- DXG announced Q3 2023 results with revenue of VND1.2tn (USD51mn; -3% YoY and +70% QoQ) and NPAT-MI of VND68bn (USD2.8mn; -56% YoY and vs a net gain of VND61bn/USD2.5mn in H1 2023). The bottom-line YoY decline was primarily due to (1) a 5.4 ppts reduction in GPM, (2) no large divestment gains as in Q3 2022, which were partly offset by (3) a 43% YoY decrease in Q3 2023 SG&A expenses.

-  In 9M 2023, DXG’s revenue declined 50% YoY to VND2.3tn (USD96mn) while its NPAT-MI plunged 77% YoY to VND129bn (USD5.4mn). The company recorded a pretax divestment gain of VND315bn (USD13mn; accounting for 94% of PBT) in 9M 2023 vs VND362bn (USD15mn; 31% of PBT) in 9M 2022, mainly from selling undisclosed land plots. As 9M 2023 revenue and NPAT-MI fulfilled only 33% each of our respective full-year forecasts, we anticipate potential downside risks to our 2023F forecasts, pending a more extensive review. 

- The property development segment’s revenue improved in Q3 2023 (VND1.0tn/USD42mn) vs H1 2023 (VND259bn/USD11mn) but decreased 30% YoY to VND1.7tn (USD223mn) in 9M 2023, which we attribute to a minimal number of deliveries in the period. In Q4 2023F, we anticipate that DXG will resume handovers at Gem Sky World. This project has already completed the construction of essential amenities like a school and shopping mall. Additionally, DXG will continue delivering units at Opal Skyline, where 100% of the units were presold. Handovers for Opal Skyline began at the end of September 2023.

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