DXS – Net loss from affiliates drags Q4 earnings – Earnings Flash
  • 2024-01-31T00:00:00
  • Company Research
  • DXS announced Q4 2023 results with revenue of VND477bn (USD20mn; -46% YoY) and a net loss of VND114bn (USD4.7mn; vs Q4 2022’s net loss of VND74bn/USD3.1mn and vs Q3 2023 NPAT-MI of VND3bn/USD0.1mn).
  • In 2023, DXS’s revenue declined 52% YoY to VND2.0bn (USD81mn) while its bottom line was a loss of VND168bn (USD6.9mn) vs 2022 NPAT-MI of VND345bn (USD14mn). As 2023 revenue and profit result trailed our expectations, we anticipate downside risk to our 2024F earnings forecast, pending a fuller review.
  • DXS’s brokerage segment revenue plummeted 72% YoY to VND648bn (USD27mn) in 2023 as there were a minimal number of new project launches and transactions in the year. Per DXS, the nationwide absorption rate (% of total accumulated launched units) was ~20-28% in 2023, with Q4 2023 showing QoQ improvement in the north of Vietnam and the west but slightly decreasing in the southern and central areas. 
  • The brokerage segment’s GPM in 2023 was 59%, down 7.6 ppts compared to 2022, which we attribute to a higher contribution from traditional brokerage, which has lower margins compared to full-service brokerage. 
  • DXS’s net income from affiliates was negative VND107bn (USD4.4mn) in 2023, which was mainly from DXS’s 49%-owned Dat Xanh Mien Nam (DXMN) affiliate. Per DXS, a contributing factor to this loss is the provision made by DXMN for its receivables from the developer LDG Investment JSC (HOSE: LDG), due to LDG currently encountering legal issues. 

DXS’s 2023 results

VND bn

Q4 

2022

Q4 

2023

YoY

2022

2023

YoY

2023F

2023 as % of 2023F

Net revenue

884

477

-46%

4,096

1,978

-52%

2,402

82%

  • Brokerage 

311

227

-27%

2,349

648

-72%

705

92%

  • Property sales

393

198

-50%

1,498

1,207

-19%

1,498

81%

  • Others

180

52

-71%

249

123

-50%

199

62%

Gross profit

360

184

-49%

2,329

691

-70%

866

80%

SG&A expenses

-459

-171

-63%

-1,600

-585

-63%

-721

81%

EBIT

-100

14

N.M.

729

106

-85%

145

73%

Financial income

17

22

28%

55

48

-13%

49

97%

Financial expense

-62

-28

-55%

-148

-134

-9%

-190

71%

Net income from affiliates

0

-91

N.M.

0

-107

N.M.

0

N.M.

Net other income

7

4

-45%

25

8

-70%

0

N.M.

PBT

-137

-79

N.M.

661

-80

N.M.

5

N.M.

NPAT

-142

-125

N.M.

530

-160

N.M.

4

N.M.

NPAT-MI

-74

-114

N.M.

345

-168

N.M.

3

N.M.

 

 

 

 

 

 

 

 

 

GPM

40.7%

38.6%

 

56.9%

34.9%

 

36.1%

 

SG&A exp./sales

51.9%

35.7%

 

39.1%

29.6%

 

30.0%

 

EBIT margin

N.M.

2.9%

 

17.8%

5.4%

 

6.1%

 

NPAT-MI margin

N.M.

N.M.

 

8.4%

N.M.

 

0.1%

 

Source: DXS, Vietcap forecast (last updated October 16, 2023)

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