We attended TLG’s 2025 AGM on April 10, 2025. Key highlights are below:
1. 2025 guidance
- Revenue: VND4.2tn (+12% YoY; 93% of our full-year forecast).
- NPAT: VND450bn (-2% YoY; 83% of our full-year forecast).
- We believe TLG's guidance is conservative, following its track record. Nevertheless, we see downside risks to our forecast, pending a fuller review.
2. Q1 2025 preliminary results
- Revenue in 2M 2025: VND370bn (-21% YoY, 8.2% of our full-year forecast).
+ Domestic: VND212bn (-24% YoY, accounted for 57% total sales).
+ Export: VND158bn (-18% YoY, accounted for 43% total sales).
- Gross profit in 2M 2025: VND152bn (-25% YoY, 7.6% of our full-year forecast).
- Per management, Q1 2025’s earnings were flat YoY, while expecting growth YoY for Q2 2025.
3. Management’s comments
- In 2025, TLG will continue strengthening its domestic distribution network by enhancing e-commerce capabilities and accelerating new product launches through increased R&D investment. For exports, the company aims to expand its international footprint, focusing on key markets such as Southeast Asia, the EU, and the US. TLG also plans to gradually increase average selling prices (ASP) year-over-year by shifting toward higher-value SKUs.
- Competition landscape:
+ TLG products are used by 61% of Vietnamese consumers in a market with over 70 competing brands.
+ Comparison to Chinese competitors: TLG holds advantages of (1) an extensive local distribution network, (2) deep understanding of the domestic market, and (3) strong branding, remaining top-of-mind among Vietnamese consumers. While competitors may have supply chain advantages, entering Vietnam through niche segments or applying pricing strategies could lead them to lose competitive positioning vs TLG over the long term.
+ In export markets, TLG’s strategy focuses on three pillars: (1) globalization, (2) high product quality, and (3) new product development tailored to market needs. The company leverages its experience in Vietnam by sending teams to the export market to train staffs at there, ensuring strong sales capabilities in these markets.
- Impact of US tariff:
+ The US market contributes ~9% of TLG’s revenue but 16% of net profit. Management acknowledges the negative implications of potential tariffs. However, most exports to the US are either (1) medical-grade pens, which prioritize quality over price, or (2) OEM orders, which typically require at least six months for buyers to switch suppliers. Thus, the risk of sudden disruptions is limited.
+ TLG is awaiting further updates before finalizing its strategic response. In the meantime, the company remains proactive in supply chain management and is accelerating growth in Southeast Asia, the Middle East, and Europe to offset potential revenue loss from the US.
- The company faces minimal FX risk as export revenues exceed import costs, creating a natural hedge.
- TLG is currently pursuing an M&A deal, which is nearing completion. TLG conducts careful due diligence, focusing on synergy and alignment with long-term sustainable strategies.
4. Issuance plan
- 2024 dividend:
+ 25% in cash: 10% (VND1,000/share) was paid in 2024, the remaining 15% (VND1,500/share) will be paid in 2025.
+ 10% in stock at a 10:1 ratio. The expected payment time is Q2-Q3 2025. Following this, TLG’s share capital will increase by 10% to VND951bn (USD37mn) from the current VND865bn (USD34mn).
- 2024 ESOP: 1.3 million shares at VND10,000/share. The expected payment time is in Q3-Q4 2025.
- 2025 dividend: 35% par value in cash and/or in stock.
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