Vietnam Earnings Surge 43%, But Market Lags

2

Strong corporate profits signal upside as global uncertainty keeps investors on the sidelines

VIETNAM INSIDER – While global investors remain fixated on geopolitical tensions and macro volatility, Vietnam’s corporate sector is quietly delivering one of the strongest earnings rebounds in Southeast Asia—creating what could be a mispriced opportunity in an increasingly competitive emerging market landscape.

Early data from PYN Elite Fund shows that 238 listed Vietnamese companies have reported first-quarter 2026 results, posting an average profit growth of 43%. Although this sample represents just 17% of total market capitalization, the momentum is clear: Vietnam’s earnings cycle is accelerating, even as market sentiment struggles to catch up.

The divergence becomes more striking at the top end of the market. The fund’s five largest holdings—accounting for nearly half its portfolio—delivered an average profit growth of 54%, prompting multiple brokerages to upgrade ratings and raise target prices. Yet equity valuations have not fully repriced, suggesting a widening gap between fundamentals and market behavior.

Sector performance reinforces the narrative of a broad-based recovery. In banking, Sacombank reported quarterly pre-tax profit of around €130 million, stabilizing after a volatile 2025 and signaling that its long-running restructuring process is nearing completion. In industrials, Hoa Phat Group shocked the market with a 171% profit surge, underscoring a powerful cyclical rebound in steel demand and operational efficiency. Retail and consumption also remain resilient, with Mobile World Investment Corporation posting an 81% earnings jump, reflecting improving domestic demand.

Meanwhile, Vietnam’s structural growth engines continue to deliver steady expansion. FPT Corporation reported a 14% increase in quarterly profit, backed by a strengthening global order book in IT services. In aviation, Vietnam Airlines saw profit rise about 10%, benefiting from shifting travel demand linked to Middle East tensions—though rising fuel costs are expected to pressure margins in the near term.

Despite this earnings strength, Vietnam’s stock market remains subdued. VN-Index has only edged higher this year, while PYN Elite’s NAV has slightly declined, reflecting cautious investor positioning. Market attention has largely gravitated toward geopolitical risks—particularly the Iran conflict—and heavy trading in Vingroup-related stocks, which dominate index movements. As a result, the broader earnings recovery has yet to translate into a sustained market rally.

This disconnect highlights a familiar but critical dynamic in emerging markets: sentiment often lags fundamentals. For long-term investors, however, that lag is precisely where opportunity is created. If geopolitical pressures ease and liquidity returns, Vietnam’s current earnings trajectory could act as a powerful catalyst for re-rating—raising a key question for global capital: is this hesitation a warning sign, or the early stage of the next breakout cycle?

Related

Source: Vietnam Insider