• We attended DXG’s annual general meeting (AGM) on April 19.
• Shareholders approved management’s 2024G guidance for revenue of VND3.9tn (USD156mn; +5% YoY) and NPAT-MI of VND226bn (USD9.0mn; +31% YoY) — equivalent to 70% and 66% of our respective forecasts. DXG completed 86%/15%/109% of its respective 2021/22/23G NPAT-MI guidance.  We attribute the difference between management’s guidance and our forecast (2024F NPAT-MI of VND343bn; +99% YoY), mainly to our projections for higher handovers at its key projects and higher earnings recovery of DXS vs the guidance.
• Shareholders approved (1) no dividend distribution plan for FY2023, and (2) an FY2024 dividend of 20% on par value (par value of VND10,000/share), either in cash and/or a stock dividend.  
• Shareholders approved the rights issuance plan of 150.1 million shares (20.8% of current outstanding shares) at an expected minimum issuance price of VND12,000/share to existing shareholders. The rights issuance ratio is 24:5 (i.e., shareholders who own 24 shares can buy up to five new shares). If the rights issuance is fully subscribed at the issuance price of VND12,000/share, DXG can raise a total of VND1.8tn (USD72mn) via equity, of which VND443bn (USD18mn) will be used to pay bonds and increase working capital at DXG and VND1.36tn (USD54mn) will be used to pay debt expenses at Ha An (DXG’s 100%-owned subsidiary and developer of Gem Sky World). The expected disbursement timeline will be from Q4 2024 to end-2025. 
• Shareholders approved a private placement plan of 93.5 million shares (13.0% of current outstanding shares) at an expected minimum issuance price of VND18,600/share to a maximum of 20 professional stock investors. The newly issued shares will be restricted from trading for at least one year. Management plans to use the total proceeds to increase charter capital and ownership at DXG’s subsidiaries. 
• These plans for private placement and rights issuance are expected in 2024 or will be determined later following the approval of authorities.
• Shareholders approved the dismissal of a member of the board, Mr. Luong Tri Thao, and appointment of the newly added board member, Mr. Luong Ngoc Huy for the 2024-2029 period.

Management expects legal procedures for key projects to be completed in 2024. Management stated during the AGM that DXG will focus on completing legal procedures and executing development for eight projects in 2024 in order to prepare for its growth phase in 2024-2026, among which are Gem Riverside, Gem Sky World (GSW), and Opal Luxury. These eight projects will supply a total of around 20,000 units to the market, per management. For the Opal Skyline project, DXG completed the handovers of the remaining units in Q1 2024 (100% sold; handovers started in H2 2023). For GSW, management expected that handovers could pick up from Q2 2024 while the ~1,700 remaining units to be sold could provide ~VND10tn in presales value (USD400mn). Overall, management’s expectations for the completion of legal procedures and relaunches of GSW and Gem Riverside in 2024 are broadly in line with our expectations. Meanwhile, we have yet to factor DXG’s remaining six projects (including Opal Luxury) into our forecasts.

Ambitious land bank expansion strategy. In addition to the above-mentioned eight projects, DXG stated that it is securing new land bank from five projects with a total site area of more than 100 ha, which it expects will support the 2025-2030 growth outlook. As a result, DXG anticipates the expected proceeds from the rights issuance and private placement plans will allow the company to develop these upcoming projects. We have not yet factored these capital raising plans into our valuation and forecasts.

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