Dabaco Vietnam (HOSE: DBC) | 2Q26 Update, BUY – Upside +29.8%

Weaker Earnings Amid Lower Asp

DBC 2Q26 Performance

DBC's 2Q26 revenue rose 11.2% YoY, supported by resilient agricultural sales and likely solid feed volumes. However, lower hog prices compressed livestock margins, with GPM falling 600bps YoY to 14.7%. Higher leverage added further pressure, with borrowings rising 23.0% YTD to VND7.2tn and financial expenses increasing 29.8% YoY. As a result, NPAT declined 43.0% YoY to VND289bn. For 1H26, revenue and NPAT-MI reached VND 8,377bn and VND 663bn, meeting 51.5%/59.4% management guidance and completing 53.5%/58.0% of our FY26E revenue and NPAT-MI forecasts.

Earnings Forecast

We maintain FY26E revenue at VND16,332bn (+9.6% YoY) and NPAT-MI at VND1,143bn (-24.1% YoY), based on an average hog price assumption of VND60,000/kg. For FY27E, we forecast revenue of VND18,008bn (+10.3% YoY) and NPAT-MI of VND1,273bn (+11.4% YoY).

Target Price and Rating

We revise our 12-month TP to VND21,100/share (from VND28,400), reflecting the June 2026 stock dividend, a higher 8.0% risk-free rate, and and lower target multiples of 7.0x P/E and 5.5x EV/EBITDA amid a more cautious macro backdrop. Our revised TP implies 29.8% upside from the 14 August closing price of VND16,250/share.

Following a ~42% correction from its August 2025 peak, DBC trades at 6.2x FY26E P/E, below the 8.5x peer average in our coverage. We believe the current valuation largely reflects near-term pressure from weaker hog prices and higher financing costs, while DBC's integrated 3F+ platform and capacity expansion support its medium-term outlook. We therefore maintain our BUY rating, with hog-price recovery as the key re-rating catalyst.