Quang Ngai Sugar (HOSE: QNS) | Initiation Report, BUY - FW2026 Upside +42.8%

Company Information

Quang Ngai Sugar JSC (QNS, listed on UPCoM) is one of Vietnam’s leading agro-food companies, with core businesses spanning sugar production, branded soymilk, and selected food & beverage products. Established from the former Quang Ngai Sugar Factory, the company has evolved from a traditional sugar producer into a diversified consumer and agri-processing group with nationwide reach.

Financial Performance

During 2020–2024, QNS’s net revenue and NPAT grew steadily with CAGR of 12.1% and 22.6%, reaching VND 10,243 bn and VND 2,376 bn in 2024, respectively. Growth was supported by two main drivers: (i) the soymilk segment maintained its leading position with high margins and consistently rising output; and (ii) the sugar segment rebounded strongly from 2022 onward as trade measures from the goverment helped stabilize and recover the domestic sugar market.

In 2025, QNS recorded revenue of VND 10,573bn (+3.2% YoY), of which the revenue from soymilk segment increased to VND 4,803bn (+15.1% YoY) , while the sugar segment declined to VND 3,629bn (-7.9% YoY), mainly due to lower sugar prices. NPAT reached VND 1,923bn (–19.1% YoY) due to a 45.3% decline in sugar NPAT to VND 570bn, while soymilk NPAT rose 14.0% YoY to VND 1,003bn. 

QNS possesses a solid financial structure, low risk profile, and ample capacity for future investment expansion. Total assets reached VND 14,362bn (+4.0% YTD), with cash and short-term financial investments,  mainly in bank deposits, increased to VND 272bn and VND 8,132bn (+11.4% YTD) respectively. Total liabilities reached VND 3,710bn (-2.6% YTD), with short-term borrowings accounting for 68.4%, or VND 2,536 bn (-6.5% YTD)

Investment Rationales

While QNS may not be suitable for growth investors, we think QNS offers an attractive risk-return profile for long-term, value investors at discount valuation and good dividend yield. Our key investment rationales for QNS include:

o Sustained market leadership in the soymilk segment.

o While revenue from sugar fluctuates, QNS’s sugar gross profit margin is likely to be stable thanks to its control of raw materials

o   Strong balance sheet, superior dividend policy, and attractive valuation

o Margin tailwinds from lower raw-material costs, strong balance sheet, and attractive shareholder returns.

o    Potential strategic exit in 3-5 years horizon.

Valuation and Recommendation

We apply a combination of DCF and P/E valuation methodologies to derive a FW2026 target price of VND 66,100/share for QNS. This implies a 34.6% price upside from the closing price of VND 49,100 per share as of February 09, 2026. Including an expected cash dividend of VND 4,000 per share, the total expected shareholder return increases to 42.8%. Accordingly, we initiate coverage on QNS with a BUY recommendation.