PVS Update – OUTPERFORM

PetroVietnam Technical Services Corporation (HNX: PVS)

PVS announced Q2/2025 earnings with NPAT reaching VND319 billion (+52.6% YoY and +6.6% QoQ), in line with our expectations. Cumulatively for 6M2025, NPAT increased by 20.4% YoY to VND619 billion, achieving 79% of the full-year target and 45% of our forecast. Our target price for the stock by the end of 2025 is VND40,600/share. Rating: OUTPERFORM.

PVS reported Q2/2025 business results with revenue reaching VND7,382 billion (+38.5% YoY) and NPAT of VND319 billion (+52.6% YoY). This increase was driven by:

• Revenue from the M&C (Mechanical & Construction) segment—which typically accounts for around 55% of total revenue—rose by 55.2% YoY.
• Gross profit increased by 83.5% YoY, leading to an improvement in gross margin to 5.9% from 4.3% in the same period last year. Notably, the gross margin of the M&C segment significantly improved to 3.5% from just 0.3% in the same period last year, thanks to the delivery of 33 suction bucket jackets for the Greater Changhua 2a & 4 (CHW2204) offshore wind project and solid progress on the EPCI#1-2-3 contracts of the Block B – O Mon project.
• Financial income rose by 59.6% to VND223 billion, thanks to higher interest income and foreign exchange gains.

These positive factors offset the negative impact from a 26.3% YoY increase in selling and administrative expenses, which reached VND419 billion.

For 6M2025, net revenue reached VND13,396 billion (+44.3% YoY), and NPAT achieved VND619 billion (+20.4% YoY). The main growth driver was the M&C segment, with revenue up 80.1% YoY and gross margin improving to 2.5% from 1.2% in the same period last year.

Outlook

PVS’s core business is expected to grow steadily, with total signed contract value in the M&C segment reaching approximately USD3.7 billion for the 2025–2030 period, accounting for 69% of our estimated backlog during this time.

We forecast PVS’s 2025 business results with revenue of VND30,017 billion (+26% YoY) and NPAT of VND1,380 billion (+10.1% YoY). Although the core business is improving, net profit growth is modest due to a one-off gain of VND603 billion recognized in 2024. Using the discounted cash flow (DCF) method, we value PVS at VND40,600/share by the end of 2025.