Petrosetco (HOSE: PET) | 3Q26 Earnings First Take, SELL – Downside -41.8%

Core Business Remains Resilient, But Capital Allocation And Leverage Raise Concerns

3Q26 Performance: PET recorded 3Q26 revenue of VND7,268bn (+28.6% YoY) and NPAT-MI of VND69bn (+43.7% YoY), supported by improved ICT distribution margin. For 9M26, revenue grew 43.1% YoY to VND20,348bn, while NPAT-MI rose at a slower pace of 12.3% to VND210bn. GPM improved 1.2ppts to 5.9%, supported by higher ASP due to rising RAM prices, while the SG&A-to-revenue ratio remained stable at 3.3%. However, financial expenses nearly doubled to VND410bn, including interest expenses of VND339bn (+73% YoY), limiting bottom-line growth.

FY26 Forecast Delivery: In 9M26, PET achieved 87% and 89% of our FY26E revenue and NPAT-MI forecast. While the recovery in core operations supports earnings delivery, rising financing costs, and potential losses from equity investments could weigh on 4Q26 results. We will reassess our FY26 forecasts accordingly.

FY27 Outlook: We expect PET's core operations to remain resilient, supported by its established distribution network and supplier relationships, although margin may normalize. Oil & gas services could provide a stable growth base amid accelerating national projects. However, expansion into infrastructure and environmental services, alongside equity investments, may increase leverage and interest expenses. We are reviewing our FY27 forecasts and valuation to reflect the potential funding needs and returns of these investments, which remain uncertain.

Investment Implications: Downgrade to SELL Following Recent Share Price Rally; Valuation Under Review

We revise our target price to VND29,400/share, primarily reflecting the increase in PET's share count from 107mn to 154mn shares. Since we released our initiation, PET's share price surged 239.4%, from VND14,880 to VND50,500 as of 03 November 2026. Given the significant rally, we downgraded our recommendation from HOLD to SELL, with our revised target price implying 41.8% downside.