HHV Update – BUY

DEO CA TRAFFIC INFRASTRUCTURE INVESTMENT JSC (HHV VN)

In 1H2025, HHV recorded revenue of VND1,682 bn (+11.9% YoY) and NPAT of VND324 bn (+40.7% YoY), fulfilling 46% and 58% of targets and achieving 44% and 57% of ACBS’s forecasts, respectively. We revise our 2025 net profit forecast upward by 14% to VND491 bn, driven by improved profit margins. Accordingly, we raise our FY2025 target price by 13% to VND18,200 per share, reflecting the positive outlook for the construction and BOT toll collection segments. We maintain our Buy recommendation.

Solid 6M2025 Business Results: In 2Q2025, HHV posted revenue of VND947 bn (+16.4% YoY) and net profit after tax (NPAT) of VND 151 bn (+21.7% YoY). For 1H2025, HHV’s revenue reached VND 1,682 bn (+11.9% YoY) while NPAT surged to VND 324 bn (+40.7% YoY). fulfilling 58% of the company’s annual plan and 57% of ACBS’s full-year forecast. Growth was evenly supported by both core business segments—BOT toll collection and construction.

• BOT Segment: This segment remained the primary revenue contributor in 1H2025, accounting for 63% of total revenue, with VND1,066 bn (+10.8% YoY). Growth was driven by a 15.9% YoY increase in PCUs, equivalent to 2.4 ml additional PCUs, alongside planned toll rate adjustments under its financial strategy. Most toll stations recorded traffic growth, with the Cam Lam–Vinh Hao expressway posting a standout increase of 276% YoY in 2Q2024. Other stations, including Bac Giang–Lang Son, Bac Hai Van, and Trung Luong–My Thuan, also achieved solid growth in the range of 10%–25% YoY. Conversely, traffic volume at the Ninh Loc station declined by 23.4% YoY, attributable to traffic diversion to the newly operational Van Phong–Nha Trang expressway.
• Construction Segment: This segment contributed 32% of total revenue in 1H2025, reaching VND524 bn (+5.2% YoY). The growth was driven by HHV’s accelerated execution progress at key national infrastructure projects such as the Dong Dang – Tra Linh Expressway, Huu Nghi – Chi Lang section, and the Quang Ngai – Hoai Nhon Expressway. Notably, the Quang Ngai–Hoai Nhon expressway (88 km) reached an estimated construction output value of approximately VND 10 trn, equivalent to 75% of total work volume, as of July 2025. HHV targets completion of the roadway section by September 30, 2025, and Tunnel No. 3 by December 31, 2025—eight months ahead of the contractual schedule.

Profit margins improved in 6M2025, with the consolidated gross margin rising 0.6 percentage points YoY to 46%, supported by both core business segments. The BOT toll collection segment’s gross margin expanded by 0.5 percentage points YoY to 67.4%, driven by higher traffic volumes and toll rates. The construction segment also saw gross margin improvement to 4.4%, from 4.0% in the same period last year, as the adverse impact of elevated costs from the Quang Ngai–Hoai Nhon project subsided.