We attended the DXG-DXS earnings calls on July 23 and the key takeaways are as follows. 

H1 2024 preliminary results: 

• DXS: Q2 2024 preliminary NPAT-MI of VND39bn (USD1.5mn; +25% QoQ); H1 2024 preliminary NPAT-MI of VND70bn (USD2.7mn; compared to H1 2023’s net loss of VND58bn/USD2.3mn) mainly driven by YoY higher transactions. 
• DXG: Q2 2024 preliminary NPAT-MI of VND33bn (USD1.3mn; +5% QoQ); H1 2024 preliminary NPAT-MI of VND64bn (USD2.5mn; +5% YoY) mainly driven by contributions from Opal Skyline and Gem Sky World handovers. 
• H1 2024 preliminary NPAT-MI of DXG and DXS completed 28% and 37% of our 2024F forecasts, respectively.  
• Overall, we foresee potential downside risk to DXG’s 2024F NPAT-MI forecast (VND230bn/USD9.0mn; +34% YoY) as the presales and handovers at Gem Sky World and H1 2024 profits trailed our expectations, while we foresee no significant change to DXS’s 2024F NPAT-MI forecast (VND190bn/USD7.5mn vs 2023’s net loss of VND168bn/USD6.6mn), pending a fuller review.   

Brokerage segment: In H1 2024, DXS recorded around 7,000 transactions (accounting for around 33% of market share) with the contributions from traditional and full-service brokerage services being around 70% and 30%, respectively. DXS expects stronger brokerage activities in H2 2024, which is in line with our expectations. 

Gem Sky World (GSW; 3,900 low-rise units; 92 ha in Dong Nai): Approximately 60% of this project is presold (broadly unchanged from the end of 2023), with 40% already handed over. This leaves around 700 units of backlog to be booked, of which DXG anticipates approximately 300 units to be recognized by the end of 2024.  

Currently, there are about 1,700 unsold units remaining. DXG has not relaunched GSW yet and mentioned that the company is waiting for improved market conditions. They anticipate resuming the sales launch at GSW by end-2024. This guidance for handovers/sales progress at GSW trails our previous expectations. 

Gem Riverside (6.7 ha, Thu Duc City, HCMC): DXG paid the additional land use rights fee for this project’s adjusted 1/500 masterplan in Q1 2024. The company anticipates to receive its construction permit by Q4 2024. 

Opal Skyline (Binh Duong): Over 90% of total units were recognized as of end-Q2 2024, leaving around 100 to 130 presold units to be recognized by Q3 2024.

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