- BWE released Q1 2023 results with revenue of VND681bn (USD28.8mn; -7% YoY) and reported NPAT-MI of VND141bn (USD5.9mn; -20% YoY), which completed 19% and 17% of our respective full-year forecasts.

- We attribute the 7% YoY lower revenue in Q1 2023 to a 26% YoY decrease in revenue from the waste treatment and 64% YoY decrease in revenue from the wastewater treatment segment, which outweighed resilient revenue from the water segment (+4% YoY). Meanwhile, reported NPAT-MI dropped 20% YoY as interest expenses surged 95% YoY, outweighing financial income increasing 3x YoY and the resilient water segment. According to BWE, VND84bn of revenue from the waste treatment segment was not recorded in Q1 2023 results due to incomplete paperwork.

- Binh Duong Province’s weak 1.2% YoY GRDP growth in Q1 2023 poses downside risk to the full-year GRDP target of 8.5%-8.7% YoY. While we expect water volume to recover in future quarters, we foresee slight downside risk to our water volume forecasts. In addition, the high interest expenses imply downside risk to our NPAT projection, pending a fuller review.

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