TNS Q3/2026: Thong Nhat Flat Steel Profit Up 10x on Margin Rebound

Overview

Thong Nhat Flat Steel JSC (UPCoM: TNS) became the first Vietnamese steel company to publish Q3/2026 results, reporting net profit of nearly VND 9.95B, roughly 10 times the VND 985M booked in Q3/2025. The gain came despite a 31.4% year-on-year revenue decline to nearly VND 125B, driven by a gross margin recovery from 2.7% to 14.8%. The result matters for TNS holders because a single quarter delivered close to 75% of the company’s nine-month after-tax profit.

Key Facts

• Q3/2026 net revenue: nearly VND 125B, down 31.4% year-on-year.
• Cost of goods sold: VND 106.5B, down almost 40%, outpacing the revenue decline.
• Gross profit: VND 18.5B, up nearly 280% from VND 4.9B; gross margin 14.8% versus 2.7%.
• Pre-tax profit: over VND 12B, up 824%; after-tax profit: nearly VND 9.95B versus VND 985M.
• Processing service revenue: VND 35.6B, up about 114%; scrap sales: VND 18.7B, 5.5x year-on-year; goods and finished-product revenue fell nearly 57% to VND 69.9B.
• 9M/2026: revenue VND 794.3B (-13.6%), gross profit VND 32.9B (+7.3%), after-tax profit VND 13.3B (+3.6%).
• Inventory fell 49% to VND 86.7B from VND 170B at the start of the year, a reduction of more than VND 83B; short-term receivables rose to VND 46.1B from VND 9.2B.

What Happened

In its filing explanation, TNS said it restructured its product mix toward higher-margin categories. Production volume rose 95% and consumption volume rose 96% year-on-year, lifting utilisation efficiency. The revenue mix shifted materially: goods and finished-product sales fell nearly 57% to VND 69.9B, while processing services grew about 114% to VND 35.6B and scrap sales reached VND 18.7B, 5.5 times the prior-year level.

Operating expenses rose alongside the volume recovery. Selling expenses increased 155% to VND 1.3B and general and administrative expenses nearly doubled to VND 4.4B. Within those lines, sales payroll climbed 177% to VND 1.27B, administrative payroll rose 135% to VND 2.46B, and purchased services in administration increased 179% to VND 841M. The company’s balance sheet also contracted: total assets stood at VND 344.2B on 30 September 2026, down 16.7% from the start of the year, while liabilities fell 25.7% to VND 238B and equity rose to VND 106.2B from VND 92.9B.

Market Context

TNS trades on UPCoM, Vietnam’s unlisted public company market, and closed at VND 3,800 on 11 October 2026. The stock sits in the flat-steel segment of the Basic Resources sector, a group that has faced compressed spreads through the recent construction-steel downcycle. The Q3 result is notable for arriving ahead of peers’ disclosures, giving TNS an early read on whether margin recovery is spreading through the sector. The company remains on a recovery path from accumulated losses of nearly VND 94.6B, equal to more than 47% of its VND 200B charter capital.

Strategic Significance

The core thesis here is mix, not volume growth. TNS is converting from a low-margin seller of finished flat steel into a toll-processing and scrap-recovery operation, where revenue per dong is lower but gross margin is structurally higher. Processing revenue more than doubling while finished-product sales fell 57% shows the pivot is real, and the 95% output increase indicates the asset base can absorb more throughput without new capital expenditure. The offsetting risk is working capital: short-term receivables jumped to VND 46.1B from VND 9.2B, with customer receivables up more than 34 times to nearly VND 33.9B, now close to 10% of total assets. Cash and equivalents stood at roughly VND 8B at end-September, so collection discipline on those receivables will determine whether the margin gain converts into durable earnings.

What to Watch

• Q4/2026 and full-year 2026 results, to confirm whether the 14.8% gross margin is repeatable or a one-quarter mix effect.
• Collection of the VND 33.9B customer receivables balance and any subsequent provisioning.
• Further inventory reduction from the VND 86.7B level and its effect on cash conversion.
• Whether accumulated losses of VND 94.6B continue to shrink toward the point where dividend capacity is restored.
• Peer steel earnings releases, to test whether margin recovery is sector-wide or specific to TNS’s processing model.