COMPANY ANALYSIS REPORT
Gemadept is a leading company in Vietnam's port operation and logistics sector, with a handling volume of over 3 million TEUs in 2023. The company owns a nationwide port network stretching from North to South, comprising various types of ports including inland ports, river ports, and seaports. Notably, its deep-water port Gemalink is capable of accommodating the world’s largest generation of megaships.
INVESTMENT THESIS
- Cargo throughput at GMD ports continues solid growth into 2024–2025. According to updated data from the Vietnam Seaports Association (VPA), cargo volume through Nam Dinh Vu and Gemalink ports grew by 28% year-over-year in the first two months of 2025. Both ports are currently operating at over 100% of their designed capacity. We expect freight demand to remain strong through at least the first half of the year.
- Long-term growth potential is supported by key expansion projects. Nam Dinh Vu 3 (with a capacity of 800,000 TEUs) has completed legal procedures and began construction in Q4/2024, with operations expected to commence by late 2025. Gemalink Phase 2A is still in the legal documentation stage and is projected to begin construction in Q4/2025 and start operations in Q4/2026. Nam Dinh Vu 3 will expand the port’s capacity by 66%, while Gemalink 2 will double Gemalink’s capacity to 3 million TEUs per year.
- GMD has also proposed a mega-project—Cai Mep Ha Port—spanning over 200 hectares with a nearly 6-kilometer berth. If approved, along with the Gemalink 1 & 2 port system and strategic partnership with CMA CGM, GMD will possess significant long-term growth potential in the Cai Mep – Thi Vai deep-water port cluster.
- Short-term challenges from rising competition in Hai Phong. Four new berths at Lach Huyen Port are expected to come into operation in Q1/2025, adding 2.9 million TEUs of capacity to the Hai Phong port cluster and raising concerns of short-term overcapacity. MSC will also gradually shift its cargo (currently accounting for 17% of Nam Dinh Vu’s throughput) to Lach Huyen Berths 3 and 4. However, Nam Dinh Vu retains medium- to long-term growth potential thanks to key advantages: (1) A differentiated customer base compared to Lach Huyen; (2) Strategic location at the mouth of the Cam River, boasting the longest quay length in the region; (3) The Ha Nam channel upgrade project will allow access for larger vessels.
- Positive business outlook for 2025. Revenue is forecast to reach VND 5,605 billion (+16% YoY), driven by strong growth in the logistics segment—including the expected addition of 3 new vessels from Q2/2025. Net profit attributable to the parent company is projected at VND 1,679 billion (+15% YoY), with EPS of VND 3,996.
2024 BUSINESS UPDATE
- Revenue reached VND 4,832 billion (+25.7% YoY), driven by a strong recovery in the Port Operations segment, which posted VND 4,201 billion in revenue (+44.4% YoY). This was supported by continued improvements in trade activity, resulting in total throughput across the port system reaching 4.44 million TEUs (+47% YoY). Revenue from the Logistics segment declined to VND 632 billion (-32.5% YoY), primarily due to the re-negotiation of vessel leasing contracts at significantly lower charter rates compared to the elevated levels seen in 2022.
- Gross margin in the port operations segment improved by 3.1 percentage points, attributed to a slight increase in port service pricing. Net profit after tax came in at VND 1,905 billion (-24.8% YoY), largely impacted by a sharp decline in financial income. The prior year’s result (2023) had included a one-time gain from the divestment of the Nam Hai Dinh Vu port.
RECOMMENDATION
OUTPERFORM recommendation with a 1-year target price of VND 68,000/share and an upside potential of 14,3%.
Valuation
- Using the Free Cash Flow to Firm (FCFF) discounted cash flow method, we arrive at a 12-month target price of VND 70,000 per share. This implies a target P/E of approximately 17x, which is in line with the 3-year industry average.
- Risks: (1) Higher tariff rates in Vietnam compared to regional peers could undermine the competitiveness of Vietnamese goods, potentially slowing trade growth. (2) Delays in project execution may affect the company’s long-term growth outlook.
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