Vietnamese listed firms stay cautious on 2026 profit outlook despite strong Q1

Vietnamese listed companies are entering 2026 with robust Q1 earnings growth, yet most are setting markedly more cautious full-year business targets as concerns over capital costs, uneven demand recovery, and widening sector divergence weigh on corporate sentiment.

A notable contradiction has emerged in the stock market: while listed firms posted strong Q1 results, many are adopting a more conservative stance on full-year profit plans compared with the earlier post-recovery period.

According to Data Digest #28 released by FiinTrade, Q1 after-tax profit of listed companies rose 38.4% from a year earlier. However, full-year market-wide earnings growth is forecast at only around 14.1%, significantly below the 32.2% increase recorded in 2025.

FiinTrade’s survey of 928 listed companies, representing about 87.2% of total market capitalization, showed that most firms are prioritizing cash-flow stability and financial safety over aggressive expansion targets.

The trend reflects an uneven economic recovery, with financing costs remaining elevated, liquidity conditions still tight in several sectors, and consumer as well as investment demand recovering more slowly than expected.

Another key factor is the high comparison base effect. After strong earnings growth in 2025 driven partly by a low base in previous years, many companies are now facing narrowing room for further acceleration, prompting management teams to adopt a more cautious approach.

The divergence is also becoming more apparent across market-cap segments. While leading blue-chip firms continue to drive overall earnings growth, many mid- and small-cap companies remain focused on preserving cash flow and protecting margins amid rising input costs.

The VN30 basket is expected to regain its role as the market’s main growth engine, with projected earnings growth of nearly 20%, supported primarily by Vingroup-related real estate firms, steelmakers and several large banks.

By contrast, many mid- and small-cap companies are targeting flat or significantly slower growth than in the previous year, as they remain more vulnerable to higher funding costs, raw-material volatility and weak consumer demand.

Banks, real estate and steel remain key growth drivers

Financial companies, particularly banks, are expected to resume their role as the market’s primary earnings pillar after a period of slower expansion.

Still, banking-sector profit growth is also forecast to moderate. According to FiinTrade, listed banks are targeting average profit growth of around 16.3% this year, the slowest pace in the past three years.

The biggest pressure comes from narrowing net interest margins (NIMs), while bad debt risks and provisioning costs remain elevated. Some major banks are adopting conservative growth targets to prioritize asset-quality control.

Meanwhile, smaller and mid-sized banks are expecting stronger recovery thanks to a lower profit base last year and room for credit growth improvement.

Among non-financial sectors, residential real estate remains one of the most promising profit-growth areas, with earnings projected to rise more than 37%.

The main driver is expected to come from revenue recognition of projects sold in previous years rather than a broad-based rebound in new demand.

However, questions remain over market liquidity, cash-flow pressure, and the ability to absorb new supply, suggesting that the sector’s recovery is likely to remain selective rather than broad-based.

Steel is another bright spot, ranking among sectors with the most ambitious growth targets. The main driver remains Hoa Phat Group, which is expected to benefit from additional capacity from its Dung Quat 2 project.

Still, the sector’s outlook is not entirely uniform. Many coated steel producers continue to face margin pressure as raw-material prices rise faster than selling prices.

Smaller firms continue prioritizing cash preservation

In the consumer sector, food, agriculture and dairy companies are continuing to bet on a recovery in domestic demand, while some agricultural firms expect to return to profitability after years of restructuring.

Even so, consumer spending has yet to stage a sufficiently strong rebound, leading major retailers such as Mobile World Investment and FPT Retail to scale back the aggressive growth plans seen during the earlier post-downturn recovery phase.

Similarly, construction companies are expected to benefit from accelerated public investment disbursement this year, though earnings prospects remain constrained by intense bidding competition and persistently high material costs.

The building materials sector is also becoming increasingly polarized. Some cement and infrastructure-material producers expect gains from public investment projects, while others continue to face pressure from weak export demand and a slow domestic recovery.

Overall, listed companies’ 2026 business plans reflect what analysts describe as “calculated caution” rather than outright pessimism.

Growth drivers remain present in banking, real estate and steel, but the gap between sectors is becoming increasingly pronounced. After a year of strong recovery, corporate earnings growth this year is expected to slow while becoming more deeply differentiated across industries.