DIG reported weak Q4 2022 net revenue of VND391bn (USD16.6mn; -57% YoY) while recognizing handovers of the Gateway Vung Tau, Cap Saint Jacques Complex, Nam Vinh Yen and Hiep Phuoc projects. The company’s Q4 2022 gross margin plunged to 28.1% vs 43.3% in Q4 2021. In addition, Q4 2022 operating margin declined 41.8 ppts YoY to 28.7%. As a result, DIG posted Q4 2022 NPAT-MI of VND4.47bn (USD0.2mn; -99% YoY) — with no divestment or revaluation gain recorded. The main profit driver in Q4 2021 was a revaluation gain from the Dai Phuoc land bank amounting to VND862bn (USD36.5mn). 

For full-year 2022, DIG’s net revenue was VND1.9tn (USD16.6mn; -26% YoY) and its NPAT-MI was VND146bn (USD6.2mn; -85% YoY). These results only fulfilled 64% and 38% of our respective forecasts because DIG did not recognize handovers at the Vi Thanh project as we forecast. Due to these significantly lower-than-expected full-year 2022 results, we foresee downside risk to our 2023F earnings forecast, pending a fuller review. In November 2022, DIG bought back VND1.6tn (USD67.8mn) of bonds prematurely; therefore, DIG’s total debt balance was VND3.8tn at end-2022 (USD162.9mn; -22% YoY), in which the total bond balance was VND1.9tn (USD78.9mn). As of end-2022, DIG’s cash and cash equivalents (including short-term deposits) were VND423bn (USD17.9mn), decreasing 80% vs end-Q3 2022 and 89% vs end-2021, which we attribute to funding for the bond buyback. DIG’s net debt/equity was 44.2% vs 43.1% at end-Q3 2022 and 15.2% at end-2021. 

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