HHV Flash note – BUY

DEO CA TRAFFIC INFRASTRUCTURE INVESTMENT JSC (HHV VN)

In 9M2025, HHV recorded revenue of VND2,596bn (+13% YoY) and NPAT of VND406bn (+31% YoY), fulfilling 72% and 86% of its targets and 67% and 79% of ACBS’s forecasts, respectively. We roll forward target price to VND17,800/share at YE2026 and maintain our BUY rating for this stock given positive outlook of the construction industry and solid performance of the BOT segment.

Solid 3Q2025 and 9M2025 business results: In 3Q2025, HHV posted revenue of VND914 bn (+15% YoY) and NPATMI of VND129 bn (+24% YoY). For 9M2025, revenue reached VND2,596 bn (+15% YoY) and NPATMI rose to VND406 bn (+31% YoY), fulfilling 72% and 86% of the company’s annual plan, and achieving 67% and 79% of ACBS’s forecasts, respectively. Growth was primarily driven by the Build-Operate-Transfer (BOT) and construction segments.

BOT Segment: Revenue from the BOT segment reached VND560 bn (+18% YoY) in 3Q2025 and VND1,627 bn (+13% YoY) in 9M2025. Corresponding gross profit stood at VND359 bn (+14% YoY) and VND1,077 bn (+13% YoY), respectively, supported by higher traffic volumes across key toll stations. Total traffic throughput in 3Q2025  climbed 5.2% YoY to 8.9 mn PCUs, with most stations recording positive growth , notably Hai Van Tunnel, Deo Ca, and Cu Mong stations, where traffic rose 11% YoY. Conversely, Ninh Loc station experienced a sharp 33% YoY decline due to traffic diversion to the newly operated Van Phong–Nha Trang Expressway. We expect traffic volume to recover once this expressway begins to collect tolls in 2026. Additionally, toll revenue from Bac Giang – Lang Son Expressway and National Highway No.1 Bac Giang – Lang Son are projected to improve as the Huu Nghi-Chi Lang and Dong Dang-Tra Linh Expressways start to operate.

Construction Segment: Revenue from construction activities reached VND314 bn (+14% YoY) in 3Q2025 and VND838 bn (+8% YoY) in 9M2025. Gross profit surged to VND18 bn (+643% YoY) and VND41 bn (+81% YoY), driven by large ongoing projects such as Quang Ngai – Hoai Nhon, Dong Dang – Tra Linh, and Mai Son Highway 45.

Margins continued to improve in 9M2025. Consolidated gross margin expanded by 1.1 percentage points YoY, to 42% in 9M2025. This improvement was mainly attributable to the construction segment, where gross margin rose to 4.8%, compared with 2.9% in the same period last year, while BOT margins remained stable on resilient toll operations.

Outlook: We expect HHV’s BOT segment to maintain its steady annual growth of 8–10% during the 2025–2027 period, providing a recurring income source. Meanwhile, supported by the government’s accelerated public investment initiatives, the construction segment is poised for continued expansion. As of the end of 3Q2025, HHV’s construction backlogs exceeded VND2,500 bn, equivalent to 2.5 times its 2024 construction revenue, ensuring robust workload visibility and a solid foundation for sustainable growth in the coming years.

We keep our 2025 forecast unchanged. Looking ahead to 2026, we forecast revenue to reach VND4,395 bn (+13% YoY) and net profit increase to VND 630 bn (+24% YoY), supported by the positive outlook for both the construction and BOT toll collection segments. We roll forward our target price to VND17,800/share at YE2026 and maintain our BUY recommendation.