X-Alpha | DCM VND53,300 +16%: An Endless Golden Harvest

VALUATION VIEW

BSC upgrades its recommendation on DCM to BUY with a target price of VND53,300/share, implying a total expected return of +16%, including dividends. The new target price is 33% higher than in our most recent report, driven by a 79% upward revision to our 2026 NPAT-MI forecast after we significantly raised our assumptions for average selling prices and sales volume.

EARNINGS FORECAST

• BSC forecasts 2026 net revenue and NPAT-MI at VND19,405bn (+17% YoY) and VND2,766bn (+41% YoY), respectively, equivalent to EPS of VND3,549/share, 2026F forward P/E of 13.69x, and 2026F forward EV/EBITDA of 5.26x.
• Compared with our latest update report, our revenue and earnings forecasts have been revised up by 20.2% and 79.5%, respectively, mainly driven by: (1) a sharp upward revision to average selling price assumptions for urea and NPK by 16.4% and 15.8%, respectively; and (2) upward revisions to converted urea and NPK sales volume assumptions by 5.0% and 3.5%, respectively.

COMPANY UPDATE

Earnings update

Q4/2025 results: Net revenue reached VND4,528bn (+7% YoY, +52% QoQ), while NPAT-MI reached VND390bn (+38% YoY, +19% QoQ). Q4/2025 earnings were in line with BSC’s forecast, in which: (i) actual gross margin was more positive than expected, offsetting (ii) higher-than-expected G&A expenses, mainly related to management staff expenses and welfare fund provisions.

Investment view update — see our latest report

• Reversing our previous view, we raise our 2026 average urea price forecast by 10%–15% YoY: We shift our view from “earnings peaked in 2025” to a continued growth scenario, supported by: (i) supply disruptions at Hormuz together with insurance barriers; (ii) China’s export restrictions until the end of August 2026; and (iii) a 2mn-tonne deficit in India.
• Margin expansion and full-year benefits from tax policy: Gross profit is expected to improve as selling price increases outpace the rise in input gas costs. At the same time, the full-year application of the 5% VAT policy should help reduce production costs by 5%–7%

RISKS

(1) Lower-than-expected sales volume and average selling prices; regulatory policy pressure;

(2) Higher input gas prices due to exchange rate volatility and rising oil prices;

(3) Upside risk to our forecast: a prolonged and/or more severe geopolitical conflict.