Vincom Retail (HOSE: VRE) | Q1 2026 Update, ADD - 1Y Upside +10.4%

Robust Earnings Driven By Expanding Gross Profit Margin

VRE reported net revenue of VND 2,294bn (+7.6% YoY, -0.8% QoQ). Year-on-year growth was primarily supported by a recovery in foot traffic (+12-13% YoY) and strong performance from tenants under revenue-sharing agreements (+23-25% YoY). However, revenue declined slightly by 0.8% sequentially due to a contraction in the real estate transfer segment.

NPAT-MI reached VND 1,606bn, representing an impressive 36.4% YoY increase (after adjusting for one-off items). The net profit margin expanded significantly to 70% (from 55.2% in the same period last year) despite a slight compression in the leasing NOI margin to 70.4%. This earnings surge was largely driven by a one-off gain of  VND 184bn (+1,291% YoY) from the disposal of investment properties (non-mall assets). Additionally, financial income grew sharply (+33.7% YoY) amidst a high deposit interest rate environment, while financial expenses were optimized (-15.5% YoY), fully offsetting the decline in operational margins.

We updated our revenue forecasts for FY2026 down to VND 10,222bn (-6.7%) and FY2027 up to VND 11,905bn (+1.0%), reflecting slower shophouse deliveries, and increased rental rate assumption for VCC and VMM to reflect the revenue-shared shops. Conversely, we raised NPAT-MI goals because we added "Other Income" from rent and penalties, which usually adds VND 465–566bn yearly.

Consequently, we have raised our target price from VND 34,600 to VND 37,200/share. With a 10.4% upside from the current price of VND 33,700 (as of May 4, 2026), we reiterate our ADD rating for VRE.

Q1 2026 performance

o       Revenue: VND 2,294bn (+7.6% YoY, -0.8% QoQ)

o       Profit Before Tax: VND 1,999bn (+35.5% YoY, -40.1% QoQ).

o       NPAT-MI: VND 1,606bn (+36.4% YoY, -39.6% QoQ).

o       Core NPAT-MI: VND 1,606bn (+36.4% YoY, +40.2% QoQ), exclude one-off gain from Vincom Nguyen Chi Thanh of VND 1,891bn in Q4 2025.