HHV Flash note

DEO CA TRAFFIC INFRASTRUCTURE INVESTMENT JSC (HHV VN)

HHV’s 9M2026 results were in line with expectations, prompting us to maintain our FY2026–2027 earnings forecasts. We remain positive on FY2027, expecting double-digit earnings growth, supported by 8–10% annual traffic volume growth and a robust construction pipeline driven by accelerating public investment. Additionally, nearly VND7tn in government funding for the Bac Giang–Lang Son Expressway and Deo Ca Tunnel projects, potentially disbursed in late 2026 or early 2027, could ease financial pressure amid elevated interest rates. We maintain our BUY recommendation with an end-2027 target price of VND14,000/share, revised down 12% from our previous report to reflect a higher discount rate.

• 9M2026 earnings growth remains on track with forecasts: HHV estimates revenue of VND2.98tn (+15% YoY) and net profit of VND564bn (+18% YoY), fulfilling 67% and 74% of its full-year targets, and 68% and 74% of our forecasts, respectively. BOT toll collection remained the key driver, contributing VND1.85tn (+15% YoY; 62% of revenue), supported by higher traffic volumes from improved North–South Expressway connectivity. Construction revenue reached VND893bn (+7% YoY; 30% of revenue), mainly from major expressway projects.

• Persistent input-cost pressures: HHV is mitigating material-price volatility through supplier diversification, price-stabilization contracts, increased subcontracting and BIM adoption to optimize construction efficiency and working-capital management. However, the effectiveness of these measures remains to be tested amid elevated material costs.

• Public investment supports long-term order-book expansion: With Vietnam’s 2026–2030 public investment plan estimated at VND8.22 quadrillion, HHV and Deo Ca Group are proposing nine PPP projects worth ~VND231.5tn, while evaluating another nine potential projects totaling VND186–189tn. However, conversion into secured backlog remains subject to project approvals, financing arrangements and execution timelines.
•  Potential government support to ease financial pressure: Nearly VND7tn in government funding for the Bac Giang–Lang Son Expressway and Deo Ca Tunnel projects is pending procedural completion. According to management, the funding could be disbursed in late 2026 or early 2027, potentially easing the company’s financial burden amid elevated interest rates.