VHC – Pangasius filet segment targets sales growth amid US tariff uncertainty – AGM Note

• We attended VHC’s annual general meeting (AGM) on April 24, 2025. The meeting focused on the company’s 2025 business outlook as well as its strategic direction for 2025.
• For 2025, management guides for (1) base case revenue of VND10.9tn (USD427mn; -13% YoY) and NPAT-MI of VND1.0tn (USD39mn; -18% YoY), representing 74% and 68% of our respective full-year forecasts; and (2) best case revenue of VND12.35tn (USD549mn; -1% YoY) and NPAT of VND1.3tn (USD58mn; +6% YoY), equivalent to 84% and 88% of our respective full-year forecasts. We see potential downside risks to our 2025F forecasts due to the potential negative impacts of reciprocal tariffs, pending a more comprehensive review.
• FY2025 cash dividend: VND2,000/share (yield of 4.4%), in line with our forecast. The payment date will be determined by the BOD.
• VHC plans capex of VND830bn (USD33mn) in 2025, mainly allocated to fish meal and filet factories, collagen factory machinery upgrades, Feedone warehouses, and pangasius farming areas.

Management addressed concerns regarding potential new US reciprocal tariffs, stressing that importers bear this cost and expect the market to absorb potential price increases over time due to pangasius's competitive positioning. US customers are reportedly loading orders ahead of potential tariff implementation, thus potentially boosting Q2 2025 demand. Management targets a 9%-10% revenue increase for the pangasius filet segment. The growth is supported by capturing market share from whitefish competitors like pollock, cod, and tilapia. Management emphasized that the whitefish competitive landscape will be influenced by global tension, which leads to high prices (for cod and tilapia) and geopolitical sanctions (for pollock). This creates an opportunity for VHC to whitefish gain market share as the world's largest pangasius exporter.

VHC’s long-term strategy is focusing on leveraging competitive advantages and expanding its value chain. According to VHC, the permanent removal from the US anti-dumping duty investigation is a significant advantage. The company is striving to enhance capacity and efficiency, evidenced by plans for expanding fish meal and filet factories and developing pangasius farming areas. In the collagen and gelatin business, the second gelatin factory (operational since mid-2024) is expected to drive 15% YoY revenue growth in 2025, focusing on higher-value collagen products supported by machinery upgrades. Additionally, in 2025, VHC targets USD20mn (VND510bn) revenue in its rice products segment (Thanh Ngoc and Sa Giang subsidiaries), driven by expanded capacity, development of own growing areas, launching new products (e.g., instant noodles), and strengthening domestic branding/distribution.

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