Listed manufacturers see brighter business prospects amid rising costs

According to S&P Global's release on September 3, Vietnam's manufacturing Purchasing Managers' Index rose to 53.3 points in August, improving further from 52.9 points in July and remaining above the 50-point threshold for the 14^th consecutive month.

TNG is fully booked with orders through the end of 2026 and is expected to begin negotiating orders for 2027 this month. Photo: baodautu.vn

The PMI measures the health and level of activity in the manufacturing sector based on a survey of purchasing managers. In August, the pace of growth in new orders in Vietnam accelerated, marking the strongest increase since October last year.

Reports from a number of listed firms also point to positive developments in production and business activities.

In the export-oriented wood processing industry, Phu Tai Corporation recorded consolidated net revenue of more than $167.2 million in the first six months of the year, while profit after tax reached $11.5 million, representing increases of 18.6 per cent and 16.3 per cent on-year, respectively.

At the end of July, Phu Tai inaugurated a new wood pellet manufacturing plant in Khanh Hoa province in Vietnam’s south-central coast.

This is the company's third wood pellet plant, following two facilities already in operation in Phu Cat and An Khe, Gia Lai province. With the addition of the new plant, Phu Tai's total wood pellet production capacity has reached 300,000 tonnes per year.

On August 27, Phu Tai announced a decision to invest in and establish a company in the United States with capital of $1 million, of which Phu Tai will hold a 95 per cent stake.

The establishment of the US entity is aimed at carrying out trading, business, distribution and import-export activities involving quartz stone, granite, indoor and outdoor wooden furniture, as well as other products in line with the company's business orientation.

At Duc Thanh Wood Processing JSC, business activities continue to be driven by initiatives to improve operations and labour productivity.

As a result, although demand in the EU market, its key export market, has yet to show a clear recovery, Duc Thanh Wood's profit after tax still increased by 11 per cent to $1.42 million, significantly outpacing the 3 per cent growth in revenue, which reached nearly $5.8 million, in the first six months of the year.

Duc Thanh Wood said it had implemented factory expansion projects and has now invested in its seventh plant, applying modern machinery and technology to its production processes, management and capacity enhancement.

In the garments and textiles sector, Vietcombank Securities said many companies have delivered positive business prospects.

The state conglomerate Vietnam National Textile and Garment Group (Vinatex) is expected to maintain good revenue growth, supported by Autumn-Winter garment orders, while the yarn segment is expected to remain promising thanks to continued import demand from China.

However, Vinatex’s gross profit margin remains under pressure as costs have risen across the board.

TNG Investment and Trading JSC, a big player in the sector, is also expected to benefit from a positive order book, supporting expectations that its full-year business performance will remain favourable.

TNG is currently fully booked with orders through the end of 2026 and is expected to begin negotiating orders for 2027 this September.

Similarly, the 2026 business outlook of Song Hong Garment JSC is being supported by demand for Autumn-Winter orders.

Demand for Autumn-Winter products, recovery in some markets and growth in the fibre segment are providing momentum for exports of these products.

In seafood processing and exports, basa fish production in the first eight months of the year increased by 4.8 per cent on-year to 1,250,700 tonnes, while whiteleg shrimp production reached 806,000 tonnes, up 8.7 per cent on-year. Black tiger shrimp production was estimated at 230,200 tonnes, an increase of 4.2 per cent.

The business outlook for companies exporting basa fish to the US continues to strengthen as demand for basa fish and tilapia in the market rises amid tightening supplies of wild-caught whitefish such as Alaska pollock and cod.

For Nam Viet JSC, in addition to benefiting from the US market, the company also exports tilapia to Brazil.

Nam Viet is focusing on the niche segment ‘premium frozen fillets’ for the retail and industrial markets, avoiding direct competition with Brazil's local fresh-fish market.

This approach allows the company to tap into a segment with attractive profit margins while limiting the risk of trade-remedy measures. Demand in the market remains high, supported by stable consumption, providing a positive outlook.

Against a backdrop of high fuel and raw material prices, as well as interest rates remaining elevated, manufacturing businesses are facing mounting cost pressures, in addition to difficulties in accessing capital.

However, according to Nguyen The Minh, director of Investment Banking Division at ABS Securities, large businesses can still access funding to support their production and business activities, while small and medium-sized enterprises continue to face numerous challenges.

“To improve profit margins, businesses need to continue optimising cost controls and enhancing productivity,” he said.

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