DXG announced Q1 2023 results with net revenue of VND378bn (USD16mn; -79% YoY — 4% of our 2023F) and a loss of VND95bn (USD4mn) vs Q1 2022 NPAT-MI of VND270bn (USD11mn) and our 2023F of VND656bn. DXG’s YoY decline in development revenue was due to minimal handovers at Gem Sky World (GSW). In addition, there were no presales at GSW in Q1 2023, per DXG. We attribute the majority of sales in Q1 2023 to subsidiary Dat Xanh Services. For the brokerage segment, revenue in Q1 2023 decreased 88% YoY as transactions were subdued. 

We see downside risks to our 2023F NPAT-MI forecast due to lower-than-expected sales and handovers at GSW, pending a fuller review. However, we believe property sales revenue can pick up in H2 2023 thanks to Opal Skyline deliveries and GSW’s improving legal status