X-Stock | TNG VND 25,500 +32%: Q1/2026 Earnings Update

EARNINGS UPDATE

Q1/2026 results: Net revenue reached VND 1,951 billion (+29% YoY), while NPAT-MI reached VND 60 billion (+39% YoY).

Revenue recorded positive growth thanks to orders being fully secured through September 2026, while the company is continuing to negotiate orders for October 2026. Key growth drivers include:

• Vietnam’s current reciprocal tariff rate is broadly in line with those of direct competitors such as India and Bangladesh, partly easing competitive pressure.
• TNG recorded signs of order expansion from new customers such as H&M, The North Face, and LIDL, while maintaining relatively stable orders from existing customers such as DCL, Columbia, and Sportmaster.

NPAT-MI grew faster than revenue thanks to operating cost savings and one-off income, despite pressure on gross margin.

• Gross margin declined from 15.2% to 12.1% (-3.0 ppts) due to: (1) higher labor costs after TNG adjusted wages for existing workers and recruited new labor; (2) input material cost pressure from oil price volatility; and (3) an order mix mainly consisting of simpler orders with lower profit margins.
• However, SG&A/net revenue declined from 8.0% to 6.3%, while TNG recorded VND 25 billion in other profit from insurance compensation for machinery and equipment. As a result, net profit margin improved from 2.9% to 3.1% (+0.2 ppts).

BSC’S ASSESSMENT

Q1/2026 net revenue and NPAT-MI completed 21% and 14% of BSC’s full-year forecasts, respectively, as Q1 is the low season, while gross margin came under pressure from raw material costs, labor costs, and a low-margin order mix. BSC believes revenue prospects in the coming quarters will be more positive, supported by: (1) secured orders, along with improved capacity and productivity following the recent labor recruitment; and (2) Vietnam’s reciprocal tariff rate being comparable to those of India and Bangladesh, helping limit the risk of order relocation.