
Autos: EV-led growth, but profitability still lagging
Autos: EV-led growth, but profitability still lagging
Vietnam’s 10M25 auto sales vol. advanced 29% y/y – led by VinFast’s stellar momentum while other incumbents rose 7% y/y. In 3Q25, re. motorbike vol., it grew 8% y/y supported by strong e-2W growth, while Honda dropped 7% y/y. We estimate 4Q25 auto vol. to decline 2% y/y on a high base, implying FY25 growth of 19% y/y. For FY26/27, we forecast 17%/16% y/y growth driven by VinFast, with other incumbents growing modestly 5%/6% y/y. Honda motorbikes sales are forecast to fall 11%/4% y/y in FY26/27 due to market share loss to EVs. We are broadly cautious on the sector at current levels. This said, VEA (Add) looks undervalued based, in particular, on its attractive dividend yields. We have Hold ratings on each of for DRC and HAX (up from Reduce); these look fairly valued.