TNS Q3/2026: Profit Up 870% as Revenue Falls 31%

Overview

Thong Nhat Flat Steel JSC (ticker TNS, UPCOM) reported Q3/2026 net revenue of nearly VND 125 billion, down more than 31% year on year, while net profit after tax rose over 870% to almost VND 10 billion. The company attributed the divergence to a deliberate shift toward higher-margin product groups, which lifted gross margin from about 2.7% to nearly 15%. In the same disclosure, TNS said Supervisory Board member Nguyen Duy Dung had been arrested, a case it says relates to a separate entity and does not affect its operations.

Key Facts

• Q3/2026 net revenue: nearly VND 125 billion, down more than 31% from VND 182.2 billion a year earlier.
• Cost of goods sold fell faster, from VND 177 billion to VND 107 billion, lifting gross profit nearly 280% to over VND 18 billion.
• Gross margin improved from roughly 2.7% in Q3/2025 to nearly 15% in Q3/2026.
• Net profit after tax: nearly VND 10 billion, up more than 870% YoY, roughly ten times the prior-year figure; pre-tax profit exceeded VND 12 billion, up over 820%.
• Production volume rose 95% and consumption volume rose 96% YoY, per the company’s explanation filing.
• 9M/2026 net revenue: over VND 794 billion, down about 13.6%; net profit after tax: over VND 13 billion, up about 4%.
• At 30/9/2026, total assets were over VND 344 billion (down 17% from the start of the year), inventory fell to VND 87 billion from over VND 170 billion, and accumulated losses stood at approximately VND 95 billion.

What Happened

According to the Q3/2026 financial statements and the accompanying explanation document, TNS said the product mix in the quarter shifted toward groups carrying higher margins. As a result, although net revenue fell 31% YoY, cost of goods sold declined at a faster pace, allowing gross profit to rise 280%. The company also cited a 95% increase in production volume and a 96% increase in consumption volume versus the same period last year as supporting better utilization of its production capacity. Selling expenses rose to more than VND 1.3 billion, about 2.5 times the prior-year level, while general and administrative expenses nearly doubled to over VND 4 billion; financial expenses were VND 558 million, almost entirely interest on borrowings.

Separately, TNS referred back to a late-May notice concerning the prosecution and detention of Nguyen Duy Dung, a member of its Supervisory Board. Dung is a former Chief Accountant of Viet-Trung Mining and Metallurgy Company Limited and faces charges of violating regulations on the management and use of state assets causing loss and waste, and of lacking responsibility causing damage to state assets. TNS stated the matter concerns violations at Viet-Trung Mining and Metallurgy and does not affect its own production and business activities or shareholder interests.

Market Context

TNS trades on UPCOM, Vietnam’s unlisted public company market, and last closed at VND 3,800 on 11 October 2026. The stock sits in the flat-steel segment of Vietnam’s basic resources sector, which has faced soft domestic construction demand and pressure from imported steel, a backdrop consistent with TNS’s 13.6% decline in nine-month revenue. The Q3 result is notable less for scale than for margin: a small-cap steel processor nearly tripling gross profit on a shrinking top line is an unusual outcome in a sector where volume and price usually move together.

Strategic Significance

The investment case here rests on whether TNS can sustain a mix-driven margin recovery rather than a cyclical one. Gross margin of nearly 15% is far above the roughly 2.7% recorded a year earlier, but the company still carries accumulated losses of about VND 95 billion against equity of just over VND 106 billion, leaving limited buffer. The 9M picture is far more modest than the quarter: profit of over VND 13 billion is up only about 4% year on year, meaning the Q3 jump followed a weak first half. For long-term holders, the key question is whether higher-margin product groups represent a durable repositioning or a one-quarter mix effect, and whether the Dung case remains confined to a former employer.

What to Watch

• Q4/2026 and full-year 2026 financial statements, to test whether the ~15% gross margin holds.
• Monthly or quarterly disclosures on production and consumption volumes, the stated driver of the margin shift.
• Any further regulatory or legal updates on the Nguyen Duy Dung case and confirmation it remains unrelated to TNS operations.
• Inventory and cash trends: cash and equivalents rose to about VND 22 billion while inventory fell to VND 87 billion at 30/9/2026.
• Progress in reducing the approximately VND 95 billion accumulated loss, a prerequisite for any dividend capacity.