FiinGroup analysts predict that the profit prospects of the manufacturing, export and infrastructure construction industries are expected to be outstanding in 2024.
At the recently held conference “Macroeconomic outlook and stock market in 2024”, Mr. Nguyen Quang Thuan, Chairman of FiinGroup, assessed that Vietnam’s macroeconomic context has recently shown signs of improvement.
First, exports show signs of recovery and are forecast to continue to recover when aggregate demand in major export markets improves as major economies have almost finished their cycle of increasing interest rates, and the recovery of domestic business groups and the strong trend of shifting from China to Vietnam.
Second, FDI is growing again thanks to the prospect of shifting to Vietnam to solve the origin problem in China for export to the US and Europe. Value chain shifts continue from multinational corporations. Recovery from traditional and mainstream markets such as Singapore, Korea, and Japan.
Third, public investment is disbursed at a higher rate than many years ago. The room for disbursement of public investment is still large thanks to the low ratio of public debt to GDP (about 38%) and the Government’s determination as a driving force for growth.
On the contrary, the challenges for the 2024 outlook are still huge because internal factors in the Vietnamese economy such as the real estate market situation and bad debt bonds have not shown signs of improvement. Domestic consumer demand is still weak.
On the other hand, external factors such as the prospects of recovery in the economies of Vietnam’s major partners are unclear in the context of a high international interest rate environment that affects foreign investment in Vietnam and export demand.
After very low growth in the first half of 2023, Vietnam’s GDP is forecast by IFM to grow by about 4.7% in both 2023 and 2024 to 5.8% assuming that challenges with the real estate market will increase. Real estate is processed or absorbed; Credit was loosened to a certain extent and export demand gradually recovered.
Going deeper into corporate profits, FiinGroup analysts forecast that the profit prospects of the manufacturing, export and infrastructure construction industries are expected to be outstanding in 2024.
For the export group, with representatives from seafood and textiles, there will be an opportunity to recover profits thanks to consumer demand in main export markets (USA, Europe, China). But this group also has to face the risk of demand recovering slower than forecast, competition with low-priced supplies from Ecuador, India, Bangladesh and geopolitical risks.
The oil and gas group also has opportunities next year coming from oil prices forecast to stay high thanks to industrial production on the rebound (with the main motivation from China thanks to efforts to loosen policies to promote growth) and Supply tightens as geopolitical tensions continue.
The steel industry is also expected to recover exports next year. In addition, profit growth is thanks to improved margins when selling prices inched up but input raw material prices (iron ore, coke) fluctuated slightly or remained flat and inventory optimization.
FiinPro analysts also believe that the industrial park real estate group will have a chance to make a breakthrough next year thanks to improved expectations of FDI into Vietnam thanks to the shift of capital flows from China and the recovery in capital flows from China. Traditional countries such as Singapore, Korea, Japan along with increased rental prices due to limited new supply
Besides the industries that are forecast to be bright in 2024, some industries are forecasting negative profit prospects next year such as banking, residential real estate, technology retail and fertilizer.
Regarding the technology retail group, analysts point out that the electronics and phone business is said to be in the saturation stage (the electronics segment is also negatively affected by the housing market). . Therefore, increasingly fierce competition will put pressure on revenue growth and profit margins of businesses.
As for the fertilizer group, the El Nino phenomenon is forecast to increase in the last months of 2023 and early 2024, negatively impacting farming activities (especially rice – accounting for 50% of the total sown area). grown in Vietnam). Therefore, it is expected to reduce the need for fertilizer use. In addition, fertilizer prices in 2024 are forecast to be stable compared to 2023 thanks to abundant supply.
In the residential real estate group, the analysis team pointed out that the gloomy situation of the residential real estate market lasted longer than expected due to bottlenecks in legal mechanisms and uncleared capital sources (Draft Law The revised land has not been approved…) will have a major impact on the 2024 profit outlook.
In addition, very few housing projects are licensed for construction or open for sale; Primary and secondary selling prices do not fluctuate significantly while investors promote discount policies, which can narrow profit margins.