Vietnamese technology stocks decline despite stock market uptrend

Technology stocks have been on the decline since their rallies in 2024, depite the stock market has been on an uptrend since April.

FPT in particular has been under strong net selling pressure from foreign investors.

In 2024, technology stocks rose amid the boom of AI. However, since the beginning of 2025, after the launch of the low-cost AI model DeepSeek, this group of stocks has started to drop.

Even during the big uptrend since April, with the VN-Index, which represents Ho Chi Minh City, has increased by more than 550 points to reach new all-time highs of over 1,600 points, the technology group has continued to fall.

In particular, the core stock in the group, FPT of FPT Corporation, once again lost the three-digit mark to fall to VND97,700 ($3.7) per share, down 26% from the peak set at the beginning of the year.

The decline of FPT stock was largely due to foreign investors. Since the end of July, foreign investors have been net selling FPT shares, with a volume of up to 57.7 million units, equivalent to over VD6,000 billion ($227.49 million).

Similarly, stocks in the Viettel group such as VGI and CTR are trading 18% and 29% lower than the price range in January. Meanwhile, CMG and ELC have not been able to surpass the price range before the U.S. tariff turmoil in early April.

This development is quite contrary to the world's technology stocks. The shares of Google's parent company, Facebook or Nvidia all recorded a decrease in price from the beginning of the year to April, but then recovered strongly and are currently establishing new high price zones.

However, most analysts highly value the prospects for technology stocks given the AI wave, saying the current decline is a suitable adjustment after a hot 2024.

Business growth results growth

The company that plays a key role in the technology group - FPT Corporation (HoSE: FPT) reported that its revenue and profit still grew compared to the same period last year, but the growth rate has slowed down.

The company announced that its revenue in the first seven months of the year reached VND38,091 billion ($1.44 billion), up 11% year-on-year, while profit after tax was VND5,147 billion ($195.15 million), up 20%. The technology and telecommunications segments still play a key role in the group's revenue and profit.

The growth rates of revenue and profit are lower than in the previous years. At the beginning of the year, the company set a target of increasing revenue by 20% and profit by 21% compared to 2024.

However, in a recent meeting with investors, FPT's board of directors proposed a plan according to a new baseline scenario with the target of raising revenue and pre-tax profit by 15% and 18-19% respectively year-on-year.

SSI Research believes that FPT's profit growth in the second half of this year will be moderate, at around 15-16%. The reason is that the technology segment is likely to continue to be under pressure due to the weak value of new contracts.

Revenue from the overseas IT segment (the largest contributor in the technology sector) recorded a revenue increase of only 14% in H1, lower than the 30% rise in the same period last year.

The value of new contracts increased by only 5%, lower than the 13% growth in the same period of last year. The reason is that global IT spending has been somewhat cautious, especially since Q2 in the context of increasing macroeconomic instability following the U.S. tariff policy.

However, the telecommunications segment is expected to be the main driver of short-term profits thanks to boosting sales, optimizing internet service packages, and controlling costs, helping to increase the number of fixed-line internet subscribers.

SSI Research noted that on July 16, the Ministry of Public Security took over the state capital ownership at FPT Telecom (UPCom: FOX) (50.2% stake) from the State Capital Investment Corporation (SCIC). There is no assessment yet on how this will affect FPT.

Viettel Global (UPCom: VGI) reported that H1 saw its revenue reach VND20,171 billion ($176.19 million), up 21.6% year-on-year, and profit after tax VND3,289 billion ($124.44 million), up 15.2%.

The company said that the good growth came from foreign market companies (including subsidiaries and associates). Specifically, Lumitel's sales and service revenue in Burundi rose by 66%, Halotel in Tanzania by 61%, Natcom in Haiti by 64%, and Movitel in Mozambique by 48%.

Elcom Technology-Telecommunications JSC (HoSE: ELC) said that the production situation at some subsidiaries in H1 grew and developed well in line with strategic goals.

In addition, the company completed a number of major projects on schedule. As a result, net sales and service revenue in H1 reached VND330 billion ($12.49 million), up 31.4%, and after-tax profit was VND18 billion ($681,000), up 50%.

CMC Technology Group (HoSE: CMG) with a different fiscal year (April 1 to March 31) reported good business results in Q1. Revenue increased by 23% to VND2,210 billion ($83.6 million) and profit after tax was VND117 billion ($4.43 million), up 20% over the same period last year.

According to the company, most business segments were positive, with the technology and solutions segment alone achieving an increase of nearly 10 times over the same period of last year. In addition, the digital infrastructure segment and the international business segment saw profits surge by 39% and 33%, respectively.

Financial revenue for this quarter was VND21.76 billion ($823,230), almost unchanged compared to the same period last year. Financial expenses increased by 25.18% to VND17.4 billion, of which interest expenses rose by more than 18% to VND16.3 billion. Selling expenses and administrative expenses recorded VND22 billion and VND127 billion, respectively, up 5% and 27%.

At the end of Q2/2025, Viettel Post's after-tax profit reached VND99.7 billion (3.77 million), up 14.6%. This growth mainly came from a slight increase in sales and service revenue, while the cost of goods sold decreased, helping to improve profit margins.

Viettel Post Corporation (Viettel Post, HoSE; VTP) also had a positive financial statement season in Q2, with net revenue reaching VND4,982.3 billion ($188.49 million), up 1%.

After-tax profit was VND99.7 billion ($3.77 million), an increase of 14.6%. This growth mainly came from a slight increase in sales and service revenue, while the cost of goods sold decreased compared to the same period, helping to improve profit margins.