- CTR announced H1 2021 revenue of VND3.5tn (USD153mn; +32% YoY) and NPAT-MI of VND153bn (USD7mn; +54% YoY). All four segments — Telecom Operation, Towerco, Construction and System Integration — contributed to these robust growth rates.  
- Overall, CTR’s results are tracking ahead of our expectation, especially in Telecom Operation. As such, we see potential upside to our current projections, pending a fuller review. 

Telecom Operation (estimated 37% of H1 2021 EBITDA): EBITDA jumped 47% YoY against a 21% YoY increase in revenue in H1 2021. This segment’s main driver is Viettel Group’s (CTR’s parent company; Vietnam’s No. 1 Telco) mobile telecom network expansion and fixed-line broadband subscriber growth. Apart from the domestic market that grew by a mid-teen rate in H1 2021 per our estimate, CTR also executed a larger amount of projects in Myanmar and Cambodia. 

Towerco (estimated 22% of H1 2021 EBITDA): This segment rocketed off a low H1 2020 base thanks to new telecom tower builds and expansion of other telecom infrastructure such as distributed antenna systems and fiber. In Q2 2021, Towerco’s revenue and EBITDA surged 23% and 42% QoQ, respectively, on the back of a higher tower count. EBITDA margin also expanded 6.9 ppts YoY and 9.4 ppts QoQ to 70.3% in Q2 2021 amid a higher number of operational telecom towers. Per our estimate, CTR’s tower count climbed from ~1,100 as of YE2020 to 1,700-1,800 as of H1 2021.

Construction (estimated 25% of H1 2021 EBITDA): EBITDA advanced 13% YoY backed by a 25% YoY expansion in the top line, which we attribute to a larger contribution from non-telecom construction such as residential projects. 

Per CTR, the Kim Chung – Di Trach residential project in Hanoi (total contract value of VND140bn/USD6mn) and the Louis Hoang Mai residential project in Hanoi (total contract value of VND440bn/USD19mn) were among CTR’s key non-telecom projects. For the telecom construction segment, CTR provided maintenance service for telecom towers on Truong Sa islands while constructing and installing equipment for the Vietnamese Navy’s radar stations as well as 20 non-stop toll stations for Vietnam Digital Transport JSC.

System Integration (estimated 16% of H1 2021 EBITDA): EBITDA rocketed 288% YoY thanks to contributions from smart solution projects, per management. CTR’s notable projects in H1 2021 included installation of 2,000 security cameras for COVID-19 isolation centers, security cameras for the Government’s “new rural” initiatives and solutions for non-stop toll collection.