QNS – Expecting the headwinds of the sugar industry to gradually pass
• In Q2-2025, QNS recorded net revenue of VND 2,956 bn (+4.8% YoY), and NPAT-MI of VND 546 bn (-20.9% YoY), primarily due to subdued growth in the sugar industry, marked by limited increases in both sales volume and selling price compared to the prior year. This overshadowed the strong performance of the milk segment within the overall financial contribution.• With the milk segment demonstrating robust performance in both revenue and net margin, the potential for QNS's stock price appreciation/depreciation hinges significantly on the sugar segment. We are optimistic that QNS will boost sugar output in the upcoming quarters, aligning with its production and business strategy, particularly as the company has expanded its planting area and enhanced sugarcane processing efficiency in the crop 2024-25 season.
• We expect that the headwinds in the sugar industry will gradually be overcome (large amount of smuggled sugar/domestic inventory or weak demand from the impact of Decree 70), supporting selling price and sales volume for QNS to gradually improve QoQ in 2025.
• In the scenario of sugar price remaining in the area of 18,400-18,600 VND/kg, equivalent to the time when anti-dumping and anti-subsidy with Thai sugar take effect (Aug-2023), the target price for QNS according to our forecast is 56,100 VND/share (including cash dividends), equivalent to the ACCUMULATE recommendation.
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