Credit Rating Result
Hanoi, 16 September 2025 – Vietnam Investors Service and Credit Rating Agency Joint Stock Company (VIS Rating) has affirmed A&A Green Phoenix Group Joint Stock Company (Phenikaa) A long-term issuer rating. The rating outlook remains stable.
SUMMARY OF KEY FACTORS
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| Other consideration | Negative | Neutral | Positive |
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Rating rationale
The affirmation of Phenikaa’s A long-term issuer rating with stable outlook reflects our expectation that Phenikaa will maintain its leading position in Vietnam quartz stone production, meaningful growth in its new education and healthcare businesses, and good access to domestic banks and capital markets to finance its new capital expenditures and manage its liquidity over the next 12-18 months.
A key strength of Phenikaa’s credit profile is its strong profitability and operating cash flow, stemming from its core quartz stone business. The group’s key competitive advantages in this business are underpinned by the high level of vertical integration in its production process, its commitment to innovate and create new products, and its well-established distribution network in the US market.
Over 70% of Phenikaa’s total revenue in 2024 – 1H2025 came from its quartz stone business, with 60-70% attributed to its sales and operations in the US market. As an exporter of Vietnamese products, Phenikaa has been subject to an additional 10% tariffs on its exported products to the US. We view the downside risks of further tariff hikes on Phenikaa as relatively well-managed.
According to the management, the US reciprocal tariff policies are expected to have limited effects on Phenikaa’s competitiveness in the US, as its key competitors from Spain, India, and Israel are also subject to comparable tariff rates. Moreover, over 90% of input materials, such as polyester resin and cristobalite, used to produce Phenikaa’s quartz stone are sourced domestically, and hence, the risks of additional transshipment tariffs remain remote.
Phenikaa’s sales of its key products including quartz countertop in the US will hinge on consumer demand and spending. In 1H2025, total residential construction spending in the US slightly declined, impacting Phenikaa’s sales in this market. The management expects the current slowdown in residential construction spending in the US will lead to a single-digit decline in its US market revenue in 2025, and the forthcoming cuts in US interest rates will help to prop up consumer demand and stabilize sales in 2026.
Since 2024, we note that Phenikaa has continued to develop new products, expand its production capacity and distribution channels, and diversify into new markets. For example, it launched a crystalline silica-free product line with technical specifications that comply with distinct regulations and standards in markets such as Australia, Europe, and California (USA), and established a new subsidiary in Australia to support market penetration. The group also increased capacity by 17% while sustaining quartz stone gross margins of 53–54%, among the highest in Vietnam’s construction materials sector.
Besides quartz stone, Phenikaa’s education business has developed to be the group’s second-largest revenue and profit contributor, with 2024 revenue rising 77% YoY to VND 665 billion, driven by robust university enrollments and annual tuition fee increases. In 2024, total university students grew 44% YoY to 26,000 and are projected to reach 34,000 in 2025, based on recent enrollment results. In 2026, the group will put a new dormitory and medical laboratory into operation on the Phenikaa University campus, further improving its infrastructure to accommodate an increasing number of students.
On healthcare, Phenikaa University Hospital started pilot operation in December 2024 and reported an operating loss in 1H2025. Once the hospital begins full operation with a complete range of services, expected in November 2025, we view its utilization to improve and operating loss to narrow significantly over the next 12–18 months. Additionally, Phenikaa is investing in a second hospital and a pharmaceutical factory, both scheduled to commence operations after 2026.
In 1H2025, Phenikaa’s EBITDA (Earnings before interest, taxes, depreciation and amortization) margin declined to 37% from 43% in 2024, mainly due to hospital operating losses, resulting in weakened CFO (Cash flow from operations). However, the group’s EBITDA margin remains very strong compared to Vietnamese corporate landscape and significantly higher than peer average of 12% in 2024. Over the next 12-18 months, we expect EBITDA margin to stabilize and CFO to improve, driven by higher profitability in education and lower losses in the healthcare business, in combination with strong profitability and cash flow from the quartz stone business.
According to the management, education and healthcare investments will lead to capital expenditures increasing by more than 100% in 2025-2026 compared to the 2022-2024 average. As the majority of capital expenditures will be financed by loans, we expect the total debt of the group to increase by 13-16% annually, and leverage, indicated by Debt/EBITDA, to increase from 3.0x in 2024 to 3.7-3.8x over the next 12-18 months. However, this leverage remains low compared to Vietnamese corporate landscape.
Over the next 12-18 months, we also view that Phenikaa’s interest coverage, measured by EBIT (Earnings before interest and taxes)/ Interest expense, to decline to 2.6-2.8x due to higher debt levels, and CFO/Debt to be at 18-20% in 2025-2026, as operating cash flow of its core businesses strengthens.
We assess Phenikaa’s liquidity risks in the next 12-18 months to be well-managed and largely mitigated by its strong operating cash flow and adequate stock of cash resources. Most of its short-term debt is to finance the group’s working capital, which is well-supported by credit lines from multiple banks. Its unused credit lines are equal to 105% of total short-term debts as of 2024. In a stress scenario where the group is unable to access new financing from banks, we expect the group to have sufficient internal sources of cash to repay all of its maturing debt.
We do not incorporate any affiliate support or government support in Phenikaa’s issuer rating.
Phenikaa is a multi-sectoral corporate group comprising over 30 member companies that operate in Vietnam and globally. The group’s core business involves the industrial production of countertop materials, in which the key product is quartz stone, which has been for sale in Vietnam and global markets since 2004. Since 2018, the group has expanded in the education and healthcare sectors in Vietnam. The group now operates Phenikaa University and Phenikaa School, with a total of two campuses in Hanoi, and launched its first medical facility, Phenikaa University Hospital, in Hanoi in December 2024.
Factors That Could Lead to an Upgrade/Downgrade
Rating methodology
Non-Financial Corporates Rating Methodology.
For more detailed information, please refer to our full credit rating methodology at: here
Credit rating history
| Date | Rating type | Rating | Outlook | Action |
|---|---|---|---|---|
| 16 September 2025 | Long-term issuer credit rating | A | Stable | Update |
| 16 September 2024 | Long-term issuer credit rating | A | Stable | First-time assignment |
Regulatory disclosures
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Phenikaa’s ownership stake in VIS Rating: 0%
The ownership ratio of Phenikaa held by VIS Rating’s staff: 0%
Cases in which analysts and credit rating council members cease their participation in the credit rating contract before the contract expires and the reason for the cessation: 0
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Analyst & Committee
Primary Analysts
Rating Committee Members
Credit Rating Announcement Number
Public credit rating announcement no: VN0104961939-002-160925
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