PC1 - Loss from IP associated company weighs on Q1 earnings, but 2025F NPAT projection remains mostly unchanged

Q1 2025: Revenue was VND1,860bn (USD73mn, -14% YoY, 17% of our 2025F forecast), reported NPAT-MI was VND55bn (USD2.2mn, -32% YoY, 10% of our 2025F forecast), and core NPAT-MI was VND79bn (-43% YoY, 14% of our 2025F forecast).

We see insignificant changes to our 2025F reported NPAT-MI 2025 (VND568bn, USD22mn, +21% YoY) as (1) potential upside from Thap Vang sales may offset (2) losses from JVs (vs our projection for profit of VND30bn) and (3) higher-than-expected FX losses, pending a fuller review. Q1 is usually the low season for the power construction and steel pole segments. We currently have a BUY rating for PC1 with a target price of VND25,800/share.

Revenue contracted YoY mainly due to (1) 52%/27% YoY lower nickel/steel pole revenue, which outweighs respective (2) 21%/29% YoY higher revenue from power generation/power construction.
Blended GPM expanded 4.4 ppts YoY to 24.7%, mainly driven by (1) 13.1 ppts and 7.7 ppts YoY expansions from power generation and nickel, outweighing (2) a 3.2-ppts YoY contraction from power construction.
Core NPAT-MI decreased 43% YoY mainly due to a loss of VND15bn from join-venture companies Western Pacific vs profit of VND49bn in Q1 2024 while EBIT still grew 5% YoY. This was potentially due to lower IP land handovers from 30%-stake associated company Western Pacific amid President Trump’s reciprocal tariff.
Reported NPAT-MI fell at slower pace vs core NPAT-MI due to lower FX losses YoY.

We maintain our 2025 revenue and GPM projections for the power construction segment. Q1 2025 GPM for power construction contracted to 6.5% (-3.2 ppts YoY, -2 ppts QoQ), due to revenue recorded from low-margin equipment procurements while PC1 still guides for 2025 full-year GPM of 9% (higher than our projected 8.2%). Nonetheless, we maintain our 2025F revenue forecast of VND4.8tn (+30% YoY) as major contracts—including the Vung Tau–Con Dao submarine cables and Lao Cai–Vinh Yen transmission lines—are scheduled for Q3–Q4 booking, with Q1 typically being a low season. Similarly, major steel pole revenue will stem from the Lao Cai–Vinh Yen project.

Upside from residential real estate segment: PC1 is completing construction of Thap Vang and expects to recognize VND200bn in PBT from bulk sales in Q4 2025, exceeding our VND100bn forecast for each of 2025F and 2026F, providing upside to our 2025F NPAT estimate.

Nickel revenue contracted YoY mainly due to lower sales volume, driven by lower nickel ore purity, per PC1, while we estimate ASPs to decrease slightly, by 3% YoY.

PC1’s Q1 2025 results

VND bn	Q1 2024	Q1 2025	YoY	% of Vietcap’s 2025F
Revenue	2,165	1,860	-14%	17%
Power construction*	564	730	29%	15%
Electric steel pole manufacturing	287	180	-37%	15%
Power generation	355	431	21%	25%
Real estate	18	4	-77%	1%
Nickel (57% stake)	478	228	-52%	20%
Nomura (70% stake)	120	133	11%	22%
Others	342	155	-55%	17%
Gross profit	439	459	5%	21%
Power construction*	54	47	-13%	12%
Electric steel pole manufacturing	29	22	-23%	19%
Power generation	179	274	53%	28%
Real estate	8	2	-74%	1%
Nickel (57% stake)	135	82	-39%	26%
Nomura (70% stake)	22	29	34%	19%
Others	12	3	-77%	10%
SG&A expense	-105	-108	3%	17%
Operating income	334	351	5%	23%
Financial income	44	37	-15%	27%
Financial expense	-270	-208	-23%	28%
In which: Interest expense	-181	-165	-9%	22%
In which: FX loss & others	-84	-40	-53%	N.M.
Income from JVs	49	-15	N.M.	N.M.
Other income	0	-1	N.M.	N.M.
PBT	157	163	4%	17%
NPAT before MI	129	145	12%	18%
Minority interest	-49	-90	85%	35%
Reported NPAT-MI	81	55	-31%	10%
NPAT-MI (core)**	139	79	-43%	14%

Source: PC1, Vietcap (* Power-related construction segment includes grid erection & installing activities and EPC contracts for renewable energy projects. Others mainly include low-margin machinery trading; ** Excluding one-off gains and unrealized FX losses)