Phuoc Hoa Rubber (HOSE: PHR) | Q1 2026 Update, ADD - 1Y Upside +13.8%

Rising Costs Offset Asp Gains; Compensation Income Becomes The Primary Earnings Anchor

PHR delivered a robust top-line performance in Q1 2026, with net revenue climbing 50.3% YoY to VND 468bn. This growth was primarily fueled by both increase in rubber average selling price (ASP) and increase in sale volume with finished goods inventory declined to VND 108bn as of Q1 2026 from VND 198 bn at the beginning of the years.

Despite the strong revenue momentum, the gross profit margin (GPM) of rubber products experienced a notable contraction, falling from 27.1% in Q1 2025 and 34.1% in Q4 2025 to 23.7% in Q1 2026 primarily driven by higher input costs and seasonal labor expenses. Elevated oil prices increased fertilizer and chemical costs, which gradually lifted COGS under the weighted average method and offset gains from higher ASPs, while Tet bonuses and 13th-month salary expenses further pressured margins. Consequently, the total GPM  moderated to 31.9%.

 Despite these operational pressures, NPAT-MI surged 192.2% YoY to VND 279bn thanks to the  other income of VND 233bn from land compensation, of which VND 95 bn came from the VSIP III project and VND 135.8 bn from the Thaco project.

On the balance sheet side, short-term deposits increased 18.6% YTD to VND 1,967bn, as the company is optimizing return amid a favorable deposit rate environment. Meanwhile, other receivables surged to VND 248bn, as compensation income recognized on the P/L but not yet collected in cash.

At 2026 AGM, PHR has set a 2026 guidance for revenue of VND 2,276bn (+26.8% YoY) and NPAT of VND 762bn (+43.3% YoY). In April 2026, PHR received the formal land recovery decision for the VSIP III project. This legal milestone is critical as it clears the way for continued compensation payments and allows VSIP III to hand over land to investors.

Q1 2026 Performance

·       Net Revenue: VND 468bn (+50.3% YoY, -6.1% QoQ)

·       Profit Before Tax: VND 353bn (+210.8% YoY, +344.9% QoQ)

·       NPAT-MI: VND 279bn (+192.2% YoY, +314.0% QoQ).

Recommendation

We maintain our FY2026 and FY2027 revenue forecasts at VND 2,034bn (+13.3% YoY) and VND 2,923bn (+43.8% YoY), respectively. NPAT-MI is projected to reach VND 990bn (+92.8% YoY) in FY2026 and VND 1,118bn (+12.9% YoY) in FY2027, with earnings growth anchored by substantial "other income" from land compensation at VSIP III and THADICO.

We revised our recommendation to ADD from BUY, reflecting limited remaining upside with 12-month target price of VND 72,700, implying 13.8% upside from the current price of VND 63,900 (as of May 9, 2026).