DHA, NNC Fall 20%+ YTD as Construction Material Costs Surge 25-30%

Overview

Construction material prices have risen 25-30% since early 2026 due to geopolitical instability in the Middle East, yet related stocks such as DHA (HOSE) and NNC (HOSE) have declined over 20% year-to-date. The divergence highlights margin pressure from rising input costs and a market transition from valuation-driven expectations to earnings reality.

Key Facts

• Construction material prices increased 25-30% from end-2025 levels, per a Tuoi Tre Online survey of dealers in Ho Chi Minh City.
• DHA and NNC stocks fell over 20% YTD as of April 20, 2026, after surging 65.5% and 190% respectively in 2025.
• 13 out of 19 tracked public investment stocks declined, representing nearly 68% of the group.
• Raw material costs account for 65-70% of total construction costs, according to Agriseco.
• Vietnam’s 2026 public investment plan totals approximately VND 995,000 billion, up over 30% from 2025 execution.
• Large-scale projects by Vingroup are attracting 20,000-30,000 workers, straining labor supply and raising operational costs.

What Happened

According to a Tuoi Tre Online report, construction material prices have continued to climb in early 2026, driven by geopolitical instability in the Middle East that disrupted transport costs and raw material supply. Dealers in Ho Chi Minh City raised prices by 25-30% from end-2025 levels.

Despite the price increases, stocks in the construction materials sector have underperformed. DHA and NNC, which had rallied strongly in 2025, have dropped over 20% YTD. Agriseco notes that while infrastructure firms benefit from rising public investment, margin pressure from input costs is a significant headwind. Additionally, a construction industry executive cited labor competition from large conglomerates like Vingroup as pushing up operational costs.

Market Context

DHA and NNC trade on HOSE. The broader public investment theme had driven strong gains in 2025, but the YTD correction reflects a shift in market sentiment. FIDT’s research director Bui Van Huy notes that the market is moving from a valuation-driven phase to one focused on actual earnings, making stock selection more critical. The VND 995,000 billion public investment plan for 2026 provides a macro tailwind, but margin compression and labor costs are dampening near-term earnings visibility.

Strategic Significance

The divergence between rising material prices and falling stock prices underscores that cost pass-through is not automatic for construction firms. Companies with fixed-price contracts or limited pricing power face margin erosion. The labor market tightness, driven by large-scale infrastructure projects, adds a structural cost layer. For long-term investors, the key is identifying firms with strong contract indexation clauses, diversified input sourcing, and efficient labor management. The public investment cycle remains a positive demand driver, but its benefits will accrue selectively.

What to Watch

• Q1 2026 earnings reports for DHA and NNC, due in late April, to assess margin trends.
• Any government measures to stabilize construction material prices or adjust contract pricing mechanisms.
• Updates on public investment disbursement rates, which will indicate revenue realization for contractors.
• Labor cost trends and availability, particularly for skilled workers in infrastructure projects.
• Foreign ownership changes in DHA and NNC, as foreign investors may react to margin pressures.