PC1 Group Stock Hits Floor After 2026 Profit Guidance Cut of 22%

Overview

PC1 Group (HOSE: PC1) saw its stock hit the floor price on April 23 after the company announced its 2026 business plan targeting a 22% drop in net profit despite 19% revenue growth. The guidance, disclosed at the annual general meeting on April 22, cited challenges across its energy, mining, and construction segments, triggering a sell-off with over 7.7 million shares offered at the floor.

Key Facts

• PC1 targets 2026 consolidated revenue of VND 15,618 billion, up 19% year-on-year.
• 2026 consolidated net profit is planned at VND 1,056 billion, a 22% decrease from 2025.
• The company aims to maintain a 15% dividend payout ratio for 2026, unchanged from 2025.
• PC1 plans three capital increases: an ESOP of 12.3 million shares at VND 10,000/share (VND 123 billion), a 15% stock dividend (nearly 62 million shares), and a rights issue of up to 74 million shares at no less than VND 20,000/share (expected to raise VND 1,480 billion).
• The stock hit the floor price of VND 24,100 on April 23 with a sell-side volume of 7.7 million shares.
• PC1’s Q1 2026 revenue is estimated at 15% of the annual plan, and net profit at 25%, reflecting the typical back-loaded construction cycle.

What Happened

At its annual general meeting on April 22, PC1 Group unveiled its 2026 business plan, which targets a 22% decline in net profit to VND 1,056 billion, despite a 19% rise in revenue to VND 15,618 billion. The profit guidance fell short of market expectations, leading to a sharp sell-off the following day. The stock opened lower and quickly hit the floor price of VND 24,100, with over 7.7 million shares offered at that level.

Tran Minh Viet, Head of Finance at PC1, attributed the profit decline to three factors: (1) lower hydropower output due to unfavorable hydrological conditions, which impacts the energy segment—the group’s largest profit contributor; (2) lower ore quality in the mining segment compared to 2025; and (3) rising input costs in the construction segment, driven by geopolitical tensions in the Middle East and higher interest rates.

Market Context

PC1 shares closed at VND 27 on April 10, up 1.86% with volume of 5.4 million shares, before the guidance cut. The stock’s drop to the floor on April 23 represents a 10.7% decline from that level. PC1 is listed on HOSE and operates in the construction, energy, and mining sectors. The broader market has been sensitive to earnings guidance, and PC1’s profit warning contrasts with its revenue growth target, highlighting margin pressure across its diversified portfolio.

Strategic Significance

PC1’s 2026 plan reflects a deliberate shift toward optimizing its investment portfolio, prioritizing long-term resources for renewable energy, green industrial parks, and real estate projects with genuine demand. The company also aims to enhance its general contractor capabilities, accelerate digital transformation, and adopt AI to streamline operations. However, the near-term profit decline underscores structural headwinds: hydropower’s dependence on weather, declining ore quality in mining, and cost inflation in construction. The aggressive capital raising—through ESOP, stock dividend, and rights issue—will dilute existing shareholders but provide funds for project investment and debt repayment, which could support long-term growth if executed well.

What to Watch

• Q1 2026 earnings release to confirm whether the 25% profit target for the quarter is achieved.
• Hydrological data for PC1’s hydropower plants in the coming months, as water flow directly impacts energy revenue.
• Updates on ore quality and mining output from PC1’s mineral operations.
• Progress of the rights issue and ESOP, including subscription levels and use of proceeds.
• Any changes in dividend policy or additional guidance updates from management.