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INVESTMENT OUTLOOK ON EARNINGS SEASON: DON'T LOSE SIGHT OF THE GOAL

The investment picture is changing rapidly and as we enter the new quarter, equity market investors continue to face numerous uncertainties surrounding the potential impact of the US administration's tariff policy on the global economic outlook. Investor concerns over "what kind of tariff deal will Vietnam secure in the negotiations?" keep market in a volatility mode a at least until an agreement is reached.
As an economy heavily dependent on international trade, particularly Vietnam's reliance on the US for exports and China for imports, the impact of tariff shocks on global trade will pose a challenge to the country's high growth ambitions this year, especially in 2H2025. The tariff issue will continue in the near term, but the final figures remain within a wide range and negotiations are likely to be protracted. In the short term, this event will have a direct negative impact on trade and an indirect impact on investment and consumption, as well as posing challenges for monetary policy management. It also marks an increasingly evident competition between the US and China to establish a new economic order, which will require adaptation. Vietnam, however, has the space and willingness for a transition with a longer-term vision.
In terms of monetary policy, although it has not yet been affected by tariff factors in the short term, these factors will still pose challenges if the situation shifts from "uncertain" to "negative" with significantly high tariff rates. As such, the trade balance is likely to change rapidly, impacting foreign capital flows and exchange rate pressures, thereby narrowing the room for monetary policy management in a direction that supports the economy with good liquidity and low interest rates as currently maintained.
For the stock market in particular, the launch of the KRX system in early May, after 15 years of anticipation, will mark a new milestone for the market. We believe this event is not only a technical milestone, but also a strategic step forward that will enable Vietnam to improve the quality of its market infrastructure in line with international standards and set the stage for a market upgrade in 2025.
In terms of the business outlook for companies, we believe that the impact of tariffs on earnings growth in 2025 is not yet significant. In Q2 2025, we estimate that overall market business performance will grow by 14% YoY, with the real estate sector being the main driver of growth momentum due to a low base from the same period last year. Meanwhile, the non-financial sector and the banking sector are expected to slow down, affected by declining confidence in manufacturing and consumption and pressure on net interest margins (NIMs), respectively.
The cumulative EPS for the last four quarters (to Q1/2025) of the market is estimated at VND103.7 (+18.5% YoY). Historically, the P/E range of the VNIndex tends to fluctuate between 10.0x and 13.3x during periods when the economic growth outlook faces challenges. Within this range, the VNIndex is estimated to fluctuate between 1,037 and 1,379 points