PC1 Group (HOSE: PC1) | Q1 2026 Update, BUY - 1Y Upside +36.0%

Core Earnings Remained Resilient But Governance Uncertainty Becomes Key Overhang

PC1 reported Q1 2026 revenue of VND 2,168bn (+16.5% YoY),mainly driven by (i) a 31% YoY increase in EPC construction revenue to VND 957bn, and (ii) VND 181bn of revenue recognized from the Thap Vang project. Revenue came with 13.9% of management guidance and 14.1% of our forecast.

Consolidated gross profit margin (GPM) declined to 21.6% (-3.1% YoY, +0.4% QoQ), mainly due to (i) a higher revenue contribution from the EPC construction segment, which accounted for 44.1% of total revenue in Q1 2026 versus 39.2% in Q1 2025 with a relatively low GPM of 5.1% (-1.4% YoY), and (ii) a 5.3% YoY decline in the power segment’s GPM to 58.3% amid weaker hydropower output. Meanwhile, nickel mining GPM partially recovered to 37.4% (+5.8% QoQ), mainly supported by higher average selling prices for nickel.

NPAT-MI surged 227.5% YoY to VND181bn, mainly driven by a one-off financial gain related to the divestment of CT2 Real Estate Investment JSC, in which PC1 previously held a 49% stake. Excluding one-off gains and FX-related impacts, we estimate core NPAT-MI at VND 100bn (+26.6% YoY), mainly supported by stronger contributions from the real estate and nickel mining segments. Following Q1 2026 results, PC1 completed 18.8% of our FY2026 NPAT-MI forecast and 17.1% of management guidance; excluding one-off gains, completion rates would be 9.5% and 10.4%, respectively.

At AGM 2026, PC1 set FY2026 guidance for revenue of VND 15,618bn (+19% YoY) and NPAT-MI of VND 1,056bn (+22% YoY), supported by positive outlooks for renewable energy and industrial parks. Segment revenue targets include EPC at VND 7,000bn (+4% YoY), energy at VND 1,700bn (-7% YoY), and nickel mining at VND 1,200bn (flat YoY).

PC1 also plans to issue ~61.7mn shares as a 15% stock dividend for FY2025, alongside 2026 rights offering of up to 74mn shares (~18% of outstanding shares) at VND 20,000/share to raise ~ VND 1.5tn for renewable energy projects, the PC1 Gia Lam project, debt repayment, and working capital. The company also plans to issue >12.3mn ESOP shares (~3% of outstanding shares) at VND 10,000/share with a two-year lock-up period.

Recent Arrest Of Key Personnels

On 15 May 2026, seven senior executives of PC1, including the Chairman and CEO were arrested for investigation linked to accounting violations associated with the 500kV transmission line projects, where PC1 served as a key EPC contractor and steel structure supplier. The detention of four out of five Board members left PC1 without sufficient directors to legally approve major decisions, delaying Q1 financial reporting and intensifying concerns over then normal operation of the business. After the news was released, investors sold aggressive on governance concerns, causing PC1 shares to decline 33% within one month, from around VND 26,000/share on 23 Apr 2026 to bottom at VND 16,600/share on 18 May 2026 before recovering to VND 19,050/share as of 28 May 2026.

We believe the market has factored in rising corporate risks to the current price. At the same time, PC1 still benefits from the long-term tailwinds in power infrastructure and industrial parks. PC1’s Supervisory Board plans to hold an extraordinary general meeting in July 2026 to appoint additional Board members and address matters under shareholders’ authority.

We think when the new BOD members are appointed, the company shall resume normal operations, though a delay of a few months would also affect the business performance in 2026 and new pipeline for 2027.

Consolidation Financial Performance

o       Revenue: VND 2,168bn (+16.5% YoY, ~14.1% of our  previous FY2026 forecast)

o       GPM: 21.6% (-3.1% YoY)

o       PBT: VND 310bn (+89.9% YoY, ~19.0% of our  previous FY2026 forecast)

o       NPAT-MI: VND 181bn (+227.5% YoY, ~18.8% of our  previous FY2026 forecast). Core NPAT-MI: VND 100bn (+26.6% YoY, ~10.4% of our previous FY2026 forecast)