Vincom Retail (HOSE: VRE) | Initiation Report, BUY - FW2026 Upside 23.7%

Company Information

Vincom Retail JSC (VRE) is Vietnam’s leading and only listed pure-play retail commercial real estate developer and operator. Established in 2012 and listed on HOSE in November 2017, VRE owns and manages a nationwide network of retail shopping malls under four brands, including Vincom Center, Vincom Mega Mall, Vincom Plaza, and Vincom+. Its retail portfolio totals over 1.8 million m² GFA, the largest in Vietnam.

VRE was previously a subsidiary of Vingroup (VIC). In 2024, VIC divested its entire stake in SDI, the entity that owned 99.9% of SADO trading JSC, which directly owned a 41.5% stake in VRE. Following this transaction, VIC’s direct ownership in VRE decreased to 18.8%. Despite the divestment, VRE continues to benefit from strong ecosystem support, particularly from Vinhomes and other Vingroup entities, which provide prime landbank access and an integrated customer base.

Financial Performance

From 2021 to 2024, VRE delivered a CAGR revenue of 12.3%, supported by stable leasing performance. In 2024, total revenue reached VND 8,939bn, down 8.7% YoY with leasing revenue amounting to VND 7,878bn (+1.0% YoY). The slow growth reflects cautious consumer sentiment in early 2024, which prompted retailers to adjust their business strategies, including optimizing leased space, which affected VRE’s occupancy in the first half of 2024. Property sales arrived at VND 839.2bn in 2024 (-52.6% YoY), as VRE handed over only 167 units at Royal Park Quang Tri in 2024, compared to 346 units shophouse handovers in 2023.

For 9M2025, revenue reached VND 6,525bn (-4.2% YoY) due to the absence of real estate transfer revenue while leasing revenue remained resilient, rising 6.3% YoY. Gross profit margin (GPM) improved from 52.2% to 54.0%, while net margin increased remarkably from 44.2% to 58.0%, driven primarily by a 69.9% YoY surge in financial income, which is largely contributed by interest income from loans to related parties.

At the end of Q3 2025, total assets stood at VND 61,265bn (+10.9% YTD), with investment properties accounting for 44.5% of the asset base. Cash and cash equivalents amounted to VND 2,809bn (-2.6% YTD). The cash ratio declined from 0.49x to 0.34x, indicating a tighter short-term liquidity buffer during the expansion period.

Total liabilities increased to VND 15,555bn (+16.9% YTD), representing 25.4% of total assets, of which total interest-bearing debts stood at VND 6,400bn (+41.3% YTD). Total equity rose to VND 45,710bn (+9.0% YTD). VRE’s D/E ratio edged up from 0.32x to 0.34x, remaining comfortably within a low-leverage profile. Profitability metrics remained healthy, with ROA and ROE at 6.5% and 8.6% respectively, supported by strong contributions from financial income.

Investment Rationales

1. Favorable Macroeconomic and Demographic Tailwinds:

o       Rapid Urbanization Expanding Retail Demand: Vietnam’s urbanization rate has risen to 38.2% in 2024 and is projected to exceed 50% by 2030, broadening the geographic base of retail consumption across emerging hubs such as Hai Phong, Da Nang, and Binh Duong.

o       A Fast-Growing Middle Class Driving Consumption: Vietnam is expected to add 36 million middle-income consumers by 2030, with roughly two-thirds of the population earning over USD 11/day, which support sustained growth in demand for higher-quality goods, dining, entertainment, and lifestyle experiences.

o       Structural Undersupply of Modern Retail Space: With only ~0.3 m² of retail Net Leasable Area (NLA) per capita, far below regional peers, Vietnam faces persistent supply constraints, keeping occupancy high (91–93%) and supporting steady rental growth across major cities.

2. Market Leadership with Unmatched Scale: VRE is Vietnam’s largest retail mall operator by total GFA and nationwide presence. Its extensive footprint across Tier-1 and Tier-2 cities enables superior tenant access, stronger bargaining power, and network effects that competitors cannot replicate.

3. Strategic Synergy with Vinhomes Township Pipeline: VRE is uniquely positioned to capture commercial demand from Vinhomes (HOSE: VHM) expanding mega-townships, benefiting from built-in residential populations, strong fundamentals, and access to prime retail land. This integration shortens ramp-up periods and provides long-term visibility for mall performance.

4. Ongoing Asset Upgrades Supporting Competitiveness:The company continues to upgrade legacy assets by expanding F&B, entertainment, and experiential offerings. These initiatives enhance customer engagement, improve tenant mix, and strengthen rental performance while extending the useful life of older malls.

5. Resilient and Diversified Anchor Tenant Base: A strong roster of anchors such as CGV, Uniqlo, Zara, Decathlon, and leading F&B chains, supports consistent foot traffic and reduces vacancy risk. This anchor stability boosts leasing momentum for smaller tenants and reinforces VRE’s defensibility against e-commerce substitution.

Valuation and Recommendation

We value VRE sum-of-the-parts approaches, capturing contributions from both its core commercial retail leasing operations and its property development activities and P/Book with weight of 70% and 30% for each approach. Based on this framework, we initiate coverage with a BUY recommendation and a 2026 target price of VND 33,950/share, representing 23.7% upside relative to the closing price of VND 27,450/share as of 12 December 2025.