Vinh Hoan Corporation (HOSE: VHC) | Initiation Report, BUY – 1Y Upside +15.0%

Company Information

Vinh Hoan Corporation (VHC) was established on December 19, 1997 in Dong Thap Province as a private company with an initial charter capital of VND 300mn. The company has achieved impressive growth and in 2007, VHC was officially listed on the Ho Chi Minh Stock Exchange (HOSE) under the ticker VHC. As of Q1 2025, charter capital has increased to VND 2,245bn.

Beyond processing and exporting frozen fillet pangasius, the company has expanded into high-value-added products and functional by-products, including collagen, gelatin, and fish oil. According to VASEP, VHC retained the number one position in Vietnam’s pangasius sector, holding a 14% market share with export value reaching USD 275.2mn in 2024.

Financial Performance

In Q1 2025, VHC reported net revenue of VND 2,648bn, a decline of 7.3% YoY but NPAT reached VND 211bn, up +11.8% YoY. The revenue decline was mainly driven by sharp drops in key markets, including China (–36.0%), the U.S. (–5.1%), and other regions (–18.9%), while the EU and Vietnam domestic market saw modest growth of 4.2% and 1.2%, respectively. The decline in revenue with input costs were pressured by high broodstock price caused gross profit margins to decline to 12.7%, from 15.1% at end of 2024.

As of the end of Q1 2025, VHC’s total assets reached VND 12,822bn, marking a 4.8% increase compared to the beginning of the year. On the liabilities side, total debt increased by 11.6% to VND 3,617bn, primarily driven by a rise in short-term borrowings to VND 2,486bn to support working capital needs.

Key Investment Rationales

o   Best-in-class market leadership & fully integrated operations

o   Robust sector outlook & diversified market growth in the long-term

o   Innovation-driven product portfolio & r&d leadership

o   Attractive valuation

Valuation and Recommendation

We apply the Discounted Cash Flow (DCF) method, EV/EBITDA, and P/E approaches to value VHC stock. We recommend BUY for VHC with a 12-month target price of VND 66,000/share, representing a potential upside of 15.0% compared to the closing price of 57,400 VND/share on July 3, 2025. Our 3-year target price is VND 94,650/share, implying an upside potential of 64.9%.