A brighter outlook emerges

In the first nine months of 2025, registered FDI in Vietnam reached $28.54 billion, up 15.2% from a year earlier, according to the National Statistics Office.

Meanwhile, public investment disbursement totaled VND440.4 trillion ($16.72 billion), equivalent to 50% of the full-year plan assigned by Prime Minister Pham Minh Chinh, compared with VND307.8 trillion ($11.68 billion), or 45.3% of the plan in the same period last year.

These factors have reignited momentum in the construction sector, with projects springing up nationwide.

The current environment serves as a springboard for the construction sector to enter a phase of strong growth, opening "a golden window" for capable companies to break out, said Nguyen Anh Quan, an analyst at broker DNSE.

According to Quan, the construction industry is entering a recovery stage driven by three main factors.

“First is its cyclical nature. Like the real estate market, construction shows clear seasonality - revenue and profit typically surge in Q2 and Q4, while Q1 and Q3 tend to see a slowdown,” he said.

"This is largely because public investment disbursement accelerates in the middle and later part of the year as the government pushes to meet its year targets, triggering a spike in construction demand. The pattern held in 2025, with construction firms posting a sharp rebound in revenue and profit in Q2 after a sluggish Q1," Quan noted.

“Second, input costs have improved significantly,” he said. “It’s worth recalling that 2021-2022 was a severe shock for the construction sector, when steel prices jumped 30-40%, and other materials such as cement, sand and bricks rose as much as 20%. Since then, the housing and construction material CPI has stabilized at around 4-7%, representing input cost movements in the sector - a trend that will positively impact profit margins for construction companies.”

“Third, medium- and long-term lending rates have fallen from the 2023 peak of 10.5% to 7.8% in Q2/2025, even lower than the 8.4% trough seen in 2021,” he said.

This brings a double benefit for the sector, as lower borrowing costs ease the financial burden on construction firms while improving the liquidity of property and infrastructure developers, helping accelerate project disbursement, Quan said.

As a result, the industry’s gross profit margin has risen from 13-14% during 2020-2023 to 16.15% in Q2/2025. Operational efficiency has also improved, with the return on assets (ROA) increasing from 1.5% in 2023 to 2.6% and the return on equity (ROE) climbing from 5.3% to 7.7%.

While these figures are not yet explosive, they clearly show a solid recovery in profitability across the sector, the DNSE expert noted.

Quan said FDI, public investment disbursement, and a recovering property market will remain key drivers of the construction sector in the near term.

“2025 marks the final year of Vietnam’s 2021-2025 medium-term public investment plan,” he noted. “Historically, disbursement tends to accelerate sharply toward the end of each cycle to complete major projects. The disbursement rate could reach around 90% of the plan - the highest level in the period,” Quan emphasized.

In addition, the National Assembly - the country’s legislature - has approved a resolution to raise public investment from 6% of GDP to 7%. This move will directly boost the construction sector and related industries such as building materials, logistics, engineering, and supporting industries.

At the same time, record-high FDI inflows are also fueling construction growth, driven by several factors, including the revised Land Law taking effect on January 1, 2025, which simplifies investment procedures, and the ongoing global supply chain shift under the “China + 1” strategy - a business approach where companies maintain their operations in China while expanding into at least one additional country.

These trends are expected to spur strong demand for industrial construction, including factories, warehouses, and industrial parks.

According to Quan, another growth driver for the construction sector lies in the gradual recovery of the real estate market, which is fueling momentum for residential construction. The social housing segment nationwide is booming, promising a surge of new projects for builders.

At the same time, improved supply, clearer legal frameworks, and supportive policies are laying a solid foundation for the industry’s sustainable development.

Notable construction stocks

The expert said construction stocks are poised to benefit from these tailwinds, with Coteccons Construction JSC (HoSE: CTD) standing out.

As of end-fiscal year 2024-2025, CTD’s backlog reached a record VND35 trillion ($1.33 billion), ensuring a strong pipeline for 2025-2026 and beyond. Revenue rose 27% year-on-year in the fiscal Q4 ended June 30, 2025.

Its 2026 revenue is forecast to reach about VND29.75 trillion ($1.13 billion), up 20% from 2025. Based on these projections, DNSE estimates the stock’s fair value at VND92,200 ($3.5) in 2025, implying a potential return of 21%.

Analysts at KB Securities Vietnam (KBSV) shared a similar view, saying the construction sector stands to benefit from strong FDI inflows, accelerated public investment disbursement, and a warming real estate market, even as demand for industrial construction cools in the short term.

“We remain positive on residential and infrastructure builders, supported by the recovery in the housing market and robust public investment momentum,” KBSV said. “By contrast, industrial construction may enter a slower growth phase amid concerns over U.S. tariff policies.

Civil construction stocks have rebounded this year but still trade well below their 2021-2022 peaks, reflecting investor caution ahead of a full property cycle recovery. Meanwhile, public investment-related stocks have rallied sharply since early this year, pushing valuations close to record highs.

Investors should look to accumulate during corrections, as upside potential is now limited. Notable names include HHV of Deo Ca Traffic Infrastructure Investment JSC, VCG of Vinaconex, CTD, and PC1 of PC1 Group JSC, the broker said.

Meanwhile, MB Securities (MBS) forecast the construction sector to be one of the standout profit performers in Q3, with earnings expected to surge 1,658% year-on-year, far outpacing the oil & gas sector (125%), securities (73%) and residential real estate (70%).

Leading the pack is Vinaconex (HoSE: VCG), which is set to post a staggering 3,800% jump in profits.

MB Securities analysts said Vinaconex is expected to post VND3.12 trillion ($118.44 million) in profits, with the bulk - around VND2.85 trillion ($108.19 million) - coming from the divestment of the Cat Ba Amatina project. The construction segment remains stable, supported by ongoing work on the North-South Expressway.

The next stock also expected to see earnings growth is Deo Ca Traffic Infrastructure Investment JSC (HoSE: HHV), which is projected to report net profit of around VND165 billion ($6.26 million), up 68% year-on-year.

The growth is driven by a 14% increase in HHV’s build-operate-transfer (BOT) segment, supported by strong traffic at newly operated toll stations. The company’s construction division also performed well, boosted by the Quang Ngai-Hoai Nhon and Dong Dang-Tra Linh expressway projects.

In its Q3/2025 earnings forecast report, Vietcombank Securities (VCBS) also took a positive view on the construction sector, projecting profit growth of around 20-30% year-on-year.

Looking ahead to Q4, VCBS said the construction sector could maintain a high profit base as project tenders accelerate toward completion. However, VCBS also cautioned that many stocks are already priced with strong growth expectations, leaving limited upside potential.