Viettel stocks nears peak: What should investors consider?

Following the trading session on November 12, Viettel stocks sustained their momentum, with some even reaching the session high at the conclusion. Notably, VTP (Viettel Post) increased to 113,400 VND per share with a trading volume of 1.7 million shares on November 12, while other Viettel equities also enjoyed strong gains. VGI (Viettel Global) increased to 87,300 VND per share, with 2.3 million shares exchanged, while CTR (Viettel Construction) increased to 131,000 VND per share, with 1.4 million units traded. Even when the VN-Index fell sharply and approached 1,243, this stock group remained resilient.

The increase in VTP came after Viettel Post's Board of Directors voted to sanction an investment in the Viettel Logistics Park project in Lang Son. This effort focuses on export-import services, warehousing, local freight, and international e-commerce. VTP intends to lease space in the Dong Dang Border-Gate Economic Zone (Lang Son) and create a Viettel Lang Son Logistics Park branch in Cao Loc district.

The Dong Dang-Lang Son Economic Zone is strategically located as a complete economic zone, functioning as a national and international logistics center as well as a critical gateway linking China and Southeast Asia. It's a major economic, service, tourist, and industrial hub in northern Vietnam.

According to preliminary statistics from the Ministry of Information and Communications, VTP generated 2.6 trillion VND in service revenue and 133 billion VND in pre-tax profit in the third quarter of 2024. Additionally, the logistics park in Lang Son is scheduled to open in early December 2024, supporting cross-border e-commerce logistics and smart border services. During its 2024 Annual General Meeting, the firm declared plans to develop its logistics sector, integrate more deeply into the supply chain, improve Vietnam's logistics network, and cut logistics costs.

Currently, the company is exploring investments in three main segments: B2B logistics services for domestic manufacturers and retailers, B2C cross-border e-commerce delivery, and smart cross-border B2B logistics. At its current price, VTP trades at 2024F and 2025F P/E ratios of 30 and 25, respectively—well above the industry average of 20 in the region. This valuation seems high based on current business performance, potentially reflecting future growth in new service areas. Short-term investors should exercise caution when trading VTP at elevated prices beyond expert valuations.

According to a research by Bao Viet Securities, CTR's September revenue was 1.206 trillion VND, and its pre-tax profit was 61 billion VND. With revenue of 9.141 trillion VND and pre-tax profit of 484 billion VND over the first nine months, the company met 72% of its 2024 revenue target of 12.653 trillion VND and 72% of its profit objective of 671 billion VND. For Viettel's commercial 5G coverage strategy, CTR started installing 5G infrastructure in August 2024. As of right now, 55 provinces have been covered, with 70% of stations still to be finished. One of the main factors influencing CTR's long-term growth is leasing infrastructure.

A 15-year, 2,500–2,600 MHz frequency band was successfully auctioned off by Viettel for 7.533 trillion VND. With a projected CAGR of 24% between 2024 and 2030, Towerco (telecom infrastructure) is anticipated to have the greatest revenue growth among CTR's four business lines from 2025 to 2030.

Bao Viet warns, nonetheless, that the significant gain in CTR stock in 2024 reflects only medium-term possibilities. Consequently, there might not be much space for further appreciation in the near future.

Given that CTR stock is currently close to its peak, investors should exercise caution when trading it. Reputable economic groups predict that exports of necessities (such as minerals, fisheries, and agricultural items) will propel GDP growth in Viettel's investment markets in 2024. Traditional telecom services are anticipated to expand in the telecom and technology sectors since 4G adoption and telecom penetration are getting close to saturation in a number of nations. VGI plans to generate 31.7 trillion VND in revenue by 2024, with a pre-tax profit of 5.4 trillion VND, a 41% increase over 2023.

All things considered, even though Viettel Group's subsidiaries are expanding, short-term investors should be cautious, refraining from making fresh investments and only taking profits when these equities hit their target levels.