* We attended VEA’s annual general meeting (AGM) in Hanoi on June 15, 2026.
* VEA’s 2026 guidance includes consolidated net revenue of VND4.9tn (USD185mn; +10% YoY; 108% of our full-year forecast). While no consolidated earnings guidance was provided, parent (separate) NPAT is guided at VND6.3tn (USD240mn, -10% YoY). We also expect a YoY decline in consolidated NPAT, reflecting anticipation of lower associate profits (per management’s guidance), which is attributed to (1) Honda Vietnam’s declining production volume amid the Vietnamese market accelerating toward EV adoption, and (2) Toyota Vietnam considering retaining profits for reinvestment.
* FY2025 cash dividend: VND5,240/share (dividend yield of 15.1%, 97.4% payout ratio), representing the highest level in four years. We expect dividend payouts to remain elevated, supported by VEA’s consistently strong cash dividend track record.
* VEA identified 2026 as a pivotal year for its 2026–2030 development plan, focusing on (1) core businesses, including agricultural machinery, automobiles, and spare parts, (2) restructuring via divestment of underperforming or non-core entities, and (3) collaboration with Toyota to expand production capacity and product mix, with total planned investment of USD260mn for 2026–2029 funded by retained earnings.
* Management continues to indicate that profits from the company’s three major associates — Honda, Toyota, and Ford — remain the crucial earnings driver, while all three are progressing toward hybrid/green vehicle strategies amid Vietnam’s accelerating low-emissions transition. Beyond existing associates, VEA is also exploring a strategic partnership with a major Chinese auto group at the VEAM Auto plant in Thanh Hoa, targeting EV passenger cars (5–7 seats), electric trucks, and construction/industrial vehicles, with potential expansion into mining and other applications.
* VEA remains under warning status due to three consecutive years of qualified opinions, mainly driven by legacy non-core issues. Management has outlined resolution initiatives. Firstly, items within VEA’s authority are being actively addressed, with clear progress in reducing inventories through accelerated sales and auctions to clear slow-moving and obsolete stocks, although debt collection at certain subsidiaries (e.g., VEAM Transport JSC, Tran Hung Dao Mechanical) remains slow. Secondly, issues requiring State-owner approval are being handled in coordination with relevant authorities, primarily the Ministry of Industry and Trade, with involvement from other ministries (including the Ministry of Finance) where necessary. These items typically take longer to resolve, as seen in remaining issues at several assets and unresolved projects, such as MATEXIM’s Sponge Iron Plant, which continues to accumulate losses from depreciation and interest expenses amid suspended operations. Additionally, management emphasized that there are no new legacy issues arising from current operations.
* Management reiterated its plan to pursue the migration of VEA’s listing from UPCoM to HSX, though progress remains slow due to unresolved audit opinions, suggesting a more prolonged timeline rather than a near-term transition.
Powered by Froala Editor
