DXS - High provision expenses in Q4 drag 2021 earnings growth

DXS reported Q4 2021 results with net revenue decreasing 3% YoY to VND1.3tn (USD57mn) and a net loss of VND29bn (USD1.3mn; vs Q4 2020 NPAT-MI of VND331bn/USD14mn). For full-year 2021, DXS’s net revenue increased 33% YoY to VND4.3tn (USD187mn) while its NPAT-MI reached VND539bn (USD23mn; -38% YoY) — equivalent to 106% and 63% of our respective forecasts. We attribute the lower-than-expected earnings result mainly to an unexpected surge in provision expenses of VND239bn (USD10.4mn; +193% YoY) in Q4 2021. We will discuss further with management regarding these provision expenses. Nevertheless, we anticipate insignificant changes to our 2022F NPAT-MI forecast of VND1.6tn (USD68mn; +191% YoY) as stated in our last Update Report, dated November 12, 2021, pending for a fuller review.