- We maintain our OUTPERFORM rating for QNS while increasing our target price (TP) by 4%. This is mainly due to (1) an increase in our aggregate 2024F-28F NPAT-MI forecast by 6% (+3%/+8%/+7%/+9%/+5% in 2024F/25F/26F/27F/28F), (2) rolling over our TP horizon to mid-2025 vs YE2024 in our previous report, and (3) changing our valuation method for the sugar business to target P/E from the replacement value method. Given QNS’s long-term focus on its sugar ecosystem expansion, we believe the P/E valuation is more effective to capture the sizable sugar contribution to QNS’s earnings and the Vietnamese stock market’s view of QNS as a sugar producer rather than a soy milk player (see page 4).

- We factor in the company’s investment plan of VND2.0tn (USD81mn) in expanding sugar plant capacity to 25K tons/day (vs current 18K tons/day) and biomass powerplant capacity to 135MW (vs current 95MW) by 2027 in our forecast. In our view, the investment in the volatile sugar & biomass business will deteriorate the company’s ROIC from 21.5% in 2023 to 13.6% in 2027F.

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