BAF Q2/2026 Net Profit Falls 50% Despite 54% Revenue Growth

Overview

Baf Vietnam (BAF) reported a 50% year-on-year decline in Q2/2026 net profit to VND 104.7 billion, despite a 54.1% increase in revenue to VND 2,137 billion. The earnings miss was driven by lower average hog prices, a 118.7% surge in financial costs, and higher fixed costs from rapid farm expansion. The company attributed the decline to temporary factors related to its investment phase.

Key Facts

• Q2/2026 net profit after tax: VND 104.7 billion, down 50% YoY.
• Q2/2026 net revenue: VND 2,137 billion, up 54.1% YoY.
• Gross profit: VND 346.2 billion, up only 4.4% YoY.
• Financial costs: VND 145.2 billion, up 118.7% YoY, mainly due to higher loan interest.
• Average hog selling price: VND 63,000–65,000/kg in Q2/2026 vs. VND 65,000–70,000/kg in Q2/2025.
• H1/2026 net revenue: VND 3,899.3 billion, up 55.3% YoY; net profit: VND 310.9 billion, down 9.3% YoY.
• Full-year 2026 targets: net revenue of VND 8,431.8 billion and net profit of VND 793.1 billion; H1 completion: 46.2% of revenue and 39.2% of profit targets.

What Happened

Baf Vietnam (HOSE: BAF) released its consolidated financial statements for Q2/2026, showing a sharp profit decline despite robust top-line growth. Revenue surged 54.1% year-on-year to over VND 2,137 billion, driven mainly by the livestock segment. However, cost of goods sold rose even faster, up 69.7% to nearly VND 1,790.9 billion, compressing gross profit growth to just 4.4%.

The company explained that the profit drop was largely due to lower average selling prices for hogs (VND 63,000–65,000/kg vs. VND 65,000–70,000/kg in the prior year), higher interest expenses from rising market rates, and increased fixed costs from bringing new farms into operation during the first half of the year. These factors were described as temporary and linked to the investment phase, not a deterioration of core operations.

Additionally, BAF noted that African swine fever (ASF) remains complex, prompting increased biosecurity and restocking costs to protect herds and ensure long-term production stability.

Market Context

BAF shares closed at VND 29,700 on August 2, 2026. The stock has been under pressure amid broader agricultural sector volatility and concerns over hog price cycles. The company’s H1 profit miss, with net profit down 9.3% despite a 55.3% revenue jump, reflects the margin squeeze affecting many livestock firms as input costs rise and selling prices soften. BAF’s expansion strategy, while boosting revenue, has yet to deliver optimal operational efficiency, a key factor investors are monitoring.

Strategic Significance

BAF’s long-term thesis rests on scaling its integrated livestock model to capture Vietnam’s growing protein demand. The Q2 earnings miss, however, highlights the execution risks inherent in rapid expansion: higher fixed costs, interest burden, and exposure to volatile hog prices. The company’s ability to achieve its full-year profit target of VND 793.1 billion will depend on stabilizing hog prices, controlling financial costs, and improving new farm productivity. If these temporary factors persist, the market may reassess BAF’s growth trajectory and margin recovery timeline.

What to Watch

• Q3/2026 earnings release: whether profit margins recover as new farms reach full capacity.
• Hog price trends: average selling prices vs. Q2/2026 levels (VND 63,000–65,000/kg).
• Interest rate movements: impact on financial costs, which rose 118.7% YoY in Q2.
• ASF developments: any outbreaks could further raise biosecurity and restocking costs.
• Progress toward full-year targets: BAF needs to deliver VND 482.2 billion net profit in H2 to meet its plan.