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Which economic sectors are predicted to grow in Vietnam next year?

Malie Nguyen Malie Nguyen

Dieuhuong270198@gmail.com

December 14, 2020 | 18:11

Industrial, housing real estate, fishery- livestock, power, and steel are forecasted to post growth in 2021 by FiinGroup, Vietnam's leading service provider of financial technology and data analytics.

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A recent report by FiinGroup forecasts that many non-financial industries that have ranked "decelerated" this year will have good growth prospects in 2021. The motivation for this group is based on the fact of the Covid-19 vaccine and macro fundamentals have gradually been improved, VNExpress reported.

In terms of the real estate sector, mid-end housing businesses are likely to achieve good profits thanks to the increase in demand; meanwhile, industrial zone real estate is expected to continue benefiting from the investment shift out of China.

The growth driver of Vinhomes will come from the handover of three major projects namely Vinhomes Ocean Park, Vinhomes Smart City, and Vinhomes Grand Park. Mid-end listed companies, including KDH, DXG, NLG, PDR, and DIG with strong sales growth could earn high revenue in 2021 if the handover progress is on schedule. The amount of prepayment of these businesses also reached the highest level over the past five years and is anticipated to be recorded in revenue in the next 3-4 quarters.

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The fishery is one of the industries which is expected to grow next year. Photo: Tapchicongthuong

The trend of shifting investment flows to ASEAN countries, including Vietnam will remain the main impetus for real estate firms, such as SZC, KBC, IDV, and SIP, especially SZC, VRG, and KBC could benefit more in the context that available industrial land in Bac Ninh and Hung Yen, Binh Duong, and Dong Nai becomes scarce.

With the livestock and aquaculture sectors, the demand for processed and packaged foods are expected to rise. In addition, tax incentives from the EVFTA will help enterprises to lift their profit margins and boost exports.

“The surging demand in convenience food and the preferential tax of 0% will boost the shrimp exports to the EU in 2021," said FiinGroup's report.

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Illustrative photo: Tapchicongthuong

The analyst group also forecasts that the development of the livestock industry will keep hailing from Dabaco (DBC), GTNFoods (GTN), and Vilico (VLC). Nevertheless, Dabaco's pig-breeding segment (which currently contributes a revenue of over 40%) may not maintain the same growth as this year's because pork prices are on a downward trend. Meanwhile, GTN and VLC will still gain the revenue mainly from the revenue consolidation of Moc Chau Milk (MCM) - the dairy business that has been aided by the parent company Vinamilk (VNM) in restructuring and enhancing net profit margin.

Hydropower and thermal power are also supposed to welcome growth prospects next year thanks to the sharp demand increase in electricity consumption (about nearly 10%).

Concerning the steel industry, steel billet exports are set to continue to be the main growth impulse next year, in the context of low steel consumption domestically.

Evaluating Hoa Phat, the analyst team said that with a domestic market share of more than 32%, Hoa Phat is the only steel enterprise capable of setting a price level (sustaining low selling prices to increase market share) and flexibility in operation plans (promoting the export of steel billets and sell hot-rolled steel domestically as the demand in construction steel plummets).

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Malie Nguyen