Top 50 signals the recovery of Vietnam's economy

Vietnam's Top 50 Best-performing Companies of 2024 have solid fundamentals, strong management, and substantial room for growth, says Nguyen Thanh Thao, CEO of Thien Viet Securities Joint Stock Company (TVS).

This year's top 50 includes 28 companies that have appeared 5 times in the list and 12 others that have been recognized more than 10 times in this ranking, Thao noted at the ceremony honoring the 50 Best-performing Companies in Vietnam for 2024 last week.

Top 50 of 2024 accounts for 55.6% of the total market capitalization on the HOSE, with 23 companies valued at over $1 billion. Return on equity (ROE) of these 50 companies significantly exceeds the aggregate market average.

The banking sector remains the one with the largest number of companies in the Top 50, with 12 representatives (24%), led by VCB with the highest market capitalization, followed by CTG, TCB, VPB, and others. This sector is a cornerstone of the economy and benefits as credit growth accelerates.

The information technology (IT) sector has only two representatives in the Top 50 but has made a strong impression with significant growth in both revenue and ROE, and stock performance.

A notable example is FPT, which achieved a compound annual growth rate of over 21% in revenue, an average ROE of 27%, and a stock price increase of more than 175% from 2020 to 2023.

Analysts forecast that Vietnam's information and communications technology market (hardware, software, IT services, and telecommunications services) could reach a size of $36.06 billion by 2029, up from $21.11 billion in 2023, representing a compound annual growth rate (CAGR) of 9.1%.

The chemical sector also has 2 representatives in the TOP50, with chemical and fertilizer companies continuing to hold high positions in the 2024 ranking. This indicates that businesses in the sector have successfully capitalized on the export growth opportunities amid global supply constraints caused by the Russia-Ukraine conflict.

In the future, the introduction of value-added tax (VAT) on fertilizers (5% in July 2025), will allow businesses to deduct the input VAT cost, thereby supporting the profits of domestic fertilizer producers.

The real estate sector has seen a decline in the number of companies in the TOP50, with only 3 representatives remaining: VHM, KDH, and NLG; the construction and material sector is represented by VGC and BMP.

The ranking of Top 50 Best-performing Companies is considered as a valuable and prestigious ranking. TVS is one of the advisory units for the Survey Council, which includes many leading economic experts, to identify and honor companies with outstanding performance.

The evaluation data this year is based on the financial and trading results from the last 4 years (2020-2023), including net revenue, after-tax profit, equity (recorded as of December 31 each year), and market capitalization (as of November 1, 2024).

The key evaluation criteria are compound annual revenue growth over the last three years, average return on equity, stock profitability over the last 3 years, and market capitalization.

Therefore, the results partly reflect the sustainability of growth and profitability of the companies, demonstrating the success of management and operational strategies aimed at sustainable development.

This also helps create a community of Vietnamese businesses striving for long-term values. These companies have proven their ability to maintain sustainable growth and profitability over time.

Thao shared that TVS, with the advisory role to the Survey Council, hopes that consultations on criteria and ranking methodology will help Vietnamese businesses understand the importance of sustainable management in achieving effective growth.

These are closely interconnected factors, serving as a guiding principle for businesses to have confidence in their management, operations, and financial capabilities.