- We reiterate our MARKET PERFORM rating for DXS but raise our target price by 42% to VND12,200/share. Our higher target price is mainly driven by (1) an 18% increase in our aggregate 2024-2027F NPAT-MI forecast due to our lower SG&A expense forecast and (2) removing our 20% valuation discount. - We lower our 2023F NPAT-MI forecast by 16% to VND112bn (USD4.7mn; -67% YoY) mainly due to our 6.3-ppt lower GPM assumption, which is partially offset by our 14% lower SG&A expense forecast as DXS’s total staff at end-Q2 2023 fell by 70% YoY while only inching up by 2% QoQ. - We raise our 2024F and 2025F NPAT-MI forecasts by 26% and 20% to VND510bn (USD22mn; +354% YoY) and VND770bn (USD32.6mn; +51% YoY) as we cut our respective SG&A assumptions by 15% and 16%. DXS minimized fixed costs and business expenses as a result of challenging market conditions in H1 2023, and we expect this cost control to continue in 2024-2025F.
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