius segment remained stable, with main markets being Thailand (38%), Brazil (14%), and the US (9%).
• Net revenue in Q2/2026 is estimated at VND2,589bn (+50% yoy) and NPAT-MI is estimated at VND 408bn (+23% yoy). Revenue growth was driven by both pangasius and tilapia segments driven by increased U.S. imports of whitefish (pangasius, tilapia) as cod prices increased by 12% yoy in Q1/2026 as cod catch quotas are expected to decline by 18% yoy to 285 thousand tonnes this year. In particular, the tilapia segment is expected to grow higher thanks to new businesses entering the industry.
• The short-term target price in 2026 according to the target P/B of 1.57x (average 2021-2025) is 26,000 VND/share. Combined with a cash dividend of VND 1,000 over the next 12 months, the total return is 26% at the market price on June 26, 2026, corresponding  to a BUY recommendation. The long-term target price will be updated in the next report.

VIB – Q2/26 Earnings forecast: Earnings growth loses momentum

• Q2/26 PBT is forecast to reach over VND 2.5 trillion (-9% QoQ, -2% YoY). Cumulative 1H2026 PBT reached VND 5.3 trillion (+7% YoY), completing 48% of the full-year forecast. 

• 2026F PBT is forecast to reach VND 11.1 trillion (+22% YoY). In which, we adjusted several key assumptions including (1) lowering credit growth to 12.4% and NIM decreasing slightly by 4 bps YoY to 3.07%, bringing net interest income up 12% YoY; (2) non-interest income increasing 31% YoY with the main contribution from service fee income increasing 59% (reflecting the one-off income from Visa in Q1/26). 

• VIB is trading at P/B 1.1x, below its 1-year average of 1.3x, reflecting weakness in the retail segment, the bank's core growth engine, with ROAE in Q1/26 falling to 16.4%, the lowest since 2017. We expect pressure on NIM and asset quality to persist through 2H2026, and accordingly lower our target P/B from 1.3x to 1.2x. Combined with the Residual Income method (Ke: 15.3%, g: 1.2%), we derive a target price of VND 17,900 per share and maintain our ACCUMULATE recommendation. 

CIRCULAR 25/2026/TT-NHNN: Not enough to resolve the liquidity bottleneck

Circular 25/2026/TT-NHNN, amending Circular 22/2019/TT-NHNN, takes effect on 1 July 2026. It was issued against a backdrop in which the high growth target requires the financial system to expand its capacity to provide medium- and long-term funding to the economy. The thrust of the policy lies not in a broad-based loosening of credit, but in adjusting the constraints on maturity structure and liquidity within commercial banks' balance sheets.

• The most important change is raising the cap on the ratio of short-term funding used for medium- and long-term lending (SMLR) from 30% to 40%. This gives banks more room to use short-term funding sources to finance medium- and long-term loans, thereby supporting sectors with long investment cycles such as infrastructure, processing and manufacturing, and real estate.
• It adds a special case whereby the increased proportion of term deposits of the State Treasury (KBNN) placed at commercial banks may be counted in the loan-to-deposit ratio (LDR) formula above the prescribed maximum level (20%). Technically, this partially eases LDR-compliance pressure for banks that receive State Treasury deposits, particularly the state-owned bank group.
• From a macro perspective, the policy reflects a deliberate coordination between expansionary fiscal policy and targeted monetary easing: fiscal policy generates capital demand through public investment and key projects, while monetary policy adjusts maturity constraints to enhance the economy's capacity to absorb capital. However, relaxing the SMLR only opens up additional room on the funding-maturity side; it does not directly create new mobilized funding. Therefore, the policy's transmission effectiveness will depend largely on the ability to improve deposit mobilization in the economy (Market 1), the LDR position of each individual bank, and the stability of system-wide liquidity.

PHR – Q2/2026 profit expected to grow strongly from compensation payments

• We project rubber segment net revenue in Q2/2026 to reach 292 billion VND (-35% YoY), as this is the off-peak season for latex harvesting; however, we expect the average selling price to remain high, reaching approximately 51.2 million VND/ton.
• Although core operations are declining, we believe the company's overall profit will grow thanks to net other income of 1,650 billion VND during the period, coming from VSIP III and Bac Tan Uyen 1 (Thaco).
• We project PHR's NPAT-MI in Q2/2026 to reach 1,345 billion VND, equivalent to +3.8x QoQ and +13.9x YoY.

EVN's 2025 business results update: Gross margin widens thanks to a sharp decrease in electricity purchase costs

• System-wide electricity consumption increased by 4.6% yoy, helping Vietnam Electricity's revenue increase by 11.2% yoy, and the Group's profit after tax improved by 529% yoy. The Group no longer bears accumulated losses, moving back to record undistributed profits. 
• Gross profit margin improved by 6.4 percentage points compared to the plan, to 14.9%, thanks to (1) the average retail price being raised to 2,204 VND/kWh from May 2025, and (2) the average cost of purchasing electricity decreased by 17% compared to the plan when the ability to mobilize hydropower increased and the price of coal and gas fuel both decreased.
• Profits recorded in the year are put into short-term investment accounts in the form of bank deposits, to ensure the ability to pay fuel costs and construction costs of key projects of the power sector. 

Raw material costs in H1-2026: Sharp fluctuations in the foundation and infrastructure groups

• Market Dynamics: Infrastructure material costs surged in H1-2026, driven by accelerated public investment, domestic mine scarcities, and elevated energy prices. The trend was led by sand and construction stone (up 15–60% YTD), while steel and cement recorded modest gains of 5–10% YTD. Looking ahead, this upward pressure is expected to ease, capped by government supply-stabilization policies and a cooling oil market.
• Corporate Impact: Leading material manufacturers stand to benefit from the ability to increase selling prices and expand profit margins. In contrast, contractors (especially in infrastructure and transportation) and real estate developers face high risks, as escalating costs directly slow down project progress and erode margins on fixed-price contracts.
  

PVS – Key highlights from the 2026 Annual General Meeting

• For 2026, PVS has set a conservative business plan, targeting consolidated revenue of VND 33.0 tn (+1% YoY) and consolidated NPAT of VND 990 bn (-45% YoY). Based on management's preliminary update, 1H2026 results remain on track, achieving 48% of the full-year revenue target and 63% of the profit target. 
• Progress at major M&C projects remains a key highlight. Projects such as Block B – O Mon, Golden Camel, Baltica Phase 2, and FengMiao are progressing according to schedule, supporting revenue recognition throughout 2026. 
• During 2026–2030, PVS plans to implement an investment program of approximately VND 32 tn, while expanding into new growth areas including LNG, gas-fired power, nuclear power, offshore wind, and energy infrastructure, laying the foundation for its next long-term growth cycle. 
• We maintain our FY2026 forecast of VND 39.454 tn in revenue (+21% YoY) and NPAT-MI of VND 2.330 tn (+28% YoY; approximately +20% YoY excluding provision reversals). Using a 50:50 weighting between the DCF and EV/EBITDA valuation methods, we derive a target price of VND 48,700/share, implying an upside of approximately 25% from the closing price on June 18, 2026. We reiterate our BUY recommendation on PVS.