ACG – Operating leverage, cooled expansion lift earnings from low base – Earnings Flash
  • 2024-04-25T00:00:00
  • Company Research
  • ACG reported Q1 2024 results with revenue and NPAT increasing 2% YoY and 124% YoY, respectively, fulfilling 17% and 15% of our respective 2024 forecasts. As Q1 is typically a low season, we foresee insignficant changes to our forecasts, pending a more extensive review.
  • In line with management’s guidance, Q1 2024 domestic sales remained weak, edging down 4% YoY.  1.5 years of low primary condo trancsactions in Vietnam led to weak home furnishing demand. 
  • Meanwhile, exports sales jumped 34% YoY, reflecting a recovery of Vietnam’s wooden furniture exports amid restocking activities from developed markets. In addition, the export GPM expanded from 13% in Q1 2023 to 25% in Q1 2024, as early customer acquisition costs in export markets are being phased out. This lifted blended GPM from 28% to 31% over the same period.
  • Exports’ gross profits more than doubled and accounted for 17% of the Q1 2024 gross profits. Their net profit contribution is higher because export sales are not as heavy in SG&A as with domestic sales.
  • SG&A/revenue cooled down from 25% in Q1 2023 to 22% in Q1 2024 because ACG slowed expansion of its distribution network now that it has covered 58 of Vietnam’s 63 provinces/cities. 

ACG’s Q1 2024 business results

VND bn

Q1 2023

Q1 2024

YoY

Q1 2024 /2024F

2024F

Revenue

680

695

2%

17%

4,092

- Domestic

575

554

-4%

16%

3,426

- Direct exports

105

141

34%

21%

667

Gross profit

191

214

12%

17%

1,233

- Domestic

177

179

1%

N/A

N/A

- Direct exports

14

35

148%

N/A

N/A

Selling expenses

-136

-112

-18%

19%

-581

G&A expenses

-37

-39

7%

26%

-153

EBIT

18

63

249%

13%

500

Financial income

41

46

13%

24%

193

Financial expense

-16

-10

-40%

24%

-41

Others

5

2

-63%

-86%

13

PBT

47

101

113%

15%

666

NPAT

36

81

124%

15%

533

 

 

 

 

 

 

 

Q1 2023

Q1 2024

 

 

2024F

GPM

28.1%

30.8%

 

 

30.1%

- Domestic

30.8%

32.3%

 

 

 

- Direct exports

13.4%

24.7%

 

 

 

SG&A /revenue

25.4%

21.7%

 

 

17.9%

EBIT margin

2.7%

9.1%

 

 

12.2%

EBITDA margin

6.6%

12.8%

 

 

15.0%

NPAT-MI margin

5.3%

11.7%

 

 

13.0%

Source: ACG, Vietcap

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