Vietnam Airlines (HOSE: HVN) | Initiation Report, BUY –1Y Upside +29.1%

Company Overview

Vietnam Airlines Corporation (HoSE: HVN) is the national flag carrier and plays a leading role in Vietnam’s air transport sector. HVN was officially established in 1995 through the consolidation of 20 aviation-related enterprises and has been listed on the HoSE since 2019.

The airline operates an extensive route network with over 50 scheduled routes and more than 360 daily flights, connecting Southeast Asia, East Asia, Europe, Oceania, and the Americas. HVN’s current fleet consists of 101 aircraft, including Airbus A350s, Boeing 787s, and Airbus A321s.

HVN has been an official member of the SkyTeam global airline alliance since 2010 and has achieved a 4-star certification from Skytrax, the international airline rating organization.

Financial Performance

During the 2020–2021 period, HVN saw a severe downturn due to the impact of COVID-19, which caused HVN to suffer huge losses and its shareholder equity became negative. In 2021 alone, HVN posted a net loss of VND 13,279 bn. After Covid-19, HVN’s revenue and net profit after tax (NPAT) recovered as tourism reopened, especially in the international market. In 2024, HVN recorded revenue of VND 107,882 bn (+16.1% YoY), supported by the Ministry of Transport’s (MoT) increase in the domestic airfare ceiling. NPAT also surged to VND 7,958 bn, marking the first year the airline returned to profitability after four consecutive years of losses.

Q1/2025 continued to witnesses HVN's strong performance, with revenue of VND 30,551 bn (+9.3% YoY)  supported by significant improvements in passenger volumes and ticket prices. NPAT reached VND 3,486 bn, down 21.5% YoY but increased 147.1% YoY if take out the one-time earnings from the debt write-off at its subsidiary - Pacific Airlines in Q1/2024.

As of the end of Q1/2025, HVN’s total assets reached VND 59,838 bn, up 6.9% compared to end of 2024. Cash and cash equivalents surged to VND 6,049 bn thanks to positive operating cash flow. The financial leverage ratio improved significantly, with shareholder equity narrowed down to VND -5,854 bn, a substantial improvement from VND -17,026 bn at the end of 2023.

Investment Thesis

o        Aviation Sector From Pandemic Crisis to a Promising Growth Trajectory

o       HVN Well Positioned to Capitalize on Industry Tailwinds

o       Strong Recovery in Financial Performance and Balance Sheet

o       Valuation Remains Attractive.

Valuation and Recommendation

We apply three valuation methods including DCF, P/E, EV/EBITDA to determine the intrinsic value of HVN shares. We initiate a BUY recommendation with a 12-Month Target Price of VND 49,050/share, representing an expected upside of +29.1% compared to the closing price on July 7, 2025. In addition, we set a 3-Year Target Price of VND 79,850/share, reflecting significant upside potential in 2025–2027 as profitability and equity fully recover.