BSC Vietnam Sector Outlook 2Q2025_EN

Dear Value Investors,

Following the successful release of the Vietnam Sector Outlook Q1 Report, BSC is pleased to present the Q2/2025 Sector Outlook Report. This report provides a detailed analysis of market developments during Q2, particularly focusing on the period of robust market rebound as tariff tensions eased.

The market experienced a notable recovery, albeit an uneven one. Blue-chip stocks within the VN30 group significantly outperformed their mid- and small-cap counterparts. Following a period of volatility, the VN-Index staged a substantial rebound, narrowing its decline to -3% from a trough of -17%. This recovery exhibited clear sectoral divergence, with export-related sectors, industrial parks, and basic materials lagging, while more resilient segments such as banking, industrials, utilities, real estate, and retail showed stronger performance. Market liquidity also displayed a defensive tilt, concentrating on large-cap stocks and industry leaders, with the VN30 group recording a YTD return of -2% compared to a -6% decline in mid- and small-cap stocks.

Post-Q1/2025 earnings, the VN-Index maintains an attractive valuation relative to historical levels, trading just above -1 standard deviation (Trailing P/E = 12.72x). Concurrently, the P/B ratio is also near a 4-year historical low (Trailing P/B = 1.64x).

In a highly volatile environment, the investment strategy should prioritize micro factors (company fundamentals) over attempts to predict uncertain macro policy shifts. BSC highlights several key considerations and investment themes for stock selection:

• Top-down Approach: Prioritize stocks in sectors with less exposure to trade tensions that stand to benefit from government support policies (e.g., public investment, credit growth, VAT cuts, Resolution 68-NQ/TW on private sector development, tourism).
• Valuation Aligned with Earnings Growth: Target companies with solid fundamentals and sustainable profit growth, where forward P/E is expected to adjust in line with earnings momentum.
• Sectors poised to benefit from the narrowing trade deficit with the U.S. and declining commodity price trends.
• Companies with high exposure to robust domestic demand, supported by resilient local consumption.
• Defensive stocks providing high dividend yields, acting as safe havens during turbulent periods.
• Tactical opportunities for high-risk appetite investors: Exploring short-term plays in deeply discounted sectors most impacted by tariffs.

Investors are encouraged to download the full report for more detailed information.

BSC is committed to providing valuable insights to support your investment decisions and wishes all investors an effective and successful investment quarter!

Sincerely, BSC