GAS – Earnings Review – [BUY] – 4Q25: NPAT pressured by bad debt provision

GAS recorded 4Q25 revenue of VND43.7tn (+75% yoy, +22% qoq, ~97% of KIS’s forecast), driven by robust growth in international LPG trading activities and higher LNG volume for power generation. Gross profit came in at VND3.8tn (-6% yoy, -8% qoq), exceeding KIS’s forecast by 39%. Gross margin was recorded at a low 8.7%, mainly due to dilution effects from the rising contribution of LPG and LNG volumes. In detail:

• Natural gas and LNG segment: Revenue reached VND15.3tn (+36% yoy, ~126% of KIS’s forecast), supported by LNG volume growth amid resilient gas-fired power demand and more affordable global LNG prices. Total natural gas volume in 4Q25 increased 9% yoy to 1.6bn m³, ~95% KIS forecast. Gross margin of the natural gas segment was diluted to 15.6% (-5.6ppt qoq, but still higher than our forecast of 12.4%), due to a higher LNG mix, which carries thinner margins than domestic gas.
• LPG segment: Revenue recorded VND26.7tn (+141% yoy, ~92% of KIS forecast). Gross margin remained low at 3.2% in 4Q25 (vs. our expectation of 2%).

SG&A expenses surged 36% yoy to VND2.4tn, mainly due to a VND1.2tn bad debt provision recognized during the quarter, largely related to gas payment receivables from POW and PGV, compared with our assumption of no provisioning.

Excluding the bad debt provision, SG&A expenses increased 10% yoy to VND1.2tn (~100% of KIS’s forecast). We note that these provisions have the potential to be reversed if EVN settles electricity payments to POW and PGV.

As a result, NPAT in 4Q25 declined to VND1.39tn (-32% yoy, -47% qoq, ~93% of KIS’s forecast).