• We attended PLX’s annual general meeting (AGM) on April 25. Overall, management shared a cautious short-term outlook given current oil price fluctuations. Despite that, they remain committed to maintaining sales volume growth momentum and pushing ahead with cost-saving. 
• Shareholders approved conservative 2025 PBT guidance of VND3.2tn (-19% vs 2024A, equivalent to 68% of our full-year forecast). This conservative guidance is due to the 2025 guidance being based on the remainder of the 5-year plan (2021–2025). Actual 2023/2024 PBT was higher than the guidance by 22% and 37%, respectively.
• PLX shared that its Q1 2025 performance was hit by a sharp oil price drop following US reciprocal tariffs. While management sees continued price volatility ahead, they remain committed to meeting full-year guidance through cost-saving efforts.
• Shareholder sapproved PLX raising the 2024 cash dividend to VND1,200/share (3.6% yield),  vs recent  guidance of VND1,000, but still lower than our current projection of VND1,500/share. Shareholders also approved a 2025 dividend at a ratio of 10% (cash or stock has not been determined yet) vs our forecast for VND2,000 DPS, in line with PLX’s historical average (VND2,000/share over the past nine years, within a range of VND700–3,200/share).
• PLX shared that the draft petroleum decree under final MoIT review proposes a shift to market-determined pricing, allowing major distributors to set retail prices based on actual costs. We see this changes more favorable than the August 2024 draft with no ceiling price and no regulated profit
• PLX is progressing with its restructuring plan, targeting full divestment of Petrolimex Laos and reducing its stake in PLC to maximum 51% by end-2025 (a final decision on PLC divestment or capital raise expected in Q2 2025).
• Our view: We see downside risk to our earnings forecast due to potentially weak Q1 2025 results following the sharp oil price decline, pending a full review.

1. Conservative guidance with 2025 PBT decreasing 19% YoY

- Sales volume: Total sales volume (including re-export) is 17.0 million tonnes in 2025 (+8% vs 2024A, +31% vs 2024G, and 105% of our full-year forecast). The target aligns with the Ministry of Industry and Trade (MoIT)’s Vietnam petroleum demand growth estimate of 8% for 2025. Historically, PLX’s actual sales volume was higher than its initial guidance by an average of 8% in 2014-2024. 4M 2025 preliminary domestic sales volume reached 3.70 million tonnes (+4.8% YoY), equivalent to 33% of our full-year forecast, in line with our expectation. We see insignificant changes to our volume forecast, pending further review.

- Revenue: VND248bn (-13% vs 2024A; +32% vs 2024G; 96% of our full-year forecast). We believe PLX assumes lower oil prices in its planning, affecting average selling price, which outweighs the higher sales volume.

- Profit before tax (PBT): PLX guides 2025 PBT of VND3.2tn (-19% vs 2024A; +10% vs 2024G; 68% of our full-year forecast). Despite expectations for lowering operating costs by 20% and volume growth by 8%, management explained that the 2025 guidance is based on the remainder of its 5-year plan (2021–2025), making it mathematically conservative. Notably, actual 2023/2024 PBT was higher than its guidance by 22% and 37%, respectively. 

2. Weak preliminary Q1 2025 results and short-term outlook

- PLX noted that its preliminary Q1 2025 performance was negatively impacted by the sharp decline in oil prices. While detailed figures were not disclosed, management shared that following the US reciprocal tariff announcement on April 2, Brent crude fell rapidly from USD75/bbl to below USD60/bbl by April 8—a drop of 20%. This unexpected decline resulted in an estimated VND1tn revenue loss during the April 10 retail pricing adjustment cycle, and a further VND300bnloss during the April 17 cycle, due to inventory being sold at prices lower than cost.

- For the remaining of  2025, management emphasized that oil prices will remain highly volatile. Mixed global signals, particularly in response to US–China trade tensions, have created instability in the global oil market. Despite viewing 2025 as a high-risk year for oil price fluctuations, PLX remains committed to meeting its full-year guidance through continued cost-saving efforts.

3. Developments of the new decree proposal: Shifting toward market-determined pricing.

- Regulatory status: The draft decree is still under review by the Ministry of Industry and Trade (MoIT), with feedback being collected from major petroleum distributors and the Vietnam Petroleum Association (VINPA) before final submission to the Government.

- Retail price mechanism: PLX noted a major shift toward market-determined pricing. Under current decree, all petroleum distributors sell at base price, which is calculated by the Government. Under the the latest draft petroleum business decree (based on the opinion of the Government’s Standing Committee on April 13 and under final review by the Ministry of Industry and Trade). The State will now only publish a price formula, international reference price, premium, and regulated operating cost. Each distributor will calculate and declare their own retail prices based on actual input sourcing costs and others.

- Enhanced oversight: The draft requires distributors to connect inventory and transaction data with the MoIT, which supports preventing virtual or illegal trading. Additionally, all distributors must issue e-invoices by April 30, 2025; those who fail to comply may have their licenses revoked. PLX sees this as a positive change that will create a more transparent and fair environment, benefiting compliant distributors.

- Our view: This version of the decree is more favorable than we had previously assumed under the August 2024 draft, pending a fuller review.

4. Petrolimex restructuring plan update:

- Petrolimex Laos Divestment: PLX is in the process of divesting its 100% stake in Petrolimex Laos. The first auction on April 8 was unsuccessful. A second auction is scheduled for May 8, with the aim of completing the divestment by end-2025.

- PLC Divestment: PLX plans to reduce its stake in Petrolimex Petrochemical Corporation (PLC) from 79.07% to a maximum of 51% by end-2025. PLX's capital representative group at PLC has been tasked with drafting divestment options. A capital raise is also being considered as an alternative. Both options are aimed at attracting strategic investors, with a final decision expected in Q2 2025.

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