Tech stocks diverge after breakout

After two adjustments from the peak of nearly VND140,000/share recorded in the first week of July to VND118,000/share in early August, FPT shares (FPT JSC) of Chairman Truong Gia Binh recently rebounded to VND130,000/share at the close of trading on August 12.

As of August 12, FPT had a capitalization of nearly VND190,000 billion (about USD7.5 billion), continuing to be the private enterprise with the largest capitalization listed on the stock exchange, higher than the VND165,000 billion of Hoa Phat Group (HPG) or the VND155,000 billion of Vingroup Corporation (VIC).

FPT's capitalization is only behind the "big guys" in which the State has controlling shares such as Vietcombank (VCB), ACV, BIDV (BID) listed on HoSE and Viettel International Investment Corporation - VGI (registered on Upcom).

FPT has achieved its current large capitalization thanks to the rise of technology stocks in the first half of 2024.

In the first 7 months of this year, FPT shares continuously set new historical peaks. Meanwhile, some large real estate stocks on the stock exchange fell quite sharply.

Vietnamese technology stocks have performed impressively in the context of the recent boom in artificial intelligence (AI). Many technology giants in the international market have flourished with faces such as Nvidia of Chairman and CEO Nvidia Jensen Huang or stocks of Super Micro Computer, Amazon, Microsoft and Google... Some corporations have stepped up cooperation with Vietnamese enterprises.

Domestically, the group of technology stocks of the "Viettel family" also increased dramatically in the first 7 months of the year and had a strong increase in capitalization.

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Mr. Truong Gia Binh and the leadership team turned FPT into the largest private enterprise on the stock exchange. Photo: HH

From around VND25,000/share at the beginning of the year, Viettel Global's VGI stock rose to over VND110,000/share. Viettel Construction (CTR) rose from under VND90,000 at the beginning of the year to over VND160,000/share at the end of June.

However, recently, except for FPT shares which are still near their historical peak, many other technology stocks have turned around and decreased quite sharply. VGI is currently at 63,000 VND/share. From over 160,000 VND, CTR code has dropped to 123,000 VND/share. After reaching a peak of 70,000 VND/share in mid-June, CMC Technology Group shares have dropped sharply to the current level of 48,000-52,000 VND/share.

Notably, the decline in VNG Corporation (VNZ) shares of CEO Le Hong Minh. VNZ shares were listed on Upcom on January 5, 2023 with an initial reference price of VND 240,000/share and after 11 consecutive ceiling price sessions, they reached more than VND 1.56 million/share (recorded on February 16, 2023).

After that, VNZ fell sharply to below VND740,000/share in July 2023 before increasing again to VND1.24 million/share about a month later.

In the last 10 sessions, VNZ recorded 8 sessions of decline and only 2 sessions of recovery on August 9 and August 12, currently at 520,000 VND/share.

What is the outlook for Vietnamese technology stocks?

VNZ shares fell as the Vietnamese "technology unicorn" reported a consolidated net loss of nearly VND489 billion in the second quarter of 2024, compared to a loss of more than VND507 billion in the same period last year.

VNZ (formerly known as VinaGame) returned to its familiar path of loss due to high costs for advertising new products and strategic products. According to the financial report, CEO Le Hong Minh's company in the first half of 2024 increased investment in game software under development. Many of VNZ's investments in subsidiaries and affiliates are losing money, including the loss of the entire VND 510 billion invested in Tiki Global...

VNZ also has many long-term projects. According to its separate financial report, in the first half of 2024, VNZ invested an additional VND 1,777 billion in Zion JSC (owner of ZaloPay), bringing the total investment here to nearly VND 5,142 billion, increasing the ownership ratio from more than 72.6% to 99.999%. By the end of the first quarter of 2024, the investment level in Zion will be VND 3,550 billion.

VNZ's long-term financial investment provision also increased sharply, from nearly VND3,650 billion at the beginning of the year to VND5,179 billion. Most likely due to the investment in Zion as presented in some previous reports.

Currently, VNZ's capitalization reaches nearly 15,000 billion VND (nearly 590 million USD), much lower than the peak of 2.3 billion USD.

Many investors still expect VNZ to make a breakthrough in the long term. Expectations are placed on VNZ's major projects, from the No. 1 position in the field of online games and advertising, the ZaloPay project, VNG Data Centers, to the plan to list shares on the US stock exchange...

According to Agriseco Securities Company, the information technology industry in Vietnam is expected to maintain high growth momentum thanks to the continued high demand for spending on digital transformation by businesses, ministries, sectors, etc. In addition, the development trend of AI, big data, cloud services, high growth rate of 4G, 5G networks, etc.

For VNZ, the strategic AI business segment has begun to record real revenue from overseas markets. VNZ will also focus on this area.

FPT benefits from software export activities as well as cooperation with the world's largest technology enterprises such as Nvidia.... CMC Group is also stepping up investment in many fields with bright prospects, including data centers...

Regarding policy, on August 9, Prime Minister Pham Minh Chinh signed a decision to establish the National Steering Committee for Semiconductor Industry Development. The Steering Committee is responsible for researching, advising, recommending, and proposing directions and solutions to promote the development of the semiconductor industry in Vietnam; directing and coordinating between ministries, ministerial-level agencies, government agencies, and relevant agencies and organizations to promote the development of the semiconductor industry in Vietnam.

FPT brings wealth to many people, continues to make strong breakthroughs thanks to AI? After more than 2 decades of equitization, FPT of Mr. Truong Gia Binh has become the largest private corporation in Vietnam and a technology giant exporting billions of dollars of brainpower, as well as cooperating with the world's largest technology companies such as Nvidia.