Retail stocks stand out with company-specific growth stories

Listed retail companies continued to post impressive profit growth in the first quarter of 2026.

Retail emerges as a bright spot in Q1

According to statistics from Maybank Securities (MSVN), total net profit after minority interests across the sector surged 105% year-on-year in Q1/2026, extending the strong momentum seen in recent quarters (Q4/2025: 104% YoY; Q3/2025: 92% YoY; full year 2025: 77% YoY), while also exceeding MSVN’s forecasts by around 19%.

According to analysts, the sector’s positive performance continued to be supported by several factors. First, domestic consumption improved, particularly in the ICT and consumer electronics segments, amid higher selling prices driven by a global memory chip shortage and a replacement and upgrade cycle accelerated by AI-powered devices.

Second, leading modern retailers continued to gain market share, while operational leverage expanded alongside improving margins following restructuring efforts and scale expansion. ICT-related companies remained the standout performers during the quarter. Market leaders such as Mobile World Investment Corporation (MWG – retail) and Digiworld (DGW – distribution) reported profits significantly above expectations.

Phu Nhuan Jewelry (PNJ) also continued to outperform expectations, supported by resilient jewelry demand, increasing market formalization, and expanding profit margins.

Masan Group (MSN) and FPT Retail (FRT) maintained strong growth momentum thanks to improving profitability and continued expansion in consumer retail and pharmaceutical segments.

“Broad-based earnings beats demonstrate the resilience of leading retailers as well as the structural shift from fragmented traditional retail to organized modern retail formats, reinforcing our view that Vietnam’s retail sector is in a strong earnings growth cycle,” MSVN analysts said.

Profitability expected to continue improving

Leading retail companies are continuing to strengthen their competitive positions, expand market share, and improve profitability, including:

MWG continues to consolidate its leadership in ICT and consumer electronics retail, while Bach Hoa Xanh maintains rapid expansion and improved profitability.

MSN/WinCommerce continues gaining market share in consumer retail through aggressive store expansion and operational optimization, according to MSVN.

PNJ is reinforcing its leading position in branded jewelry thanks to tighter regulatory oversight and the increasing formalization of Vietnam’s gold market.

FRT/Long Châu continues to solidify its leadership in modern pharmaceutical retail through rapid network expansion and improved operational leverage.

“Earnings growth remains intact despite macroeconomic uncertainties. Although concerns persist regarding geopolitical tensions in the Middle East, retail sector revenue and profit growth remained positive during March–April 2026, reinforcing our forecast of 46% year-on-year earnings growth for the sector in 2026,” MSVN analysts noted.

Retail stock outlook depends on “individual stories”

Despite strong Q1 earnings growth and impressive profit growth prospects for the retail sector this year, recent stock price performance has remained weaker than underlying fundamentals suggest.

Analysts attribute this mainly to cautious sentiment surrounding domestic consumption and broader macroeconomic concerns. “In our view, current valuations do not yet fully reflect the strong earnings growth outlook for 2026 nor the sector’s attractive long-term growth potential,” MSVN stated.

Speaking on SSI’s “Coffee with Securities” program, Mr. Đào Minh Châu, Deputy Director of the Investment Advisory & Analysis Center at SSI Securities Corporation, also expressed a positive outlook on retail stocks.

According to Mr. Châu, in the current market environment, SSI Research favors MWG and MSN thanks to the IPO stories of their subsidiaries and attractive valuations.

For MWG, the company is benefiting directly from the device replacement cycle driven by AI-integrated laptops and new smartphone generations. Notably, Bach Hoa Xanh is accelerating its expansion roadmap, targeting 800 new stores in 2025 and 1,000 in 2026. With this scale advantage, the chain’s net profit margin is expected to rise sharply from 0.3% to above 3%. In addition, future IPO plans for Dien May Xanh and Bach Hoa Xanh are viewed as key catalysts for the company’s valuation.

MSN possesses a broad ecosystem and growth momentum from expanding WinCommerce by 20–30% this year. The company is also benefiting from rising tungsten prices and the recovery of its consumer business (MCH). Similar to MWG, plans for a future WinCommerce IPO are considered a positive catalyst for the stock.

Among other retail stocks, FRT continues to derive its primary growth driver from Long Châu pharmacy chain, which contributes up to 90% of profits and plans to expand store count by another 20%. However, SSI Research noted that FRT’s current valuation is higher than that of MWG and MSN. Meanwhile, PNJ is benefiting from both rising gold prices and opportunities to gain market share as regulations on gold smuggling tighten.

Regarding valuations, SSI Research analysts believe that the sector’s forward P/E ratios are currently below the five-year average, opening up upside potential of more than 20% compared to their target prices.

Although the retail sector’s long-term outlook remains highly promising, with projected P/E ratios still below five-year averages, analysts believe short-term investors should remain cautious. They also noted that in a market lacking strong supportive information and facing ongoing volatility, waiting for more attractive entry discounts could provide greater portfolio safety. “Retail remains one of the most attractive sectors to watch, but it requires patience and a long-term perspective to fully capture the remaining growth potential this year,” the analyst emphasized.