Aggregate Q1 2024 NPAT-MI for our coverage universe increased 12% YoY and achieved 25% of our full-year 2024 forecast. Aggregate Q1 2024 NPAT-MI for our HSX-listed coverage increased 11% YoY, also achieving 25% of our 2024 forecast. However, if we strip out two large exceptional gains – a VND15.7tn divestment gain at VIC and VND3.6tn of one-off other income at HVN – adjusted aggregate Q1 2024 NPAT-MI declined 11% YoY and achieved 19% of our aggregate 2024 forecast.

Outlook. Vietnam’s GDP growth of 5.7% YoY and overall economic performance in Q1 2024 were broadly in line with our expectations and we maintain our forecast for growth to improve to 6.5% in 2024 from 5.0% in 2023. Although an adjusted Q1 2024 NPAT-MI achievement ratio of 19% suggests some potential downside risk to our 2024F forecasts ex-exceptional gains, we remain positive on the market for the three reasons outlined in our January 5 Vietnam Strategy 2024 report, namely: earnings recovery in 2024/25F, low bank deposit rates, and undemanding valuations relative to the VN-Index’s history and other ASEAN markets. We maintain our VN-Index targets at 1,350 for 2024 and 1,550 for 2025.

Q1 2024 achievement ratios for banks and consumer looked comfortable at 23-24% of our FY2024 forecasts and we expect further cyclical recovery in sectors such as real estate, materials, and transport & logistics through the remainder of the year. We also note that while a large part of HVN’s one-off income appears to be non-cash, VIC’s divestment gain is a cash transaction and therefore contributes positively to the company’s cash flow.

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