PVChem: Opportunities Within Challenges for Long-Term Investors

PVChem provides drilling fluid services on offshore rigs
 

In early 2025, the global economy continued to fluctuate due to changes in the United States' trade policies toward various countries, including Vietnam. The U.S. imposed retaliatory tariffs of up to 46% on several imported goods from Vietnam — such as plastic resins, chemicals, and electronics — impacting investor sentiment and shifting short-term financial investment expectations, as well as affecting production activities of businesses operating in Vietnam. The VN-Index dropped nearly 15% over the last five trading sessions, and PVC stock fell more than 25%, hitting its lowest level in 24 weeks.

Amid these market fluctuations, PVChem remains committed to its 2025 targets: increasing revenue to VND 2.8 trillion and post-tax profit to VND 31.2 billion — more than 2.3 times higher than in 2024. The parent company’s profit is projected at VND 17.5 billion, nearly triple that of the previous year. These goals are the result of strategic decisions currently being implemented in a coordinated manner.

In 2024, PVChem undertook a comprehensive restructuring, transforming its subsidiaries into specialized units to optimize operations and enhance flexibility in service delivery. Moreover, mastering the technology of the Pro Dril water-based drilling fluid — a proprietary product developed in-house by PVChem — has enabled the company to pursue an independent and sustainable direction, ensuring greater autonomy in chemical supply, reducing import dependency, improving profit margins, and enhancing competitiveness in technical service bidding.

Industrial maintenance services are being vigorously promoted
 

In addition to chemical products, PVChem is aggressively shifting toward high-value technical services such as O&M (operation and maintenance), industrial wastewater treatment, maintenance, and corrosion prevention — fields that yield long-term financial returns and are less affected by input price volatility. This strategic pivot is evident in the projected 76% increase in pre-tax profit for 2025 compared to 2024, even as parent company revenue is slightly adjusted to reflect the new operational structure.

Beyond leveraging internal strengths, PVChem is also capitalizing on external opportunities. The revival of key Petrovietnam projects such as Block B – O Mon, Nhon Trach 3 and 4, along with the accelerating wave of domestic oil and gas exploration (Murphy, Jadestone Energy...), has driven substantial demand for specialized technical services, chemicals, and maintenance operations — all areas where PVChem holds competitive advantages. These developments are expected to provide stable medium- and long-term growth momentum, reinforcing PVChem’s position as a strategic partner in the national oil and gas value chain.

The U.S. retaliatory tariffs on Vietnamese goods and the recent steep stock market downturn are largely psychological in nature rather than direct threats to PVChem’s core business operations. PVChem does not directly export to the U.S. and is not in the group of companies directly affected by the new tariff schedule. The main impact on PVChem is indirect — through adjustments in the production and consumption plans of clients in the petrochemical and oil exploration sectors, who may cut orders or revise spending due to rising input costs and changing export markets. In some respects, these challenges present opportunities for PVChem to assert its competitive edge — those who master technology and invest strategically will be better positioned to ride the wave of localization.

In the long run, capital will return to companies with strong fundamentals, clear strategies, and solid internal capabilities. The recent decline in PVC stock presents a valuable opportunity for value investors to recognize the long-term growth potential of a leading brand that is undergoing a bold transformation to lead the next growth cycle in Vietnam's chemical and oilfield technical services industry. With a robust internal foundation and clear strategic direction from its leadership, PVChem is gradually turning challenges into a springboard for a new phase of sustainable and proactive growth.