Companies listed on the Ho Chi Minh City Stock Exchange (HoSE) are projected to see an average 18-20% profit growth in 2025, and its benchmark index, the VN-Index, will reach approximately 1,450 points in the second half, according to Agribank Securities (Agriseco).

Vietnam is currently one of the stock markets with the lowest P/E ratio in the region. Photo by The Investor/Trong Hieu.

Last Friday, the last trading day before the Lunar New Year holiday, the VN-Index rose over 5 points to 1,265.

According to Agriseco, the index is currently trading at a price-to-earnings (P/E) ratio of around 13 times and a price-to-book (P/B) ratio of 1.7 times, both of which are below the market’s five-year averages of 14.5 times and 2.0 times, respectively. Notably, the P/B ratio is at its lowest level in the past five years.

Given the current P/E ratio, Agriseco believes that the VN-Index is one of the most undervalued markets in the region. Additionally, Vietnam’s market shows a higher return on equity (RoE) compared to the regional average, indicating that Vietnam’s stock market is relatively attractively valued.

Agriseco is optimistic about the market’s prospects for 2025, with strong economic growth and robust corporate earnings expected to drive performance. Furthermore, the anticipated upgrade by FTSE Russell from a frontier market to an emerging in 2025 is likely to attract both foreign and domestic investors.

The market is expected to see an influx of $5-6 billion from exchange-traded funds (ETFs) tracking FTSE indices and active funds then. Such an event will likely increase the number of foreign investors in Vietnam, benefiting securities firms such as Saigon Securities (SSI), Ho Chi Minh City Securities (HCM), and Viet Capital Securities (VCI), which manage a significant portion of foreign accounts.

Large-cap stocks such as Vietcombank (VCB), Vinhomes (VHM), FPT, and Hoa Phat Group (HPG) are expected to be in focus as foreign capital flows into the market.

Stock opportunities

Agriseco highlights real estate as a potential opportunity. Currently, the real estate sector is trading at a P/B ratio of 1.2x, which is lower than the five-year average of 2.4x. Since the beginning of 2024, the group has lagged behind the VN-Index, with prices continuing to decline.

The most significant declines have been seen in small-cap stocks with poor earnings and high leverage. However, companies with strong land holdings and proven project execution capabilities have experienced good gains and are still undervalued relative to their business outlook for the next 2-3 years.

These present medium- to long-term investment opportunities. Notable undervalued stocks with growth potential for 2025 include VHM of Vinhomes, NLG of Nam Long Group, KDH of Khang Dien House, and NTL of Tu Liem Urban Development JSC.

Investors should focus on companies with projects in favorable locations benefiting from public investment, a proven track record of executing projects, full legal status on most projects, high absorption rates for some ongoing sales, projected strong sales growth, safe financials, and attractive valuations relative to their growth potential in 2024 and 2025.

In the banking sector, Agriseco believes that many stocks are now attractively priced. Listed commercial banks have seen an average price increase of 23% since the beginning of the year, reflecting optimism about the macroeconomic outlook and the banking sector’s business prospects. Despite outperforming the VN-Index, the industry currently trades at an average P/B ratio of 1.5x, lower than the five-year average of 1.8x.

With strong growth prospects, Agriseco says banks deserve better valuations and that their stocks are currently in an attractive price range for investment. However, opportunities will not be equal across all banks. Those with higher credit quotas than the industry average, sustainable growth, strong capital buffers, and good asset quality are likely to have more favorable prospects.

Additionally, the anticipated market status upgrade in 2025 is expected to attract foreign interest, especially in blue-chip stocks like those in the banking sector.

After weaker performance in 2024, the oil and gas sector is now trading at a lower P/B ratio than its two-year average. Agriseco expects the sector to see better performance in 2025, driven by positive profit growth as major domestic oil and gas projects enter a more active phase. Additionally, the completion of the fifth maintenance round at the Dung Quat refinery in the central province of Quang Ngai in 2024 is expected to improve sector dynamics.

In the steel industry, Agriseco notes that the enforcement of public investment and real estate laws will likely boost steel demand in the coming period. Furthermore, if Vietnam imposes anti-dumping duties on hot-rolled coil (HRC) and galvanized steel, it will enhance the competitiveness of domestic steel, increasing market share for leading companies.

The anticipated market upgrade, coupled with current low valuations, will provide strong growth drivers for securities firms. Vietnam’s stock market is likely to attract a large influx of new investors, driving liquidity and increasing trading volumes.

This is a positive signal for securities companies’ business prospects. Moreover, the sector’s current P/B and P/E ratios are at average historical levels, presenting potential for price appreciation and opportunities for strategic investors, particularly foreign ones, to enter the market in 2025.

FWD Vietnam Life Insurance Company Limited has been fined VND200 million ($7,975) for posting misleading information on its Facebook page, per a decision by the National Competition Commission (NCC) under the Ministry of Industry and Trade.

The headquarters of FWD Vietnam in Ho Chi Minh City, southern Vietnam. Photo courtesy of Cong thuong (Industry-Trade) newspaper.

According to the commission, FWD Vietnam was found to have misled customers with information about the company, its products, and services to attract customers from competitors.

This misinformation, posted on the company’s Facebook page, included statements such as “Number 1 brand for customer experience for four consecutive years in the life insurance industry in Vietnam”; “Insurance company with the fewest exclusions in the market”; “100% cashless payment with no paperwork”; “First insurance company distributing through e-commerce channels”; and “The most diverse and widespread distribution network in Vietnam.”

After reviewing the case, the NCC concluded that these actions violated Article 45 of the Law on Competition, which prohibits deceptive or misleading practices that could attract customers from other businesses.

However, the commission acknowledged that FWD Vietnam had proactively taken steps to mitigate the consequences of the violation, voluntarily reported the misconduct, and cooperated with the NCC in the investigation. This was also the first time the company had committed such a violation.

As a result, the NCC imposed an administrative fine of VND200 million ($7,975), the minimum level in the range subject to the violation (VND200-400 million) and ordered FWD Vietnam to publicly correct the misleading information on its Facebook page at https://www.facebook.com/BaohiemFWDVietnam/.

FWD Vietnam, under Asia-based Pacific Century Group, was licensed by the Ministry of Finance in 2016, with its headquarters located on the 11th floor of the Diamond Plaza building, 34 Le Duan street, Ben Nghe ward, District 1, Ho Chi Minh City.

It is known for its multi-channel distribution system, including bancassurance partnerships with major banks in Vietnam such as Agribank, Vietcombank, and HDBank.

On October 22, 2024, FWD Vietnam signed a partnership agreement with TC Advisors Joint Stock Company (TCA), making TCA the official distributor of its insurance products. Following the partnership, sales from this channel surged by nearly 500% year-on-year to VND90 billion ($3.6 million) in November 2024, and about 260% to VND75 billion in December 2024.

Techcombank, one of Vietnam’s major private lenders, is seeking shareholders’ approval to contribute capital for establishing a life insurance subsidiary regardless of a slowdown in the bancassurance sector.

The move came after Techcombank (HoSE: TCB) terminated a 15-year bancassurance partnership with Canada’s Manulife Vietnam in October 2024.

Life insurance sales in Vietnam have declined since the industry crisis in 2023. Bancassurance, once a key revenue stream for Techcombank, fell to VND606 billion ($24.15 million) in 2024, down from VND1.75 trillion ($69.75 million) in 2022.

A customer conducts transactions at a branch of Techcombank. Photo courtesy of the lender.

Following its separation from Manulife, Techcombank stated that it sees an opportunity to revitalize its insurance business with a differentiated strategy.

Additionally, Techcombank announced plans to seek shareholder approval to increase its stake in Techcom Nonlife Insurance JSC (TCGIns) beyond 11%, making it a subsidiary.

The Vietnamese life insurance sector’s premium revenue declined 5.5% year-on-year to VND132.2 trillion ($5.2 billion) in the first 11 months of 2024, according to the Ministry of Finance.

The local life insurance sector has experienced significant shifts over the past two years. The revised Insurance Business Law, effective from January 2023, and the finance ministry’s Circular 67, dated November 2, 2023, stipulates stricter regulations aimed at protecting policyholders’ rights.

Key changes include a ban on banks selling investment-linked insurance products within 60 days before or after a loan is disbursed and a requirement for insurance advisors to record consultations via audio or video.

The State Bank of Vietnam is also in the process of drafting Decree 88, which would impose administrative fines of VND400-500 million ($19,678) on banks found to link non-mandatory insurance products with their banking services.

Currently, there are 85 insurance companies operating in Vietnam, including 19 life insurers, with two domestic firms (Bao Viet and Bao Minh) and the remainder being foreign or joint-venture entities.