Vietnam’s real estate sector may lead Q4 earnings growth: broker

The total earnings across all sectors in Vietnam are expected to rise by 25% year-on-year in the fourth quarter, with the real estate industry projected to lead the growth, according to a report.

The Q4 earnings improvement, estimated to be the highest since Q2/2022, will bring 2024’s earnings growth to 18%, reversing a 4% decline recorded last year, MB Securities (MBS) stated in a new report.

This surge is attributed to a low-interest-rate environment and recovering manufacturing activity, the broker added.

The real estate sector is anticipated to dominate earnings growth, with a 1,005% increase compared to Q4 last year, driven partly by the potential delivery of major projects, according to the report.

Trailing real estate, the aviation and retail sectors are forecast to post year-on-year growth of 591% and 162%, respectively. Meanwhile, the banking sector is projected to achieve a 14.5% increase in net profit year-on-year.

In the steel sector, strong domestic demand is expected to boost Q4 earnings by 17% compared to the same period last year. Specifically, steel giant Hoa Phat Group (HPG) is forecast to report a VND3.7 trillion ($148.06 million) net profit in Q4, marking a 25% year-on-year increase.

This growth could be attributed to an expected one-percentage-point rise in its gross profit margin to 14% and a 12% increase in output.

Oil and gas companies are also likely to see earnings improvements in Q4 after a challenging Q3, the report said.

Consumer goods and pharmaceutical retailers are expected to maintain positive growth prospects.

Pharmaceutical chains are on an expansion spree, with the Long Chau chain planning to open an additional 50 drugstores in Q4 while accelerating the rollout of its vaccination center network.

Electronic retailers, including MWG and FPT Shop, have slowed down store closures and are now focusing on increasing per-store revenue during the peak season at year-end.

In the industrial park development sector, Sonadezi Chau Duc Shareholding Company (SZC) is forecast to report a 71% year-on-year surge in Q4 net profit, driven by the completion of site deliveries.

However, Idico Corporation and Becamex are expected to experience declines in net profit, falling by 69% and 49%, respectively.