Thien Long Group (HOSE: TLG) | 3Q26 Earnings First Take, ADD – Upside +12.6%

Strong Earnings Growth Despite Rising Input Costs; FY26 Forecast Upgrade Likely

3Q26 Performance: TLG reported 3Q26 revenue of VND 1,268bn (+7.0% YoY, -6.4% QoQ), driven by domestic sales of VND 948bn (+6.1% YoY) and exports of VND 320bn (+10.0% YoY). Domestic GPM expanded 2.1ppts YoY to 55.8%, offsetting weaker export GPM amid higher PP and logistics costs, keeping consolidated GPM broadly stable at 49.9%. Improved cost control, with SG&A rising only 1.0% YoY, supported 41.1% NPAT-MI growth to VND 107bn. For 9M26, revenue increased 12.3% YoY to VND 3,622bn, supported by export growth of 18.8% YoY to VND 1,055bn and domestic growth of 9.8% YoY to VND 2,566bn. However, export GPM declined 3.9ppts to 32.8%, offsetting a 2.1ppt expansion in domestic GPM, leaving consolidated GPM flat at 49.7%. PP prices rising approximately 50% YoY in September pose a key margin risk from 4Q26.

FY26 Forecast Delivery: 9M26 revenue and NPAT-MI fulfilled 78.6% and 93.8% of SBBS’s FY26 forecasts, respectively, and 82.3% and 96.2% of management’s full-year targets, suggesting upside to our FY26 earnings estimates. However, rising raw-material costs and seasonally higher SG&A expenses in 4Q26 could limit further earnings upside.

FY27 Outlook: Margin pressure remains a key concern, as management has opted against broad-based price increases of 15–20% to protect market share against low-priced imports. Consequently, GPM recovery will depend largely on product mix improvements, selective price adjustments, and the ability to absorb higher input costs.

Investment Implications: Attractive Dividend Yield And Strategic Upside

The proposed FY26 cash dividend of VND3,500/share implies an attractive 6.3% yield at the current share price, providing downside support.

Kokuyo’s acquisition of TLAT’s 46.82% stake and launch a tender offer for up to another 18.19% during 4Q26, bringing its total ownership to 65.01%. Competition authority approval was granted on 9 September, subject to conditions including annual R&D spending of VND3bn in Vietnam and market-share and pricing disclosures. The implied valuation of VND72,000/share represents a 37.1% premium to the current market price, providing a potential valuation benchmark and opening opportunities for TLG’s product portfolio and international distribution through Kokuyo’s network.