BSR – Earnings review- [HOLD] – 1Q26: Profit surges beyond expectations

Facts: Profit surges beyond expectations

BSR’s 1Q26 revenue reached VND45.9tn (+44% yoy, 105% of KIS forecast), driven by higher output (estimated +15–20% across key products including Diesel, Gasoline, and Jet A1) and stronger refined product prices.

In March, as the Gulf conflict escalated, refining margins in Asia spiked sharply due to (1) disruptions in refined product supply and (2) reduced refinery utilization rates in the region caused by crude supply shortages from the Strait of Hormuz. As a result, quarterly-averaged crack spreads were lifted, and BSR 1Q26 gross profit was boosted by +2,386% yoy to VND9.5tn, detailed as follows:

• Diesel: Revenue increased 59% yoy to VND21tn. Gross profit surged 517% yoy to VND6.2tn, with gross margin reaching 29.1% (+21.6%p yoy, +13.6%p qoq). During the period, average Asian Diesel crack spread reached USD34.6/bbl (+149% yoy, +48% qoq).
• Gasoline & Naphtha: Revenue rose 36% yoy to VND17.2tn. Gross profit reached VND2,047bn (vs. a loss of VND669bn in 1Q25), with gross margin at 11.9% (+17.2%p yoy, +10.9%p qoq). Singapore RON92 crack spread averaged ~USD13.3/bbl (+61% yoy, +10% qoq).
• Jet A1: Revenue increased 52% yoy to VND3.7tn. Gross profit rose 199% yoy to VND1,026bn, with gross margin at 27.5% (+13.5%p yoy, +4.6%p qoq). Average Asian Jet A1 crack spread reached USD35.8/bbl (+171% yoy, +54% qoq).

NPAT reached a record VND8.27tn (+1,969% yoy), significantly exceeding both management’s preliminary figure announced at the AGM (VND3.3tn) and our forecast (VND3.9tn).

Pros & cons: 3-4-digits growth could be sustained in 2Q26F

BSR is well-positioned to capitalize on elevated refining margins amid the ongoing conflict, as its crude supply is largely secured from the domestic Bach Ho field, enabling the refinery to operate above designed capacity.

Entering 2Q26, refining margins remained elevated in April, averaging USD86.2/bbl (Diesel), USD25.1/bbl (Gasoline), and USD66.3/bbl (Jet A1), approximately 3–4x higher than pre-conflict levels. In the case that the conflict persists and the Strait of Hormuz remains blocked, we believe BSR could continue to deliver triple- to quadruple-digit earnings growth in 2Q26.

Action: HOLD

We believe the current share price has largely priced in the company’s 2026 earnings growth outlook and maintain our HOLD recommendation.