Petrosetco (HOSE: PET) | Initiation Report, BUY - 1Y Upside +36.6%

Company Information

PET is one of the key subsidiaries of Vietnam Oil and Gas Group (PVN). As of today, PET has become one of the leading ICT distributors in Vietnam, partnering with prestigious brands such as Samsung, Apple, HP, Dell, among others. In addition to ICT distribution, the company also provides material and equipment supply services, logistics and life support for the oil and gas industry, as well as property management solutions.  

Financial Performance

During the 2019–2024 period, PET’s revenue, and net profit after tax (NPAT) recorded compound annual growth rates (CAGR) of 13.7% and 11.5%, respectively.

For 2025, management has set a revenue target of VND 20,500bn and NPAT target of VND 244bn, representing growth of 8% and 11% compared to 2024, respectively. In Q1 2025, net revenue reached VND 4,016bn, down 5.9% YoY, while NPAT rose to VND 45bn, up 13.6% YoY, thanks to a recovery of gross profit margin (GPM).  

Investment Rationales

We believe that PET could be an interesting profile that could add alpha factor to the investors’ portfolio.

o       PET has maintained a consistent revenue growth rate of 13.7% annually over recent years thanks to its solid positioning in the businesses that it takes part in.

o       NPM of PET has a good chance of improving from a low base.

o       Robust balance sheet and compelling valuation for long-term upside. 

o       The possible state divestment may serve as a major catalyst to re-rating PET’s valuation.

We use DCF, EV/EBITDA multiples and P/E multiples to evaluate PET share. With respect to the Cape Pearl project, we use DCF to value the project at VND 1,154bn. We conservatively apply a discount of 50% for the project and added valuation to the core business. We inititate a BUY recommendation with a 12M Target price of VND 28,000/share, representing an upside potential of 36.6% compared to the closing price of VND 20,500/share as of May 8, 2025. Our valuation model derives a 3Y Target Price of VND 41,700/share, an upside 103.4%.