Since the start of the year, the market has continued to adjust, and many sectors are now at significantly lower valuation levels.
Nguyen The Minh, Director of Investment Banking at ABS Securities Vietnam, noted that the VN-Index's average P/E ratio has fallen to about 10-11 times.
'This is a relatively low level, close to valuations at market bottoms during past crises, including the COVID-19 outbreak in early 2020, the US tariff shock last April, and the escalation of US-Israel-Iran tensions this February,' he said.
Vietnam: Low Valuations and Strong Fundamentals Signal Upside for Selected Stocks
According to ABS experts, in a 'deep discount' market environment, stocks with specific growth stories could see stronger rebounds.
One example is state-owned enterprises, which are expected to benefit from Resolution No. 79 of the Communist Party of Vietnam's Politburo on state sector development. The policy aims to reduce state ownership in enterprises and increase the free float ratio.
Second, the prospect of a market upgrade is expected to support large-cap stocks, especially in securities, banking, and real estate sectors.
In the banking sector, the average P/B ratio is currently around 1.2-1.3 times, a relatively low level amid pressure on net interest margins.
These pressures are expected to ease in the second half of the year, allowing net interest margins to recover, potentially providing strong support for bank stocks.
Third, as the government sets a 10% economic growth target this year, manufacturing companies are attracting increasing attention.
One of the bright spots is the recovery in new orders, reflected in the PMI, which rose to 52.8 points in May.
This trend is expected to support retailers, food producers, and export-oriented companies.
Another investment theme involves IPOs of subsidiaries of listed companies. An active IPO market could boost the attractiveness of parent company stocks.
Meanwhile, according to MBS Securities, several sectors could attract capital inflows driven by growth-supporting policies (such as public investment initiatives, bank support measures, and industries expected to benefit from the World Cup season, including retail, food, and telecoms).
From the perspective of Truong Hien Phuong, Senior Director at Korea Investment & Securities Vietnam, securities stocks still have considerable growth potential.
Despite the sector's strong long-term prospects, brokerage stocks have corrected significantly in recent months.
Many securities stocks are currently trading at attractive valuations, with P/E ratios below 15 times and P/B ratios below 2 times. For example, SSI (P/E 14.81x; P/B 1.7x), VIX (P/E 8.24x; P/B 1.97x), VND (P/E 11.95x; P/B 1.22x), or SHS (P/E 12.13x; P/B 1.15x).
The most important growth catalyst for the sector is the expected upgrade of Vietnam's stock market.
Official market reclassification in September 2026 is expected to create opportunities for large international capital inflows, especially from passive investment funds and global financial institutions. Passive inflows from global ETFs alone are estimated at $1.67 billion. These funds are expected to be deployed gradually over several quarters.
Additionally, Korea Investment & Securities Vietnam is bullish on steel stocks, which are currently attractively valued and benefit from policies promoting public investment.
Large infrastructure projects, such as the North-South high-speed railway, metro systems in major cities, the national stadium, and many other key projects are under construction or planning, creating significant steel demand in the coming years.
Furthermore, the recovery in the residential and industrial real estate markets, along with a rebound in global construction activity, should provide additional support for the steel sector.
According to Truong Hien Phuong, from a valuation perspective, many stocks in the above sectors currently trade at P/E ratios around 10 times. Under more favorable market conditions, reasonable valuations for industries with strong growth potential typically range between 15 and 17 times.
This suggests that if corporate earnings improve and market sentiment becomes more positive in the coming period, there is still considerable upside potential.
However, experts from Korea Investment & Securities Vietnam also advise investors not to focus solely on how deeply stocks are discounted but also to closely monitor company fundamentals.
Stocks of industry leaders with strong financial health, clear earnings growth prospects, and direct exposure to major long-term economic growth trends should be prioritized. Investors should also consider accumulating such stocks during market correction phases.
