Vietnam retail sector leads Q3 earnings growth, mid-caps yield highest returns: brokerage

Earnings of stock exchange-listed companies in Vietnam are estimated to rise 18.8% year-on-year in Q3/2024, with the retail sector taking the lead, according to a report by Hanoi-based VnDirect Securities.

The companies are publicly traded on three bourses in Vietnam: Ho Chi Minh City Stock Exchange, Hanoi Stock Exchange, and the Unlisted Public Company Market.

Profits of retailers rose 142% year-on-year, primarily driven by Mobile World Investment Corporation (HoSE: MWG), which reported a 1,965% surge in net profit. This growth was attributed to higher revenue per store and the closure of underperforming outlets.

However, the sector's Q3 net profit declined over 32% from Q2, ending a four-quarter streak of continuous growth.

The electricity sector was the runner-up with a 124% profit growth, fueled by hydropower stocks benefiting from La Nina and PV Power's (HoSE: POW) unrealized exchange rate gain of VND265 billion ($10.47 million), which sent POW’s net profit nearly quadrupling.

The personal and household goods sector saw profit hike by 112% year-on-year as the global economic recovery boosted export orders.

Notably, the real estate sector ended a four-quarter streak of contraction, posting a 16.2% increase in revenue and a 49.3% jump in profit compared to the same period last year. This improvement was driven by a recovering real estate market, rising land prices, and earnings from projects.

The oil and gas industry, on the other hand, suffered due to fluctuations in oil prices, incurring a 119% plummet in Q3 profits. Binh Son Refining and Petrochemical Company Limited (UPCoM: BSR), in particular, reported a loss of VND1.2 trillion ($47.4 million), due to a narrowing crack spread and weakened consumption.

In Q3, stock returns across these sectors experienced positive growth, led by mid-cap stocks with a 30.5% rise in returns year-on-year.

Among the VN30 companies, which represent the top 30 largest stocks by market capitalization and liquidity on the HoSE, 22 recorded net profit growth in July-September. Noteworthy increases included MWG (1,965%), Masan Group Corporation (1,349%), POW (380%), VietJet (323%), and Vietnam Rubber Group JSC (202%).

In contrast, Vietnam National Petroleum Group (HoSE: PLX) experienced a 91% decline in Q3 profit due to lower oil prices and the absence of extraordinary financial gains.