X-Stock | LCG VND11,700 +27%: Q1/2026 Earnings Update

Detailed report

In Q1/2026, LCG recorded net revenue of VND 341 billion (-20% YoY) and NPAT-MI of VND 16 billion (-22% YoY). Key highlights include:

1. Net revenue declined by 20% YoY, mainly due to:

• Construction revenue reached VND 298 billion (-26% YoY). BSC believes the decline was driven by: (1) Q1 typically being the low season for construction activities; and (2) raw material shortages affecting project execution progress.
• Revenue from merchandise sales and other activities reached VND 43 billion (+440% YoY), possibly driven by a significant increase in the company’s supplying-materials activity to contractors during construction and the sale of solar power EPC contracts.

2. Gross margin reached 11% (-2 ppts YoY). BSC believes the decline mainly came from the construction segment, as: (1) Q1 is typically the low season; and (2) LCG’s major projects are currently focused on ground treatment works, which carry thinner margins than the finishing stage toward project completion.

3. Profit from associates reached VND 9.5 billion, compared with no contribution in the same period last year, mainly from BOT Bac Giang – Lang Son after it stopped recording losses in 2025. Accordingly, NPAT-MI declined by 22% YoY, mainly due to lower profit from the construction segment.

ASSESSMENT OF Q1/2026 EARNINGS

1. Net revenue and NPAT-MI completed 9.5% and 9.4% of BSC’s forecasts, respectively.
2. Although Q1 earnings were lower than BSC’s forecast, we view this as a timing issue, as revenue and profit are expected to be mainly recognized from Q2 through the end of the year, with average quarterly profit expected to be 2–3 times higher than in Q1.
3. Raw material shortages since the beginning of 2026 have affected project execution progress. In addition, major projects in 2026, such as the Hung Yen Heritage Road and the Quy Nhon – Pleiku Expressway, are still in the land clearance and ground treatment phases, and therefore have not yet contributed to revenue and profit in Q1. BSC expects these projects to reach their key recognition periods in Q2 and Q4/2026.