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BFC – Business results Q3/2025 – Hope hardship is over

• Revenue in Q3/2025 reached VND 2,059 billion (+1% YoY) as the estimated average NPK selling price increasing 16% YoY to 14,941 VND/kg, while production volume decreased 12% YoY due to floods and storms in September 2025. Q3/2025 gross margin reached 10.7%, slightly down from 14% in Q3/2024 and 11.7% in Q2/2025 due to input costs of increasing faster than the NPK selling price. NPAT-MI margin of Q3/2025 reached 3% compared to 2.6% in the same period, thanks to selling expenses and administrative expenses decreasing by 36%/33% YoY, respectively. As a result, Q3/2025 NPAT-MI reached 61 billion VND (+16% YoY).
• Net revenue in 9M2025 reached 8,148 billion VND (+18% YoY) and net profit after corporate income tax reached 269 billion VND (-5% YoY). Net revenue increased thanks to production volume reaching 593 thousand tons (+13% YoY) and the estimated average NPK selling price increasing 5% YoY.
• Business results in Q4/2025 are expected to be positive with Q4/2025 revenue estimated at VND 3,048 billion (+23% YoY) thanks to NPK selling prices expected to increase by 23% while consumption volume is expected to increase over the same period. NPAT-MI in Q4/2025 is estimated at VND 108 billion (+52% YoY)
• Revenue in 2026 is expected to reach VND 11,882 billion (+6% YoY) thanks to a 4% YoY increase in consumption volume and a slight 2% YoY increase in NPK selling prices. Gross margin is expected to be equivalent to the same period due to the increase in input cost costs according to the selling price of NPK. The ratio of selling expenses & management expenses to revenue is expected to be equivalent to the same period with selling expenses increasing by 7% YoY due to the need for advertising to increase consumption. Financial expenses are expected to decrease slightly by 11% with the expectation that businesses will reduce short-term loans. Since then, NPAT-MI in 2026 is estimated at VND 415 billion (+10% YoY).
• We find that the short-term valuation method for BFC in terms of P/B to ROE is appropriate because the correlation ratio between P/B and ROE of the business is 0.8 for the period January 2019 - October 2025. With an ROE of over 20%, BFC are typically paid at an average P/B of 1.8x. We will look at updating the target price in the most recent report.