Strong Q1 earnings boost Vietnam stock market

THE HANOI TIMES — Vietnam's stock market is entering a phase of relative stability, supported by encouraging first-quarter earnings and steadily improving investor sentiment.

As of April 19, 2025, about 161 listed companies, representing 14.1% of the total market capitalization, have reported their financial results or provided preliminary estimates for Q1 2025. The total after-tax profit of these companies rose 21.6% year-on-year.

This is a strong growth rate, especially compared to the last two quarters (-4.1% in Q4 2024 and +17.7% in Q3 2024). The main contributors to this growth are the banking sector (CTG, NAB, ABB, NVB), securities (VCI, VIX, MBS, EVF), electricity (POW), electrical equipment (GEE), livestock (HAG, DBC) and export-oriented companies (ANV, VGT).

According to a report by Saigon - Hanoi Securities (SHS), while global uncertainties, particularly US-China tensions, continue to weigh on sentiment, domestic fundamentals are showing renewed signs of strength, creating a more favorable environment for equities.

Investor confidence, while still cautious, has improved as businesses post solid first-quarter financial results, the brokerage firm said in a report.

"This wave of earnings has reassured investors about the resilience of corporate performance in the face of external headwinds. Meanwhile, easing trade tensions between the US and China have helped calm regional markets," SHS said.

With over 1,600 listed companies, Vietnam's stock market shows high valuations. The average price-to-earnings (P/E) ratio is 12.4 and the price-to-book (P/B) ratio is 1.55, both below historical averages. Many stocks, particularly those with stable business models and long-term growth potential, are trading below intrinsic value, making them suitable for gradual accumulation or short-term tactical trading.

Technically, the market has displayed both resilience and caution. The VN Index opened the week with a rally above 1,240, signaling positive momentum. However, renewed concerns over global trade triggered a mid-week sell-off, pushing the index towards the psychological support level of 1,200.

By week’s end, demand for bottom fishing returned, helping the index close at 1,219, just over three points lower than the previous week.

Vietnam Construction Securities Corporation (CSI) noted that on the weekly chart, the VN Index posted a modest 0.27% decline after testing the 1,245 resistance level. Profit-taking pressure increased, especially from short-term traders capitalizing on recent gains. The CSI anticipated a potential retreat towards the 1,180 support zone before a meaningful rebound. Should this occur, the index may target the 1,270-1,300 area as the next equilibrium zone.

The remainder of April is expected to be shaped by corporate earnings. CSI believed these results will play a decisive role in revaluing stocks and influencing sentiment. Sectors such as banks are expected to post strong numbers, driven by robust credit growth and lower interest rates. Retail and consumer staples are expected to benefit from rising household incomes and continued government stimulus. Livestock, seafood and utilities should also post solid results on the back of favorable cost structures and growing demand.

VNDIRECT Securities viewed this period as an opportune time for portfolio restructuring. Stocks with strong fundamentals and positive profit momentum are likely to outperform. Investors are encouraged to use market pullbacks, particularly if the VN-Index revisits 1,200, as opportunities to selectively accumulate high-quality names.

Recent market behavior has shown clear sectoral divergence. Eleven sectors posted gains while ten declined, reflecting active capital rotation. Fertilizer, seaport and retail stocks were among the top performers, driven by strong fundamentals and macro tailwinds. In contrast, industrials, telecoms and seafood declined as investors took profits or responded to sector-specific challenges.

Foreign investors remained cautious. On the Ho Chi Minh Stock Exchange (HOSE), net foreign outflows totaled VND4.8 trillion ($185 million), with VIC, HCM, and FPT among the most sold stocks. However, select large-cap names such as HPG, MWG, and ACB attracted notable net buying, suggesting targeted confidence in resilient companies.

Despite improved sentiment and strong earnings, market experts remain prudent. Both SHS and CSI emphasize the importance of disciplined, selective investing in this phase.

"There are opportunities for accumulation, particularly in banking and retail, but aggressive use of margin is discouraged. Investors are advised to rebalance gradually and avoid chasing short-term rallies, focusing instead on well-structured portfolios based on fundamentals," SHS suggested.