PetroVietnam Ca Mau Fertilizer (HOSE: DCM) | 3Q26 Earnings First Take, BUY – Upside +24.0%

Strong Volumes Drive 9M26 Earnings, But FY27 Earnings Face Pressure From Lower Urea Prices And Higher Gas Costs

3Q26 Performance: DCM reported 3Q26 net revenue of VND5,742bn (+92.2% YoY, -12.6% QoQ) and NPAT-MI of VND430bn (+31.1% YoY, -60.0% QoQ). Growth was broad-based, with urea, NPK and fertilizer trading revenue rising 87%, 3.3x and 48% YoY, respectively. Urea sales volume reached 215k tonnes (+71% YoY), while NPK benefited from higher volumes (+152% YoY, 31.7% QoQ) and ASPs of VND11,424/kg (+13.9% YoY). Blended GPM declined to 19.1% (-2.8ppts YoY, -12.1ppts QoQ), as urea GPM contracted 8.4ppts YoY to 30.6%. Below the gross profit line, financial expenses surged 5.1x YoY to VND144bn, while financial income fell 56.6% YoY as FX gains normalized, further weighing on earnings growth.

FY26 Forecast Delivery: 9M26 revenue and NPAT-MI achieved 80.0% and 83.4% of our FY26 forecasts, respectively, exceeding management's guidance. Urea sales volume reached 741k tonnes, already surpassing 92% of our full-year forecast, with year-end restocking ahead of the Winter–Spring crop season providing further support. We see room for an upward revision to our FY26 revenue estimate, but would maintain a cautious earnings outlook, as lower urea ASPs and elevated gas costs could offset additional sales.

FY27 Outlook: We expect a double squeeze from lower urea ASPs, as Chinese exports resume, Middle Eastern supply recovers and geopolitical ease, and higher gas costs as declining PM3 availability necessitates more expensive alternatives. Our FY27 forecasts already factor in these headwinds, with revenue projected at VND20,875bn (-5.9% YoY) and NPAT-MI at VND2,419bn (-11.6% YoY). We therefore see no immediate need to revise our FY27 estimates, although the urea price–gas cost spread remains the key earnings sensitivity, with further margin compression posing downside risk to our forecasts.

Investment Implications: Attractive Valuation and Dividend Yield

Despite strong FY26 earnings, DCM's share price has corrected 33.4% from its peak to VND33,300 as of 30 Oct 2026, reflecting concerns over FY27 earnings normalization. At current levels, the stock trades at 6.4x FY26E and 7.3x FY27E P/E, below its five-year average of 9.0x.

A strong balance sheet, with VND8,025bn in cash and short-term investments (~40% of assets), and an attractive 6.0% dividend yield provide valuation support. We favor accumulating DCM at current levels, as much of the expected FY27 earnings decline appears priced in.