CTR - Guidance for 7% YoY PBT growth in 2025; moderate bottom-line growth though 2030 - AGM Note

• We attended CTR’s AGM in Hanoi on April 16, 2025.
• The AGM approved 2025 guidance including total revenue of VND14tn (USD559mn; +10% YoY) and NPAT-MI of VND563bn (USD23mn; +5% YoY; 93% of our 2025F projection). CTR has a track record of slightly beating its guidance, with actual total revenue/NPAT-MI beating its respective guidance by an average of 7%/6% in 2022-2024, respectively. Despite this, we see potential downside risks to our 2025-32F forecasts, pending a more comprehensive review.
• Shareholders approved a FY2024 cash dividend of VND2,150/share (2.6% yield). CTR expects a FY2025 dividend ratio of 10%-20%, either in cash and/or stock dividends (CTR has not yet specified the types of dividends).

1. Plan to 2030G:

- CTR targets annual top-line growth of 10%–15% and bottom-line growth of 5%–10% through 2030 (trailing our projected 2024-30F PBT CAGR of 19%).

- Management expects top-line growth to be led by construction, technical services & system integration, and infrastructure leasing segments, each expected to grow at over 20% annually. Additionally, CTR projects operation revenue to grow 3%–5% annually. The slower bottom-line growth reflects a higher contribution from lower-margin construction and technical services & system integration segments. However, we note that EBITDA growth should be higher than PBT growth, driven by the high-margin towerco business.

2. Infrastructure segment:

* Towerco:

- Number of new towers:

+ CTR plans to build 2,000 new towers in 2025.

+ CTR maintains its long-term target of reaching 20,000-30,000 towers by end-2030, implying 10,000–20,000 new towers during 2025–30F.

- Tenancy rate: Management targets to raise its tenancy ratio to 1.045 in 2025 from 1.03 at end-2024. CTR believes it is necessary for telcos to increasingly adopt tower sharing going forward for cost efficiency.

- The national strategy in digital infrastructure aims for 5G coverage reaching 99% of the population by end-2030. In the best-case scenario that Viettel fully achieves this target, CTR estimates that it would require Viettel to have a total of ~100,000 towers equipped with 5G devices. With Viettel’s current network comprising ~55,000 towers, CTR estimates that ~45,000 new towers would need to be constructed by end-2030. CTR aims to build 50% of these during 2025–30 and lease them to Viettel.

* Cable along the North-South Highway project:

- CTR targets to bring ~580 km length of the cable (~28% of its total 2,089 km from Da Nang to the south) into operation in 2025. The company is seeking for construction licenses for some sections of the cable.

- Once the entire 2,089 km is completed, CTR estimates potential revenue from leasing the entire cable at VND200-500bn (USD8-20mn), depending on tenancy.

3. Other segments:

* Construction segment:

- CTR believes that Viettel will accelerate 5G equipment installation, particularly in urban areas, in 2025. Per CTR, Viettel plans to equip 15,000-20,000 towers with 5G devices in 2025, though it may prioritize existing towers rather than entirely 5G towers. CTR expects to be partially involved in installing 5G devices on Viettel’s towers, which generates revenue booked under its construction segment.

- In B2B construction, CTR plans to expand participation in public and FDI-funded projects. In B2C construction, CTR aims to boost its integrated residential construction ecosystem, leveraging synergies with its smart home, furniture, and home appliance offerings.

* System integration & technical services segments: CTR expects to focus on high-value M&E projects and solar energy solutions.

* Operations segment: CTR guides to (1) continue delivering services meeting KPIs for existing clients and (2) expand to non-Viettel clients.

4. Other discussion:

* Potential impacts of reciprocal tariffs on CTR: Management has a positive view on long-term impacts of tariffs due to the potential manufacturing relocation from China to Vietnam, while there may be some short-term disruptions.

* Comments on potential impacts of Starlink’s satellite internet: As a telecom operator and constructor, CTR may benefit from potential demand of installing Starlink’s internet satellite devices.

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